Two construction subcontractors have agreed to pay $1.28 million in back wages and damages to workers in what officials say is the largest wage theft recovery ever secured by the Minnesota Department of Labor and Industry.
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The settlement resolves a yearslong investigation into wage violations tied to multiple construction projects, including the high-profile Viking Lakes development in Eagan, built around the Minnesota Vikings’ headquarters.
“This is a big win for workers across the construction industry,” said Commissioner Nicole Blissenbach during a news conference announcing the agreement.
Under the settlement terms, Advantage Construction will pay $1.24 million in back wages over an 18-month period, while Property Maintenance & Construction will provide $1,500 in damages to each of the 26 affected workers. Both companies also face civil penalties of $26,000, which may be waived after three years if no further violations occur.
The case stems from alleged wage theft violations dating back to 2019, first reported publicly in 2022. Investigators later expanded their review to include 18 additional projects across Minnesota, involving work performed for several major developers.
State officials noted that the complexity of wage theft investigations, combined with resistance from contractors, contributed to the lengthy timeline. Keith Ellison filed legal action against one subcontractor, alleging obstruction of the investigation, including failure to provide documents and instructing workers to mislead investigators.
Although workers will now receive compensation, officials acknowledged that inflation has reduced the real value of the recovered wages. The state also reduced the overall damages initially sought in the case.
Advantage Construction denied wrongdoing, stating that the workers were not directly employed by the company and attributing the issue to “unauthorized and previously unknown actions” by a former project manager. The company said it settled to avoid prolonged litigation.
Labor advocates say the case underscores widespread issues in the construction sector, including wage theft and worker misclassification. Estimates suggest nearly one in four construction workers in Minnesota may be affected, leading to lost income for workers and reduced tax revenue for the state.
The investigation gained traction with support from the Northern Midwest Regional Council of Carpenters, which assisted workers in bringing forward their claims despite reported threats and retaliation.
“We are marketing apprenticeships and careers in the trades as debt-free paths to the middle class. We can’t afford to let the greed of some developers and some contractors turn these skilled jobs into an exploited underground economy,” said Burt Johnson, an attorney for the union.
Industry leaders also emphasized the competitive imbalance caused by wage violations. Contractors who underpay workers can significantly reduce project bids, making it difficult for compliant firms to compete.
“That’s not competition. That’s employment fraud,” said Crossroads Construction CEO Katie Kunshier, noting that unethical practices can undercut bids by as much as 40%.
The case also highlights evolving regulatory efforts. A 2023 state law now allows general contractors to be held financially responsible for wage violations committed by subcontractors—though that rule did not apply in this instance.
Officials say enforcement efforts depend heavily on workers coming forward, but fear and immigration-related concerns often discourage reporting.
“Our ability to successfully enforce Minnesota laws relies on workers who come forward to share their experiences and assert their rights,” Blissenbach said.
The settlement marks a significant milestone for labor enforcement in Minnesota, while also signaling ongoing challenges in addressing wage theft across the construction industry.
Originally reported by Max Nesterak in Minnesota Reformer.
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