Centre County company Glenn O. Hawbaker accused of stealing millions in wages from employees
One of Centre County’s largest companies has been accused of stealing millions of dollars in wages from its employees.
Glenn O. Hawbaker Inc. was charged Thursday, the culmination of a three-year investigation into the company’s practices for calculating and claiming fringe benefit credits.
The “massive, unprecedented fraud” led to the largest prevailing wage criminal case in history, state Attorney General Josh Shapiro said during a Thursday press conference.
“My focus now is on holding Hawbaker accountable for breaking the law, and getting these workers their money back,” Shapiro said. “Employers across this Commonwealth, you are on notice: if you steal from your employees, if you misclassify workers, if you violate our labor laws, we are going to find out, we are going to hold you accountable, and we will do all we can so Pennsylvania workers receive the wages and benefits owed to them under the law.”
The business stole more than $20 million from workers for more than three decades, Shapiro said, though charges were only filed for alleged violations over the past five years.
Keeping money allowed Hawbaker to underbid projects, offset other costs and deny “honest companies” from working on construction projects across the state, Shapiro said.
No individuals were charged.
In a statement provided by its attorneys, Glenn O. Hawbaker said that since learning of the attorney general’s investigation in 2018, it has cooperated fully.
“While we believe that we have always acted in accordance with all state and federal laws, in an abundance of caution, the company immediately changed its prevailing wage practices,” the company’s attorneys wrote. “These changes remain in effect today as we continue to do what’s right for our employees, both past and present.”
Hawbaker is one of the largest contractors in the Keystone State. The construction and paving company has received about $1.7 billion in funding, Shapiro said.
“We learned what Hawbaker was doing from folks with their boots on the ground, keeping a close eye on how contractors pay workers and making sure workers get paid the wages that they earned,” Shapiro said.
The laws the company is accused of violating were enacted to ensure all contractors who receive state or federal funding pay the same wage rates, which are determined by state and federal agencies.
Contractors are allowed to satisfy a portion of the required wage by providing fringe benefits to employees. Workers lost “tens of thousands” from their retirement when Hawbaker improperly calculated the rate, state prosecutors said.
“While Hawbaker boasted that it provided great employee benefits, in actuality, the company was stealing its workers’ retirement, health, and welfare money,” Shapiro said. “... Hawbaker used its workers’ fringe benefit funds to lower their costs, and thereby increase profits for the Hawbaker family.”
Prosecutors said the business stole wages from its employees by using money intended for prevailing wage employees’ retirement funds to instead contribute to retirement accounts for all Hawbaker employees, including the owners and executives.
The company was also accused of stealing funds intended for health and welfare benefits to subsidize the cost of a self-funded health insurance plan that covers all employees, state prosecutors wrote.
Hawbaker said it will continue to work with the attorney general’s office to reach a “swift resolution.”
The business was charged with four felony counts of theft by failure to make the required disposition of funds. The organization waived its preliminary hearing.
A formal arraignment is scheduled for May 12.
This story was originally published April 8, 2021 at 2:10 PM.
