Attorney General Schwalb Secures Over $302,000 for Construction Workers & DC

Attorney General Brian L. Schwalb today announced that two drywall installation companies operating in the District - DR Construction and Consulting, Inc. (DRCC) and Pedro & Pablo's Construction Company, Inc. (Pedro & Pablo) - will together pay more than $302,000 to workers and the District to resolve allegations of worker misclassification, which deprived more than one hundred workers of wages and benefits they were entitled to under DC law. The Office of the Attorney General's (OAG) investigation found that Pedro & Pablo misclassified its workers as independent contractors instead of employees, and that DRCC used subcontractors, including Pedro & Pablo, that illegally misclassified workers. The companies cooperated with OAG's investigation and will now pay back harmed workers, pay penalties to the District, and make important changes to their business practices.

"Today, we're putting money back in the pockets of more than one hundred construction workers who were illegally deprived of wages and benefits they were legally entitled to receive. Misclassifying workers as independent contractors undermines fair competition, cheats the District, and hurts working families who are increasingly stretched thin," said Attorney General Schwalb. "As DC Attorney General, I will continue to have workers' backs and ensure that all businesses in the District play by the rules and compete on a level playing field."

Pedro & Pablo is a Virginia corporation that performs drywall installation and other construction work in the District of Columbia. OAG alleged that from 2021 through the present, Pedro & Pablo misclassified construction workers as independent contractors instead of classifying them as employees as required by DC law. As a result, these workers were deprived of benefits they were owed under District law, including paid sick leave and access to workers' compensation insurance.

DRCC is a Maryland corporation that performs construction work in the District of Columbia. OAG alleged that from 2021 through the present, DRCC employed subcontractors - including Pedro & Pablo - that illegally misclassified workers as independent contractors at job sites in DC. In addition to workers employed by Pedro & Pablo, dozens of construction workers on DRCC projects were allegedly misclassified and deprived of wages and benefits they were owed.

Under the terms of two separate settlement agreements:

• Pedro & Pablo will pay $200,000 to workers and the District. This includes $135,750 in restitution to workers and $57,500 in penalties to the District.
  
• DRCC will pay $102,739 to workers and the District. This includes including $56,250 in restitution to affected workers and $46,489 in penalties to DC.
  
• Both companies will change their practices to comply with DC law. Pedro & Pablo will reclassify its entire workforce as employees and submit to monitoring by OAG through 2027. DRCC will ensure all workers at its job sites are correctly classified, including by requiring certified payroll reports from subcontractors and randomly auditing subcontractors. DRCC will also stop doing business with certain subcontractors who have previously misclassified workers unless those companies submit documentation to the District showing their workers are not misclassified or enter into settlement agreements with the District resolving the allegations of misclassification.

The settlement with Pedro & Pablo is available here.

The settlement with DRCC is available here.

This matter was handled by Assistant Attorney General Charlie Sinks, Assistant Section Chief Dennis Corkery, and Section Chief Graham Lake.

What is Worker Misclassification?
Misclassification is a form of payroll fraud that reduces labor costs for companies at the expense of workers. When companies improperly classify their employees as independent contractors, the workers are deprived of rights and benefits they are legally entitled to as employees, including minimum wage, overtime compensation, and paid sick leave. By engaging in illegal misclassification, companies also shift their own tax burden to the workers they improperly classify as contractors and deprive the District of tax revenue, unemployment insurance premiums, and workers' compensation contributions. Additionally, construction companies that violate the law and misclassify workers undermine fair competition and undercut law-abiding competitors.

OAG's Efforts to Protect Workers
OAG's Workers' Rights and Antifraud Section is dedicated to fighting wage theft, protecting District workers, and ensuring that businesses in the District compete on a level playing field. Since AG Schwalb became the District's elected, independent Attorney General in January 2023, OAG has secured more than $23 million for workers and the District. In total, since gaining independent wage theft enforcement authority in 2015, OAG has secured over $39 million by investigating and bringing enforcement actions against employers who violate District law. OAG's wage theft enforcement efforts have focused on industries with high populations of vulnerable workers, such as construction, restaurants and hospitality, healthcare, and the gig economy. Learn more about OAG's efforts to uphold workers' rights over the last year in OAG's 2025 Labor Day Report.

How to Report Wage and Hour Violations
Workers who believe that their rights have been violated, or that they have experienced wage theft or other wage and hour violations can contact OAG by calling (202) 724-7730 or by emailing [email protected] or [email protected].

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