A janitorial contractor in business since 2001 has been banned for life from working public projects in Oregon due to wage and hour violations.

Cornerstone Janitorial Service, and its owner, Sang Nam, were turned in for failing to pay workers prevailing wage by their general contractor on several projects, Hoffman Construction.

Labor Commissioner Brad Avakian said though it’s usually the workers themselves who file complaints, it’s not unusual for contractors to seek to “level the playing field” by reporting competitors who are bad actors.

“Sounds like justice has been served,” said Hoffman executive vice president Bart Eberwein.

What is unusual is the lifetime ban, which exceeds the statutory limit in Oregon of three years. BOLI was able to secure the ban in the settlement process, by lowering civic penalties.

“In our minds, there were so many workers involved and such clear evidence that Cornerstone was intent on violating the law, and the acts were just so flagrant, that we believed that a lifetime ban from public projects was necessary to protect taxpayers and future workers,” Avakian said.

It’s only the second lifetime ban in BOLI’s history – the other was in 2000.

Nam has already paid back wages to the 46 employees he underpaid for a number of taxpayer-funded projects in 2013, including several for Portland Community College. The workers performed jobsite cleanup for which they should have been paid $36 per hour, but were instead paid $12.

“Oftentimes when you’re dealing with entry-level jobs and a more vulnerable workforce, it can be easier for a disreputable employer to take advantage of that,” Avakian said.

Cornerstone is still allowed to work private projects in Oregon. The firm had an active Oregon business license as of this week.

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The federal Occupational Safety and Health Administration is raising its penalties for the first time in 25 years. It’s one of a number of major changes ahead for employers, and with it comes talk of legal challenges.

Some legal observers are warning the new higher maximums could be applied retroactively, which would to questions of due process and ex post facto. This likely wouldn’t happen in Oregon, but as more and more firms are extending their reach beyond their home state, it has people here talking about a new standard for due process.

But it’s unlikely to happen in this state, according to Aaron Corvin, spokesman for Oregon OSHA. The new maximums will become effective only after the Legislature approves them in its next session, he said. The agency will not apply the penalties retroactively, he said.

That’s because Oregon is one of 22 states with an OSHA-approved “state plan,” meaning its safety and health laws are the purview of a state-run agency rather than the federal program. Guiding each of these state plans is the phrase “at least as effective” – a mandate that all their policies and programs at least meet federal OSHA requirements. Oregon will adjust penalties upward, but won’t begin applying the new rates until after state lawmakers give their approval, Corvin said.

Contained in the Bipartisan Budget Act of 2015 is a requirement for some federal agencies to adjust their civil penalty rates based on inflation. Backers felt it was important for regulatory fines to remain a credible deterrent to bad behavior. OSHA most recently increased its penalties in 1990.

Across the country, in states without state plans, OSHA’s penalties will increase by 78 percent when they become effective Aug. 1. Fines for “serious” violations will rise from $7,000 to $12,471. Fines for “repeat” and “willful” violations will jump from $70,000 to $124,709.

Here in Oregon, this won’t happen any earlier than January 2017, when the Legislature next meets. The specifics of the bill aren’t yet known, said Corvin.

“And it’s also worth noting that we’re not going to go back and apply new maximums to citations that already have been issued,” Corvin said.

Laws that forbid actions someone has already taken are known as ex post facto laws and in the U.S. are forbidden by the Constitution. Former Oregon supreme and appellate court justice W. Michael “Mick” Gillette said it’s important to consider that Congress’ motivation in passing the increases was to ensure that violations of safety rules don’t become cheaper and cheaper.

“If something is already a violation of the law and the only question is what consequence in money flows from it, that doesn’t carry with it quite the same concern,” he said. “And because these raises are based on inflation, it seems to me what Congress is really saying (is) we don’t (want) to punish anybody any more in real dollars than they would have been punished before.”

The promise of due process – that a person’s life, liberty and property cannot be taken without due process of law – appears in the constitution in the Fifth Amendment and is later echoed in the 14th. Americans are entitled to certain procedures and warnings before a fine is imposed. The country’s founders weren’t thinking about this problem at all, according to Gillette.

“The concept of what due process of law was was in no sense settled,” he said. “It may have been settled in each of the minds of the men – and it was all men – who voted in favor of the two different amendments, but if you’d have sat them down in a room and quizzed them, they wouldn’t have all agreed with respect to how due process actually played out.”

Unlike most states, Oregon doesn’t have a due process clause in its constitution. It takes its signals from the federal clause. Gillette was on the supreme and appellate courts for many due process-related cases, but they tended to be around the subject and not on it. This prevented each court from making a ringing positive statement with regard to what due process required in Oregon.

States have different laws regarding safety, and firms would be wise to internalize those of whatever they work in, because ignorance of the law is no excuse, said Elaine Fischer, spokeswoman for the Washington Department of Labor and Industries.

“When it comes to safety, they have to follow our rules when they work in our state,” she said.

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A Portland-area flagging company operator was ordered to pay $79,000 for withholding pay to his employees, an administrative law judge with the state Bureau of Labor and Industries ruled last week.

In the order, four companies operated by Evan Williams – Portland Flagging, A D Traffic Control Services and Tri-Star Flagging – were assessed civil penalties. Three of the four were fined for failure to pay prevailing wage on the Sellwood Bridge project.

Additionally, Williams was ordered to be placed on the list of people ineligible to receive public contracts for three years.

Oregon Labor Commissioner Brad Avakian admitted three years isn’t long given Williams’ history of violations.

“That’s the maximum penalty allowable under the statute,” he said.

Though many of the violations took place during the Sellwood Bridge project dating to 2010, scrutiny against Williams has intensified in recent years as employees have come forward to report unlawful practices. Avakian earlier this year filed a complaint alleging retaliation, threats of physical violence and other unlawful practices.

The final order, issued last week, included 36 instances of failure to pay prevailing wage rates, 52 instances of filing inaccurate statements, one of failing to file certified statements and five instances of unlawful deductions from paychecks.

As to where the $79,000 fine will go once paid, BOLI spokesman Charlie Burr said the bureau applies civil penalties to its prevailing wage enforcement costs. Any remainder goes to the state treasurer’s office. Additionally, all wages recovered are directed to affected workers, Burr said.

Under last week’s order issued by BOLI deputy director Christie Hammond (presiding because Avakian filed the initial complaint), Williams has 60 days to file an appeal with the state Court of Appeals. If that’s unsuccessful, the last step would be an appeal to the state Supreme Court.

Williams, who at points represented himself in BOLI’s quasi-judicial proceedings, told the 91��Ƶ that Avakian was a “puppet of the labor unions.”

“It’s my job to protect every worker in Oregon, regardless of whether or not they are in a union,” Avakian told the 91��Ƶ.

Avakian has been an outspoken and ambitious BOLI director, waging aggressive campaigns against wage theft and other misconduct, and supporting efforts to increase career training in schools. Last year, he oversaw a high-profile discrimination case against a Gresham bakery that refused to bake a cake for a lesbian couple.

Avakian is the democratic candidate for Oregon secretary of state in the November election. His opponent is former Republican gubernatorial candidate Dennis Richardson.

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