Hawbaker Inc. pleads no contest
AG: Company to pay more than $20 million to workers in wage theft case
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From staff reports
HARRISBURG -- A major area heavy equipment and roadwork contractor pleaded no contest to four counts of wage theft Tuesday, and agreed to pay approximately $20 million after it was accused of stealing wages and retirement money from employees.
According to a press release from the office of Pennsylvania Attorney General Josh Shapiro, a plea deal with State College-based Glenn O. Hawbaker Inc. was made official Tuesday. The company was sentenced to five years' probation and will be overseen by a corporate monitor. The case was heard by Centre County President Judge Pamela A. Ruest.
As part of the plea agreement, Hawbaker will pay a total of $20,696.453 in restitution to 1,267 affected workers, according to the attorney general's office.
Shapiro said Hawbaker diverted more than $15 million in retirement contributions that were supposed to go to workers subject to the prevailing wage laws for government projects to instead fund pension contributions for all of its employees, leaving several workers' retirement accounts tens of thousands of dollars short.
Shapiro also said Hawbaker falsely inflated the cost of health benefits in an effort to conceal that the company had not met minimum per-hour payments under the state and federal prevailing wage laws.
"A month ago, I met with some of the men and women who had their wages and retirements stolen by Hawbaker -- and I told them that we will do everything we can to get them every cent they are owed under the law," Shapiro said. "A few minutes ago, I was able to tell them that we made good on that promise.
"We took on one of the largest construction companies in the state and now 1,267 people will have a better shot at retirement; they will get the paychecks they earned under the law; and they will have their work and their livelihoods protected and respected, instead of ignored."
According to the Associated Press, the company released a statement saying it was "pleased to bring this process to a conclusion" and avoid costly court proceedings, but it maintains it followed all fringe benefits rules. In pleading "no contest," the company accepts the convictions but does not expressly admit it committed the crimes.
"The fringe benefit practices challenged by the Office of the Attorney General were based upon advice provided by the company's former attorneys," the statement read. "Hawbaker has always intended to properly pay all of its employees."
State Sen. Jake Corman, R-Bellefonte, also released a statement Tuesday afternoon.
"This case was extremely difficult for the community and could still have serious ripple effects on the local economy," he said. "The Hawbaker family has been an important employer and a major philanthropic presence in the community for many years. I am thankful they have shown a commitment to ensure every employee is fairly compensated as part of this plea agreement."
Glenn O. Hawbaker Inc. booked $1.7 billion in state transportation construction contracts between 2003 and 2018, according to the attorney general's office.
The company, which has been in business since 1952, has facilities in Ohio, New York and Pennsylvania, including in Mifflin County.
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Information from the Associated Press was used in this report.