News
July 8, 2025

AG Jennings Cracks Down on Illegal Payroll Deductions

Caroline Raffetto

Delaware Attorney General Kathy Jennings has secured a settlement against a contractor accused of making unlawful deductions from workers’ paychecks on public projects, reinforcing the state’s stance against wage theft.

The White Collar Crime Unit of Jennings’ office resolved the case following an investigation by the Delaware Department of Labor (DOL) and the Department of Justice (DOJ) into Diamond Materials, a Delaware-based contractor.

“When contractors bid on government contracts, they have a legal and a moral obligation to do right by workers and the public,” said Attorney General Jennings. “Unfortunately, some contractors try to underbid their competitors by cutting corners on funds owed to their workers. That’s illegal. My office is cracking down on businesses that violate workers’ rights.”

At the center of the case were false statements on certified payroll reports submitted by Diamond Materials. The company reportedly deducted thousands of dollars from worker paychecks on projects governed by the Delaware Prevailing Wage Law, falsely stating that the funds went toward worker “training benefits.”

In reality, investigators found, the funds were diverted to cover the contractor’s own membership dues in a contractor association—a clear violation of state labor laws.

As part of the settlement with the Delaware DOJ, Diamond Materials agreed to immediately cease the practice and pay $100,000 to the State of Delaware. Separately, the Delaware DOL recovered $3,733.54 in restitution for the affected workers, along with additional payments to state agencies.

State Cracks Down on Wage Theft

The case reflects Delaware’s broader efforts to hold contractors accountable for wage theft and fraud, particularly on publicly funded construction projects where transparency and compliance with wage laws are critical.

The White Collar Crime Unit continues to actively pursue investigations into false payroll certifications and worker underpayments, which may result in criminal charges under the state’s Wage Theft statute.

Reporting Wage Violations

Attorney General Jennings’ office encourages workers and whistleblowers to speak up if they suspect wage theft or fraud. Reports can be made to the Delaware Department of Labor at (302) 761-8200.

Policy Context

The Delaware Prevailing Wage Law ensures that workers on government-funded projects are paid fairly and in line with established wage standards. Violations of this law not only harm workers but can give dishonest contractors an unfair edge over competitors who follow the rules.

The case against Diamond Materials serves as a warning: state and local authorities are watching, and contractors found violating labor protections will face consequences.

Originally reported by Department of Justice in Delaware News.

News
July 8, 2025

AG Jennings Cracks Down on Illegal Payroll Deductions

Caroline Raffetto
Announcements
Delaware

Delaware Attorney General Kathy Jennings has secured a settlement against a contractor accused of making unlawful deductions from workers’ paychecks on public projects, reinforcing the state’s stance against wage theft.

The White Collar Crime Unit of Jennings’ office resolved the case following an investigation by the Delaware Department of Labor (DOL) and the Department of Justice (DOJ) into Diamond Materials, a Delaware-based contractor.

“When contractors bid on government contracts, they have a legal and a moral obligation to do right by workers and the public,” said Attorney General Jennings. “Unfortunately, some contractors try to underbid their competitors by cutting corners on funds owed to their workers. That’s illegal. My office is cracking down on businesses that violate workers’ rights.”

At the center of the case were false statements on certified payroll reports submitted by Diamond Materials. The company reportedly deducted thousands of dollars from worker paychecks on projects governed by the Delaware Prevailing Wage Law, falsely stating that the funds went toward worker “training benefits.”

In reality, investigators found, the funds were diverted to cover the contractor’s own membership dues in a contractor association—a clear violation of state labor laws.

As part of the settlement with the Delaware DOJ, Diamond Materials agreed to immediately cease the practice and pay $100,000 to the State of Delaware. Separately, the Delaware DOL recovered $3,733.54 in restitution for the affected workers, along with additional payments to state agencies.

State Cracks Down on Wage Theft

The case reflects Delaware’s broader efforts to hold contractors accountable for wage theft and fraud, particularly on publicly funded construction projects where transparency and compliance with wage laws are critical.

The White Collar Crime Unit continues to actively pursue investigations into false payroll certifications and worker underpayments, which may result in criminal charges under the state’s Wage Theft statute.

Reporting Wage Violations

Attorney General Jennings’ office encourages workers and whistleblowers to speak up if they suspect wage theft or fraud. Reports can be made to the Delaware Department of Labor at (302) 761-8200.

Policy Context

The Delaware Prevailing Wage Law ensures that workers on government-funded projects are paid fairly and in line with established wage standards. Violations of this law not only harm workers but can give dishonest contractors an unfair edge over competitors who follow the rules.

The case against Diamond Materials serves as a warning: state and local authorities are watching, and contractors found violating labor protections will face consequences.

Originally reported by Department of Justice in Delaware News.