Firm that built area schools underpaid workers, should be barred from bidding, state says

State officials want a construction company that helped build schools in Lacey, Tumwater and Tacoma barred from bidding on future public contracts after the company racked up repeat violations, according to the Department of Labor & Industries.

Bonney Lake-based I&C Northwest was recently ordered to pay $210,000 in back pay to nine workers who worked on 10 school construction projects in Western Washington from 2015 to 2016. Among them: North Thurston High School and Salish Middle School in Lacey, Peter G. Schmidt Elementary School in the Tumwater, McCarver Elementary School in Tacoma, and Evergreen Elementary School in the Bethel district.

Under the prevailing wage law, which is triggered when construction uses public money, the state sets the wages for specific jobs and locations. The law is meant to ensure contractors are on a level playing field when it comes to bidding on projects.

I&C Northwest and its owner, Jim Lingnaw, were cited for unpaid regular wages and overtime and for false reporting. The company, which specializes in insulating pipes and ducts, owes another $218,000 in fines.

Companies can be barred from bidding on public works projects when there are repeat violations. In a news release, Labor & Industries said it warned Lingnaw in January 2016 about fines and possible disbarment after it uncovered similar violations on other projects. Investigations involving I&C Northwest go back to at least 2014.

I&C paid the $210,000 in wages and has appealed the citations. A hearing is set to begin in March.

In a phone interview Tuesday, Lingnaw disagreed with L&I’s findings but said he cannot prove otherwise. He said the state took issue with how he recorded payroll.

Workers for his company work on private jobs and public works in the same week, Lingnaw said. The public jobs have a higher required wage and the state requires companies to document those hours.

All workers are paid for 40 hours per week based on a salary, Lingnaw said. Those who worked on public jobs with the higher prevailing wage would work fewer hours than 40 during the week to make up for the higher cost of those hours, he said.

“Realistically I can’t prove it because of how I did my payroll,” he said.

He said he has since figured out how to modify his payroll software to show different rates of pay for different jobs.

“Being a little company, I didn’t realize my bookkeeping (software) could do it,” he said.

A representative for North Thurston Public Schools said I&C Northwest’s troubles don’t affect the district. A representative for the Tumwater School District did not immediately respond to a request for comment.

This story was originally published October 10, 2017 at 6:19 PM with the headline "Firm that built area schools underpaid workers, should be barred from bidding, state says."