Pursuant to the provisions of M.G.L.c. 149 s. 27C (b)(4), the Petitioners, Darrell MacLean, President of Suburban Middlesex Insulation, Inc. and Suburban Middlesex Insulation, Inc. , appealed citation number MW070071 issued to him by the Respondent, Office of the Attorney General (AG), pursuant to G.L. c. 151 s. 19(3) and imposing a civil penalty of $2,000 for the failure to furnish records for inspection on June 22, 2007, in violation of G.L. c. 151 s. 15. (Exhibits 8 and 9).
A hearing was held on February 19, 2008 at the offices of the Division of Administrative Law Appeals (DALA), 98 North Washington Street, Boston, MA. At the hearing, ten (10) exhibits were marked.
The Respondent presented the testimony of: Investigator Scott Simpson of the AG's Fair Labor and Business Practice Division. Darrell MacLean testified in behalf of Suburban Middlesex Insulation, Inc. Both parties stated their arguments for the record. One tape was made of the proceedings. The record was left open for the filing by the parties of the actual records that were provided to the AG by the Petitioner as of July 24, 2007 and on November 21, 2007. These were marked as Exhibits 11 and 12, respectively. The last of the submissions was received at DALA on February 20, 2008, thereby closing the record.
Findings of Fact
Based upon the testimony and documents presented at the hearing in the above-entitled matter, I hereby render the following findings of fact:
1. The Petitioner, Darrell MacLean, has been the President of Suburban Middlesex Insulation, Inc. (SMI) since 1993. This company is in the business of: providing and installing insulation in commercial, institutional and public buildings throughout Massachusetts; general contracting; demolition and asbestos abatement.
2. The AG received three (3) non-payment of wages and/or non-payment of overtime complaints against SMI, pertaining to the Greenfield Community College project, sometime in early 2007. An investigation ensued. (Id.).
3. On May 22, 2007, Investigator Scott Simpson of the AG's office demanded that, pursuant to both G.L. c. 151 s. 15 and G.L. c. 149 s. 27B, the Petitioner furnish all applicable payroll records for the period from August 27, 2005 through May 20, 2007.
The Petitioner was given ten days to comply with this request. (Exhibit 1).
4. On May 30. 2007, the Petitioner, through Attorney Shannon, informed Mr. Simpson that SMI was collecting the relevant documents and would forward them to the AG once they were all compiled. (Exhibit 2).
5. On July 24, 2007, the Petitioner forwarded some seven hundred pages of documents to Mr. Simpson in response to the demand for payroll records. The submission included: copies of subcontracts with G.V.W., Inc. and Consigli Construction Company; copies of contracts between the Petitioner and the City of Fall River, JPNDC of Jamaica Plain, Town of Barnstable, Foxborough Public Schools, City of Waltham, Town of Sharon, and the City of Springfield, many G.L. c. 149 s 27B Statements of Compliance, and myriad Weekly Payroll Reports Forms. (Exhibit 11).
6. With specific regard to the Greenfield Community College project, the Petitioner's submission included: Weekly Workforce Reports for the weeks ending December 16, 23, 30, 2006, January 6, 13, 20, 27, February 3, 10, 17, 24, March 3, 10, 17, 24, 31, April 7, 14, 21, 28, May 5, 12, 19, all in 2007; Statements of Compliance dated December 20, 27, 2006, January 3, 2006 (sic), 10, 17, 24, 31, February 7, 14, 21, 28, March 7, 14, 21, 28, April 4, 11, 18, 25, May 2, 9, 16, 23, all in 2007; and, weekly payroll reports for the weeks ending December 16, 23, 30, 2006, January 6, 13, 20, 27, February 3, 10, 17, 24, March 3, 10, 17, 24, 31, April 7, 14, 21, 28, and May 5 and 12, all in 2007. (Id.).
7. The weekly payroll reports contained the employees' names and addresses, work classifications, hours worked, hourly wages and overtime rates, employer contributions to health and welfare, and pension accounts, and the "weekly total amounts" that the workers earned. (Id.).
8. On August 28, 2007, Scott Simpson wrote to counsel for SMI and noted that it had been determined that the July 2007 submission satisfied the payroll demand pursuant to G.L. c. 149 s. 27B, however, it was not responsive to G.L. c. 151 s. 15. Mr. Simpson requested that SMI furnish general payroll records verifying that the hours and rates of pay that were indicated on the certified payroll records were in fact paid to the employees. (Exhibit 3).
9. On October 11, 2007, Mr. Simpson wrote to Mr. Shannon again and indicated that the AG had not received the documents requested in the payroll demand of August 28, 2007 that would satisfy G.L. c. 151 s. 15. Mr. Simpson requested that the records be submitted on or before October 19, 2007 and noted, "failure to respond to this request may result in further enforcement action including the issuance of a civil citation or criminal prosecution". (Exhibit 4).
10. On October 16, 2007, Attorney Shannon wrote to Mr. Simpson and indicated that, contrary to the statements in the two recent letters from the AG, SMI had furnished the records responsive to G.L. c. 151 on July 24, 2007. Mr. Shannon concluded by stating, "please advise if you need anything further". (Exhibit 5).
11. On November 6, 2007, the Respondent issued citation # MW070071 to the Petitioners. A $2,000 civil penalty was imposed pursuant to G.L. c. 151 s. 19(3), "failure to furnish records for inspection on June 22, 2007". (Exhibit 8).
12. On November 16, 2007, the Petitioners appealed the citation. (Exhibit 7).
13. On November 21, 2007, the Petitioners provided further payroll records to the AG. These records included printouts from the Payroll Journal of Payrolls by Paychex, Inc. for SMI from December 24, 2005 through March 31, 2007. The records delineated the total earnings, net pay, social security, state and federal tax withholdings, adjustments and net pay of SMI employees. These records do not contain the employees' addresses or hourly wages. The records for all employees were not included in this submission. (Exhibit 12).
The issue for resolution in this appeal is whether the Petitioner was in compliance with G.L. c. 151 ss. 15 and 19(3) with the July 24, 2007 submission.
Section 15 provides:
Every employer shall keep a true and accurate record of the name, address and occupation of each employee, of the amount paid each pay period to each employee, of the hours worked each day and each week by each employee, and such other information as the commissioner or attorney general in their discretion shall deem material and necessary…(Emphasis added).
The Petitioners did not comply with this section. The payroll reports that were produced on July 24, 2007 contain a "weekly total amount", but they do not reflect the social security, state and federal tax withholdings or any payroll adjustments to particular employees. As such, it is not possible to determine from these records the "actual amount paid each pay period to each employee" that is mandated by the statute.
Accordingly, the AG was authorized to impose a penalty pursuant to G.L. c. 151 s. 19(3) which states:
Any employer or the officer or agent of any corporation who fails to keep the records required under this chapter or to furnish such records to the commissioner, or any authorized representative of the commissioner upon request, or who falsifies such records, or who fails to comply with any requirement of the commissioner… shall have violated this section and shall be punished or shall be subject to a civil citation or order…
The Petitioner received the initial request for payroll records in late May 2007. No records were submitted until late July 2007. In late August 2007, the Petitioners were asked again to comply with G.L. c. 151 s. 15. The Petitioners were informed in that letter that the AG was unable to determine from the records submitted exactly what amounts were paid to the employees. The Petitioners did not respond at all to this second inquiry.
Not until after receiving the third letter from Mr. Simpson in mid-October 2007 did the Petitioners respond that SMI believed itself to be in compliance with said section.
This was an erroneous assumption. First, the Petitioners were already on notice from the August letter from Mr. Simpson that the payroll records that were supplied did not demonstrate exactly what amounts had been paid to employees. Moreover, at that point, notwithstanding the note from Petitioners' counsel to "please advise if you need anything further", the onus was on the Petitioners to comply with the statute and not on the AG to contact Petitioners' counsel and reiterate the message in the August 2007 letter. It should also be noted that, after the issuance of the citation, the Petitioners submitted records that contained information necessary to be in compliance with the statute, however, not all records for all employees were submitted at that time.
Under these circumstances, the civil penalty of $2,000 imposed upon the Petitioners is appropriate and not excessive. This money is due to the Respondent.
DIVISION OF ADMINISTRATIVE LAW APPEALS,
DATED: April 1, 2008