Bank branch construction resumes after stop orders

Nearly two weeks after an order from the state’s Labor Department halted construction, work has resumed on an Amity branch of Chase Bank, the retail arm of banking giant JPMorgan Chase.

The branch — which is located no more than 20 feet from the New Haven–Woodbridge town line on Amity Road — paused construction on March 14 when a stop-work order was issued to five companies involved in the project. The order came after a tip from the federal Occupational Safety and Health Administration led to a state investigation of the site on March 13, which revealed that the five companies could not provide records showing proof of workers’ compensation and suggested that they were misclassifying their employees as independent contractors.

In misclassifying its employees as independent subcontractors, a firm can circumvent laws requiring it to pay workers’ compensation and unemployment taxes and to report accurate information on their payrolls to the government. Workers’ compensation is a form of insurance that substitutes for wages if a worker is injured on the job and cannot work.

“We take it very seriously when an employer fails to recognize their workers as employees of their company,” State Labor Commissioner Sharon Palmer said in a statement on March 14, noting that the practice allows employers to “avoid providing certain protections, such as workers’ compensation. When an employer fails to pay for the proper coverage for injuries suffered on the job, and a worker gets hurt, the state’s taxpayers ultimately foot the bill.”

Stop-work orders mandate that companies cease all work at a construction site until the order is lifted. They also require the company to pay a $300 penalty for each day it failed to pay workers’ compensation. Once issued an order, a firm has 10 days to appeal. If it can show “proof of appropriate coverage,” according to the Department of Labor, construction on a site can resume.

But in an apparent disconnect between JPMorgan Chase and the Department of Labor, construction at the site has since restarted, and several companies could be seen working on the project at 149 Amity Road Monday afternoon. According to Gary Pechie, the director of the Wage and Workplace Standards Division of the Department of Labor, the orders are yet to be lifted.

JPMorgan Chase spokeswoman Melissa Shuffield, however, said that only a day after the orders were issued, the labor violations were found only to apply to four subcontractors hired by general contractor Franchise Contractors, which have since been replaced. Shuffield said that the stop-work order for Franchise Contractors has been lifted, and Franchise Contractors remains the general contractor for the project.

Tyler Lazier, a project administrator for Franchise Contractors, confirmed Shuffield’s statement that the order had been lifted.

The state’s orders took JPMorgan Chase by surprise, Shuffield said. She noted that the bank had worked with Franchise Contractors several times before without incident. According to the contractor’s website, it has also built JPMorgan Chase branches in Staten Island, N.Y., Syracuse, N.Y., and East Brunswick, N.J., among other locations.

Shuffield said that JPMorgan Chase is in the process of making changes to how it oversees the construction of branches as a result of the stop-work orders.

“Based on this experience we are now making changes at JPMorgan Chase requiring all of our contractors to provide to us … the proper paperwork and documentation of their subcontractors,” Shuffield said.

Pechie said none of the five firms to which the state issued orders had received stop-work orders in the past.

The Connecticut Department of Labor began enforcing misclassification laws in October 2007. Since then, it has issued 872 stop-work orders across the state, according to the Department of Labor. The state has collected $513,000 in fines as a result.

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