Design and Construction Report staff writer
Brothers Mechanical Inc., a construction company that has worked on large development projects in NoMa, Navy Yard, and other DC neighborhoods, will pay $1.5 million to resolve allegations that the company and its subcontractors misclassified hundreds of workers as independent contractors, depriving them of wages and benefits.
Attorney General Brian L. Schwalb announced the terms of a settlement agreement resolving an investigation by the Office of the Attorney General (OAG). Brothers Mechanical will pay $500,000 to impacted workers and $1 million to the District in penalties. The company will also be required to change its subcontracting practices and submit to compliance monitoring for three years.
“DC workers are the backbone of our economy, and especially at a time when the cost of living in DC continues to rise, I will continue to prioritize ensuring that workers receive the wages and benefits they have earned,” Schwalb said. “This settlement puts money back in the pockets of hundreds of construction workers and sends a clear message that businesses will face consequences when they break the law, cheat workers, and undercut law-abiding competitors.”
Brothers Mechanical specializes in design, installation, and service of air conditioning, heating, ventilation, plumbing, and control systems and has worked on construction projects in the District, including multiple mixed-use and residential projects in NoMa (Armature Works, a mixed use development at 1200 3rd St NE; the Gantry, a mixed use development at 300 Morse St NE; Cielo, an apartment building at 300 M St NE; and another mixed-use development that includes the Hale apartments at 1150 1st St NE), a large mixed-use development in Navy Yard (Urby at 1399 Yards Pl SE), and a mixed-use building in the Stacks development at Buzzard Point (100 V St SW).
OAG uncovered evidence that from 2020 to 2025 Brothers Mechanical signed agreements with subcontractors to provide about 500 construction workers to staff, and that these workers were illegally misclassified as independent contractors.
Because these workers were misclassified, they were not paid overtime premiums when they worked more than 40 hours in a week, were deprived of paid sick leave they earned, were required to pay more in taxes than they would if they were properly classified as employees, and were excluded from critical safety net programs for employees, including unemployment insurance and workers’ compensation.
“When companies illegally label employees as independent contractors, or misclassify them to a lower standard, they avoid paying proper wages, benefits, workers’ compensation, and payroll taxes. This is all-too common in the construction industry, and creates an uneven playing field where law-abiding contractors, who invest in trained workers and follow all regulations, are undercut by those cutting corners,” said Chuck Sewell, marketing director for the International Association of Sheet Metal, Air, Rail, and Transportation Workers (SMART) Local 100. “We thank Attorney General Schwalb and his team at the OAG’s office for working to ensure the industry is safe and fair for all contractors and workers in the District.”
To resolve OAG’s wage theft investigation, Brothers Mechanical must:
- Pay $500,000 to workers.
- Pay $1 million in penalties to the District.
- Make significant changes to ensure compliance with DC wage and hour laws. This includes requiring any subcontractors to submit certified weekly payroll information, randomly auditing subcontractor payrolls on DC projects, and training workers to identify suspected wage and hour violations.
- Submit to three years of compliance monitoring by OAG.
The settlement is available here.
