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Local Company Pockets Worker’s Wages, Tax Dollars, Whistleblowers say

Monday, October 27, 2014


Jose Tandy and workers claim Cornerstone Janitorial hired undocumented immigrants and then pocketed their wages

A local janitorial company that has worked on publicly-funded projects has been shortchanging its workers and pocketing their wages, according to the claims of whistleblowers.

Wage theft complaints against Cornerstone Janitorial Service of Hillsboro have been filed in Oregon and Washington and whistleblowers allege that the company hires undocumented immigrants and takes taxpayer-funded wages that rightfully belong to workers.

In response, Cornerstone tells GoLocalPDX it only hires legal residents and pays the proper wages.

But an investigation by GoLocalPDX has found that in some cases workers are only paid $12 an hour on jobs that should have been compensated at an hourly rate of $36.

“This is discrimination and racism,” Jose Tandy told GoLocalPDX in Spanish. “I’m being robbed.”

Tandy, a resident of Southeast Portland, is an undocumented resident who moved to Oregon from Mexico ten years ago.  Tandy works in unskilled labor, like construction and janitorial services.  He said with Cornerstone he only makes $12-$13 an hour and he’s always been paid in cash.

The problems is, when the Cornerstone works on a construction project paid by tax dollars and public funds, contractors are obligated to pay the “prevailing wage.”

Prevailing wages are determined through a complex formula, but laborers like Tandy working in Portland qualify for a mandated wage of $36 an hour. It's a wage Tandy said he’s never received.

Other workers have come forward to talk to GoLocalPDX, or been located through its investigation, and they all claim that on large public projects they’ve been paid low wages and always in cash.

“He’s making a mockery of me,” said Tandy of Cornerstone Janitorial owner, Sang Nam.

Nam is a Korean immigrant himself.  That allows him to apply for work as a minority contractor, which can be a big advantage on taxpayer-funded jobs.

“I don’t think there’s anything wrong with what I’ve done,” Nam said of the charges.

Public Projects Mandated Wages

Cornerstone has worked as a construction site cleanup subcontractor for some of the largest construction firms in the region, including Swedish mega-firm Skanska and locally based Hoffman Construction.

At least ten major projects have been called into question by whistleblowers and complaints filed with state labor agencies.

Those projects include school buildings in Philomath and Stayton, the Oregon State Hospitals in Salem and Junction City and facilities built at the University of Oregon in Eugene and Washington State University in Pullman.

The Washington State Department of Labor and Industry is already investigating a complaint that could involve as many as 11 workers.  Another complaint working it’s way through The Oregon Bureau of Labor and Industry calls into question six possible projects in Oregon.

Cornerstone owner Sam Nam has lived in Oregon since 1999 and started the business in 2001.

Nam told GoLocalPDX the charges are untrue and he does not know who is leveling accusations at him.

“I don’t hire illegals,” Nam said. “I do pay some of them (workers) in cash sometimes. Some don’t have bank accounts.”

Nam said Cornerstone pays the prevailing wage on government jobs, but that different jobs pay different wages. He said he doesn’t even like to do government-funded projects.

“Public projects aren’t profitable,” Nam said. “They are too complicated with the payroll and paperwork.  They don’t pay enough.”

Suddenly Coming to Light

Some workers allege that Cornerstone has been pocketing tax dollars from prevailing wages jobs for years.

“He told me, ‘We can pay you like this because you guys are illegal,’” Tandy said.

Workers that GoLocalPDX spoke with allege that Cornerstone paid in cash and workers were specifically instructed to tell others they were making over $30 an hour.

Lionel Chavez, 43, is another undocumented resident. Like Tandy, he's from Guerrero Mexico. He worked for Cornerstone on a recreational facility build at WSU's Pullman Wash. campus.

He said he was paid $12 an hour.

"It's not the first time," said Chavez. "Before him (Nam) I was working for another person, 12 to 14 hours a day, and they weren't paying me overtime."

Many workers appeared to have gone along with it because they feared deportation or simply did not believe that they could make that much money at day laboring.

The issue only came to light after Tandy was injured on the job on August 27th. 

Cornerstone had been working on a project at Portland Community College on North Killingsworth Avenue. Hoffman Construction was the general contractor.

Tandy fell down a flight of stairs while moving some equipment off the job site. He was taken to OHSU for severe bruises and was outfitted with a neck brace and crutches, Tandy said.

Paperwork filed during the ensuing days showed that Tandy was making $13 an hour on a job that paid $35.96. Hoffman did an internal investigation and found that several workers claimed they were getting paid under the table at about a third of the prevailing wage.

“It’s not a problem we run into very often,” said Bart Eberwein of Hoffman Construction. Eberwein said the company interviewed about ten workers and some were reluctant to talk. “Almost all appeared to have been paid in cash.”

That was concerning to Eberwein, because Hoffman requires all subcontractors to certify that their payroll complies with prevailing wage laws.

Since the accident, Cornerstone has paid Tandy the prevailing wage, by check and with payroll documents. Accounting produced by Cornerstone that Tandy submitted to GoLocalPDX indicated Tandy had made up to $23,000 this year so far. Tandy said the numbers aren’t true.

“I think I’ve made about $3,000 from them this year,” Tandy said.

Worker Fears

Despite the numerous projects Cornerstone has worked on with them, the law only lets Hoffman file complaints on jobs that have been completed in the last 6 months. Eberwein said they’ve filed a complaint with BOLI about the PCC job, and listed a number of other public projects they’ve done with Cornerstone.

Skanska, another major contractor for Cornerstone, was completely unaware of the current charges leveled against the Hillsboro company.

BOLI said that wage complaints by workers, not general contractors, really drive wage investigations.  But to date, no Cornerstone workers had filed a labor complaint with BOLI.

Many fear they could be deported or don’t believe they will ever recover their wages.

State officials and attorneys who work on immigration cases claim that those who make legitimate labor complaints are not targeted for deportation. Others say that those who are involved in large legal cases actually get protected from deportation.

“Any employee contemplating filing a claim should know that our agency will also work to ensure that they’re protected from unlawful retaliation through our civil rights division,” said Charlie Burr, a spokesman for BOLI.

That said, in 2007, undocumented workers at a Fresh Del Monte fruit processing plant in North Portland complained of working conditions at the plant.  The issue was publicized in the local press and in the following months federal agents swooped down on the plant and seized 167 undocumented workers.

One Man Battle

Tandy, for his part, said that he’s going to continue his fight.

He moved to the U.S. with his son, from Acapulco fleeing drug cartel-fueled violence. 

“I wanted a better life for my son,” Tandy said.

Since arriving here, his son has married, become a citizen through the Dream Act, and has become a nursing assistant.

Tandy said he intends to file a complaint and push on, despite the risks. 

“Now that I’ve started this, I will see it to the end.”


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