After a recent inspection at a Keene hotel development site, the state’s labor department has hit a Massachusetts construction company with more than $64,000 in initial fines.
Completed Jan. 10, the report alleges more than 130 labor law violations, but the bulk of the fines stem from the department’s determination that the company misrepresented 11 workers on the Key Road job site as independent contractors. The visit was prompted by a complaint, which is typical of labor department inspections.
The employer named in the report is TNC General Contractor Inc., which registered with the Massachusetts secretary of state’s office in September and lists an address in Framingham. An online search Wednesday yielded no website or information about the company. A Sentinel reporter called the phone number listed in the inspection report Tuesday and reached a man who said it was the wrong number.
Why classification matters
The presumption in state law is that a worker is an employee, and there are specific criteria to be defined as an independent contractor, according to Rudolph W. Ogden 3rd, the New Hampshire labor department’s deputy commissioner. The statute provides more protections for employees, he explained, which is why it’s important to correctly determine workers’ classification.
“Consider the example: If an independent contractor is not paid, their only recourse is to sue somebody. … An employee can leverage the (labor) department. An employee can also file a wage claim,” Ogden said. “... There’s a whole host of things that you have to do for your employees that you don’t have to do with independent contractors.”
One of the biggest differences under the law pertains to workers’ compensation.
Employers must provide workers’ compensation to all employees, regardless of the business’ size. But independent contractors, who work for themselves, must turn to their own insurance in the case of on-the-job injury.
State law includes a provision for employers who fail to comply: a $2,500 civil fine, plus another $100 per employee per day of work.
Any employer who is assessed penalties by the N.H. Department of Labor has 30 days to respond to the report and either pay the fines, request an informal conference with the department or challenge the findings with a formal hearing.
Last August, Connecticut-based Russell and Dawson announced in a news release that it would serve as the construction management firm in the building of a Hampton Inn & Suites at the 2.25-acre site on Key Road. The hotel is slated to open in May, according to that release.
The news came after more than a decade of attempts by various developers to build a hotel in the same spot, leaving a shell of a building there for years.
The release said Jamsan Hotel Management, a national company based in Lexington, Mass., would manage the Keene Hampton Inn & Suites. The property is owned by Jazzlyn Hospitality II LLC, which is also based in Lexington.
No one from Jamsan Hotel Management or Jazzlyn Hospitality responded to requests for comment Wednesday or Thursday.
A visit from the state
According to the narrative in the Jan. 10 report, inspector Philip Martineau visited the Key Road job site Dec. 27 and met with Erasmo Barroso, who presented himself as an independent contractor doing business as HRS Construction Inc. Barroso told the inspector he was performing services as a foreman on behalf of BPI Construction, the report continues.
HRS Construction incorporated in Massachusetts last July, and the only principal noted in corporate filings in that state is Elder Rodrigues de Oliveira, who isn’t listed online in White Pages.
BPI Construction Enterprises Inc. is also registered in Massachusetts. The sole principal listed in corporate filings for that company, Nilzadete B. Ganley, could not be reached by The Sentinel for comment.
Like TNC General, both companies have addresses in Framingham, but The Sentinel found no websites or listed phone numbers.
When Martineau returned to Key Road Jan. 4, Barroso retracted his earlier statement regarding HRS Construction and instead “presented himself” as a partner of TNC General, the report states.
Chirag Thaker, the president of Russell and Dawson, said his company has a contract with BPI Construction for the Keene hotel project. BPI Construction, in turn, contracted TNC General for the job, he said.
Thaker said this is the first time Russell and Dawson has worked with BPI as a subcontractor, and he has no knowledge of TNC General, since it’s a sub-subcontractor to his company.
According to the labor department’s report, Barroso told the inspector on that second visit that the 11 people on-site were performing work for TNC General as independent contractors. Martineau, however, determined there was a clear employer-employee relationship.
Being an independent contractor has several stipulations under state law, including control over one’s hours. An employer can’t dictate the time of performance, for example.
“Mr. Barroso keeps (track) of their hours, pays by the hour and pays these workers in cash with no receipt,” the report says.
As the foreman, Barroso also directed the workers to complete tasks, which falls under the definition of employees rather than independent contractors, according to the document.
With the inspector’s determination that the 11 workers were employees, he then cited TNC General for not following proper procedures, such as keeping payroll records and providing proper documentation to prove work eligibility.
Attempts by The Sentinel to contact Barroso were unsuccessful.
Thaker said he received an email from someone at BPI Thursday afternoon verifying that TNC General is in compliance with state law, including with workers’ compensation, and that there is documentation on file for the 11 employees.
He said his goal is to get a better understanding of the situation today.
“If (TNC is) not in compliance, they will not be working on the job site,” Thaker said. “... This is the welfare of the employees, and so we take these things very seriously, and we were very concerned about that.”
The Key Road site has seen alternating stints of partial development and abandonment for more than a decade.
In 2006, Guru Nanak Hotels bought the property and pitched a Hampton Inn to the city a year later, with a site plan nearly identical to the current one.
But the project slowed to a halt in 2008 after the company’s president, Gurdeep Nagra, was convicted in federal court of employing undocumented immigrants at a Brattleboro hotel and conspiring to make false statements in connection with a bank loan. He was fined $10,000 and removed from the Key Road project.
Later, several liens were placed on the property, and after several extensions, the building permit with the city expired in late 2009.
City officials refused to grant another extension and filed a motion in 2010 to have the unfinished structure torn down, saying it was abandoned and had become a safety hazard.
Less than two months later, Guru Nanak sold the property to Keene Key, which demolished the half-built first floor in May 2011. The site changed hands again in October 2015, when Jazzlyn Hospitality II LLC purchased the property.
Jazzlyn Hospitality LLC, a separate entity that has the same mailing address as Jazzlyn Hospitality II LLC, owns the Keene Fairfield Inn & Suites by Marriott on Main Street.
After Jazzlyn Hospitality II bought the Key Road property, another year and a half passed before the company filed plans to build a hotel. But no construction began until Russell and Dawson’s announcement last August.
Thaker said the project has pushed forward in the past few months, though the recent snow and cold weather has slowed construction. He said he expects the framing for the building to be completed in the next few weeks.