Union protests contractor's alleged failure to deduct taxes

Union workers Thursday staged a protest at the worksite of a company they contend has failed to pay state payroll withholding taxes on more than $10 million of state Division of Highways contracts.

Workers with Painters District Council 53 rallied at the site of a bridge painting project on Kanawha Turnpike in South Charleston, a $1.25 million contract awarded to Seminole Equipment of Tarpon Springs, Florida.

Steve White, president of the Affiliated Construction Trades Foundation, said certified payrolls that contractors are required to submit to the state show that Seminole Equipment has not been deducting West Virginia payroll withholding taxes on either the South Charleston or other projects contracted with the Division of Highways.

Since 2006, Seminole Equipment has been awarded more than $10 million of Highways contracts, and most recently has been awarded an $8.5 million project in Raleigh County and is the apparent low bidder for a project in Wetzel County in excess of $6 million, White said.

He noted the company’s payroll records in all cases show deductions for FICA — Social Security and Medicare payments — and for federal withholding taxes, but the row for state withholding taxes is always blank, he said.

“What we believe is this is the nonpayment or non-withholding of state income taxes,” White said.

Comparing gross wages with net pay for each employee also confirms that no money was deducted for state payroll withholding taxes, he said.

White noted that since bridge painting is labor intensive, a contractor’s failure to pay state withholding taxes on a $5 million project would amount to roughly $250,000 — which could be the margin for being the low bidder for the contract.

“Our laws have to be enforced fairly,” he said, adding that he has made inquiries about Seminole Equipment to both the Division of Highways and Department of Revenue to no avail.

“Nothing’s happening,” White said.

The Department of Revenue did not response to a request for comment Thursday.

Additionally, White said Seminole Equipment was granted an exemption to the West Virginia Jobs Act, which requires that 75 percent of the workforce be from the local labor market, on the grounds that there aren’t enough local workers who have a special certification for bridge painting.

However, he said a review of the workers brought in by Seminole found they also lacked the certification.
“DOH has dropped the ball,” Painters Council District 53 Secretary-Treasurer Dan Poling said Thursday. “We have alerted them to the problem but have heard little back. We want the State of West Virginia to make Seminole Equipment pay their taxes. It’s not fair to the West Virginia residents and businesses that do pay taxes.”

White said the need for Highways and Revenue to more closely audit contractors will become more critical if voters approve the $1.6 billion road bond referendum on Oct. 7.

Source: WV Gazette