Attorney General Schwalb Secures $1.7 Million in Connection with Misclassification of Construction Workers

Attorney General Brian L. Schwalb today announced that W.G./Welch Mechanical Contractors, LLC (Welch), a construction company that worked on major projects across the District, will pay up to $1,706,450 and reform its subcontracting and payroll practices to resolve a workers' rights lawsuit filed by the Office of the Attorney General (OAG).

In 2024, OAG sued Welch, three labor brokers, and general contractor Whiting-Turner Contracting Company (Whiting-Turner), alleging a widespread misclassification scheme where the companies illegally classified employees as independent contractors, depriving hundreds of District construction workers of the wages and benefits they were entitled to under DC law. Under the terms of the settlement, Welch will pay $691,450 to about 500 harmed construction workers, pay $1,000,000 to the District in penalties, and make significant changes to its operating procedures to comply with District Law. Under the terms of a separate settlement agreement, Whiting-Turner will make changes to its practices on DC projects to ensure future compliance with District law throughout the subcontracting chain.

"Today we're putting money back in the pockets of construction workers who were denied wages and benefits they were entitled to receive," said Attorney General Schwalb. "People across the District struggling to make ends meet, and it is more important than ever that workers get every dollar they've earned, that bad actors are held accountable, and that law abiding businesses are able to compete on a level playing field."

Welch has had a significant footprint in the District's construction industry, staffing hundreds of workers on contracts worth tens of millions of dollars, performing mechanical services such as installing HVAC systems, plumbing pipes and fixtures, and doing sheet metal work. One of Welch's largest projects, involving over 250 workers, was the City Ridge mixed-use development on Wisconsin Avenue NW.

In its lawsuit against Welch, OAG alleged that in performing work for general contractors, including Whiting-Turner, Welch sourced workers from labor brokers who misclassified them as independent contractors instead of employees to minimize labor costs. Hundreds of construction workers were misclassified as independent contractors and denied the protections and benefits that employees are entitled to under the law, including minimum wages, overtime pay, paid sick leave, and access to workers' compensation insurance.

Under the terms of the Consent Order, Welch will:

• Pay $1,706,450.
  
  • $1,000,000 in penalties to the District.
    
  • $691,450 to about 500 construction workers. Eligible workers will be contacted by a settlement administrator within 60 days after the entry of the Consent Order.​​​​​
    
  • Up to $15,000 to administer the settlement payments
    
• Change its practices to comply with DC law. Welch will work to ensure all workers on its DC projects are correctly classified as employees, including by requiring certified payroll reports from subcontractors and randomly auditing subcontractors. Welch 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 Consent Order is available here.

Under the terms of a separate settlement agreement, Whiting-Turner has agreed to adopt or maintain subcontracting practices that will help prevent misclassification throughout its subcontracting chain. This includes imposing notification requirements on subcontractors, retaining records provided by subcontractors about construction workers on the company's DC worksites, and ensuring inclusion of certain contractual provisions to prevent future misclassification.

This matter was handled by Assistant Attorneys General Jude Nwaokobia and Hannah Cole-Chu; Investigator Kenithia Alston; Paralegal Diego Pereira; 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. OAG's 2019 economic analysis of misclassification in the construction industry found companies that misclassify workers can illegally reduce their labor costs by anywhere from 16.7 to 40 percent. This financially incentivizes misclassification by giving employers an anticompetitive edge over law-abiding companies, illegally suppressing labor costs throughout the entire construction industry, where contracts are often awarded through competitive bidding.

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 Attorney General in January 2023, OAG has secured more than $28.5 million for workers and the District 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 2026 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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