Contractor On Somerville Playground Project Stiffed Workers: AG

SOMERVILLE, MA — A Rockland-based playground construction company and two of its executives will pay $310,000 and hire a compliance manager to resolve allegations that it knowingly submitted inaccurate payroll records for projects in four communities, including Somerville, Attorney General Maura Healey's office said.

NELM Corp was also accused of misrepresenting the status of furloughed workers to the Department of Unemployment Assistance and continued to employ them while failing to pay them the prevailing wage and overtime, Healey's office said.

"This company lied to our state agencies and municipalities and cheated its workers out of the wages they earned while it constructed taxpayer-funded playgrounds for our communities," Healey said. "Companies that do business here have a responsibility to operate with honesty and integrity, and my office will hold accountable those who don’t."

NELM's contracts with the municipalities of Somerville, Boston, Everett and Needham required the company to pay employees the prevailing wage set by the Department of Labor Standards for work on publicly funded projects. The contracts also required NELM to submit weekly payroll reports to municipalities to certify it was paying its employees the prevailing wage.

It was alleged that the company regularly submitted reports that falsified both the number of hours that employees worked and the rates they were paid for their work, Healey's office said.

The investigation also found that NELM routinely represented to the DUA that it had furloughed its employees for various periods of time during the contracts but continued to employ these workers and pay them from a checking account that was separate from the one it used for its regular payroll expenses. The attorney general alleged that furloughed employees were continuing to work on the public projects and were being paid below the prevailing rate.

The settlement requires NELM to pay $310,000 in penalties and damages to the state, including $280,000 for its violations of the state’s false claims statute and $30,000 in civil citations for its fair labor violations.

NELM will also contract with an independent monitor, approved by the attorney general, to establish and implement an ethics and compliance program for three years to ensure the company is complying with state laws and regulations. Under the program, the company is required to conduct annual trainings for all personnel on the state's wage and hour laws. The independent monitor will conduct annual audits of the payroll records the company files with the state.