Fraud Case Against Mecca Bus reveals threats to payroll promises in city contracts

Over the past few decades, government agencies across the country have used their purchasing power to benefit American workers.

When cities start developing projects or purchase expensive equipment, they sometimes offer contracts or subsidies based on job creation, or impose wage terms. The Obama administration wanted federal contractors to pay workers more than $ 10 an hour for paid sick leave.

But implementing such provisions can be a challenge, especially for local governments. Now, a corruption complaint against a large contractor raises questions about the effectiveness of such commitments and the potential for a holistic approach.

The contractor, New Flyer of America, one of North America's largest bus manufacturers, is a supplier to New York and other major cities. In a 2012 proposal by the Los Angeles Metropolitan Airport Authority about ordering up to 900 buses, New Flyer said it would create more than 50 full-time positions that could pay $ 11 up to $ 50 an hour.

New Flyer Company won the contract, worth $ 500 million. But the company has not paid the salaries it claims to make and will misrepresent the value of its benefits, according to pay stubs and company reports recently revealed in the corruption case.

Madeline Janis, executive director of Jobs in Move America, was a commitment – an issue of promise – was a pledge against the California state court in New Flyer. "This case is about keeping a big company foot on fire."

Transactions to the United States have helped to develop models, used by several agencies, in which public transportation equipment manufacturers are determined to create jobs in the United States as part of the contracting process. She helped persuade the Los Angeles-based agency, called L.A. Metro, in connection with the purchase of its contract work contract in 2012 by rail-train. Contract & # 39; New Flyer & # 39; came into effect shortly after, 2013.

Since then, at least eight other agencies – including the New York City Transportation Authority, Hay & # 39; Chicago and Amtrak – have sought promises from transportation contractors to create production jobs. using Ms. Group's example. Janis produced by her.

Timothy J. Bartik, an economist at the Upjohn Institute in Michigan, said this approach is likely to cost more to the government, as contracting companies may raise costs. carry value to help finance the jobs they promise to create. But he said it is possible that economic benefits will outweigh the costs, and that manufacturing jobs will also provide social benefits.

New contract & # 39; New Flyer & # 39; announces the number of full-time jobs the company plans to create and extend the dollar value of salaries and benefits to employees in those jobs. L.A. Metro then applied the economic multiplier to estimate the total cost of jobs: about $ 18 million.

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In her lawsuit, Jobs to Move America argues that New Flyer has filed at least two types of false information to L.A. Metro.

The company said in its proposal that more than 90 percent of new jobs in California would pay at least $ 18.35 an hour. But quarterly progress reports submitted to L.A. At Metro in 2014, New Flyer said most workers earn $ 17 an hour or less.

In the same reports, the company says employee benefits are worth $ 11.75 per hour, or about $ 2,000 a month. But the checks and other documents received by Jobs to Move America and reviewed by The New York Times show that benefits are usually half the best. (The group does not blame the company for slowing down the number of jobs it created.)

Lindy Norris, a spokeswoman for New Flyer, said the company believes it has "fulfilled the terms and conditions" of its workflows. She declined to comment on the lawsuit but said the company "will vigorously defend this action."

L.A. Metro declined to comment, pending the lawsuit pending. Jobs transferred to the United States bring the matter to the agency and the state under a clear anti-corruption law.

Debbie Pitts, who worked at the New Flyer factory in Ontario, Calif. And completed the production of L.A. buses. Metro, hired in late 2013. Her job was to touch the final, such as religions, buses. According to a letter the company sent in Dec. 2, 2013, her starting salary was $ 17 an hour, more than $ 1 less than New Flyer said she would pay for such workers.

Ms Pitts has saved many of her paychecks, stressing the value of her & # 39; s ads showing they are typically less than $ 500 a month. The value of her benefits was lower than the benefits of some of her colleagues with whom she works because she is denied health insurance.

But a document for nine employees at a New Flyer factory in the state of Minnesota shows that the company typically spends $ 500 to $ 1,000 a month on health insurance for workers making similar salaries.

Ms Pitts, who left New Flyer in 2017, said in an interview that her salary cap reflects all her benefits, except for the occasional hat, cup or T-shirt the company gave her. Of the $ 2,000 monthly benefits reported by New Flyer, Ms. Pitts said, "That turned out to be so bad they could even say it."

Contract & # 39; New Flyer & # 39; in conjunction with L.A. Metro has a vague language about whether the company was forced to issue general levels of compensation or – as Jobs to Move America argues – to bring special pay and benefits to employees in the private sector.

However, New Flyer has filed false information about the & # 39; s employee's quarterly report, according to the complaint.

The California False Claims Act, in which the lawsuit was filed, prohibits false claims about state and local government payments. Stephen M. Kohn, an attorney representing the plaintiffs and has filed numerous false claims claims, said failure to live paychecks can be a possible violation, as well as filing false reports. demonstrating compliance.

If Jobs Referred to by the United States Movements, New Flyer may face significant fines, including up to $ 11,000 for any false claims, and possible damages related to employee pay or damage to agency & # 39. the government.

New Flyer is not the only company that has obeyed Ms. contract. Janis & # 39; s her team came under fire.

Hearing first took place in Los Angeles, has warned looga jobs into the US The city and county to another company and producer of a bus, a Chinese company BYD, the staff less than promised and gave workers less than salary looga requires employees receive contracts or subsidies for the city.

BYD said at the time it was dedicated to hiring more employees and believed it was exempt from the so-called wage law. The dispute was effectively resolved after BYD entered into an agreement with a non-profit group and unions, leading to better pay for workers.

Ms. Janis said the New Flyer case and others like her show that the government & # 39; s government cannot simply draft the terms of the agreement and expect companies to honor it.

They make a deal with the government & # 39; s government and promise everything, and they think they don't have to follow it, she said.