State fines Maili contractors $45K for safety, other violations

A townhouse project in West Oahu
A townhouse project in West Oahu
Audrey Hidano
Audrey Hidano
Rebar were previously missing plastic safety caps
Rebar were previously missing plastic safety caps
A worker wears his hard hat
A worker wears his hard hat
John White
John White

MAILI, Hawaii (HawaiiNewsNow) – The state has fined contractors building a townhouse project in West Oahu tens of thousands of dollars for workplace safety and other violations in the first investigation to result from a task force of state departments targeting illegal work at construction sites.

Investigators from the state labor, tax and commerce departments converged at the Maili Beach Place townhouse project along Maipalaoa Road in Maili on Nov. 21, 2011.

State labor inspectors found seven on-site contractors and subcontractors failed to pay workers compensation for their employees, so the state fined the companies $19,550.

"And that's kind of sad, because that's not protecting the workers if they were any accidents on the work site," said Deputy State Labor Director Audrey Hidano.

She said all seven companies have now obtained workers compensation coverage for their employees and paid penalties for not having proper coverage before.

Hidano said inspectors from the Occupational Safety and Health Division also found 33 serious workplace safety violations on the job site, proposing citations worth $25,475 against five companies.

Among the workplace safety violations:

  • Unprotected pieces of rebar that needed plastic safety caps to prevent people from being impaled by accident.
  • Planks used to access the front porches of townhouse units needed to be replaced by stairs with handrails.
  • Exposed, frayed electrical wires at several locations, with one extension cord lying across the main driveway, being run over by vehicles as they entered and exited the property.
  • Construction workers walked along the wooden-framed roof of an incomplete building without wearing safety harnesses.
  • Workers and supervisors not wearing hard hats on the construction site.

"Working without a hard hat, which is a complete no-no," said Hidano.  "That's like the number one rule, working with a hard hat, which they were not doing, including upper management people who were walking on the job site.  So there were tons of violations."

An on-site representative of developer Keller Enterprises, Brandon Jones, said the completion date of the project has been delayed by about two to three months, because they had to slow down work to deal with the violations and the fines from the investigation.  The majority of the employees at the site stopped work for a couple of weeks after the inspection in November, Jones said.

"We fixed 95-percent of the safety violations within 24 hours," Jones said. "We took it seriously. We wanted to make sure we were in compliance."

Harrison Horn, Jr., a member of the development team who called himself the project's quality engineer, said, "We felt the state was fair and balanced and helpful, actually."

Horn's company, Keller Enterprises, faced fines of $11,500 for 13 serious workplace safety violations.  But Horn said he met with state labor officials, reached a settlement and paid $9,200 in fines for the violations.

John White is the executive director of Pacific Resource Partnership, a nonprofit organization funded by the Carpenters Union that tipped off the state about the Maili construction site violations.

"When you have contractors that willfully ignore state laws, who subject the public and people who work on these construction projects to unsafe working environments, it hurts all of us," White said.

A majority of construction workers on the Maili site are non-unionized, White said.

"We applaud the state in their efforts to make sure the contractors and developers play by the rules and play fair in Hawaii," White said. "Laws are designed to protect the public and protect the people who are building the project, and that's why people should care."

Contractors who don't follow the law can unfairly undercut legal contractors with lower prices, since they sometimes don't pay workers compensation insurance, fair wages and other expenses required by law, White said.

Horn, a representative of the developer, said, "Our goal is to do a high-quality affordable housing project for the Leeward side."

The project will eventually contain 63 three- and four-bedroom townhouse units.  The first phase of about 17 to 21 units should be complete within two months, Horn said.

Horn said prices will range from $265,000 for a three-bedroom, 1,325 square foot unit to $349,000 for a four-bedroom unit that's about 1,550 square feet.

The state established a Construction Site Inspection Task force in 2010 to investigate and inspect construction sites for unlicensed contractors, undocumented workers, and workforce safety violations. The Nov. 21 raid was the first joint inspection by three state departments as part of the task force effort, officials said.

In 2010, state Regulated Industries Complaints Office investigators from the Department of Commerce and Consumer Affairs received about 2,100 complaints, more than a quarter of which – 550 – related to contracting, according to the task force's first annual report.

"We have a pending investigation (of the Maili project)," said Daria Loy-Goto, acting complaints enforcement officer for the state Department of Commerce and Consumer Affairs. Her department is trying to determine if contractors at the site were properly licensed in Hawaii.

Loy-Goto said she could not release information on pending cases.

The state tax department is investigating whether workers questioned back in November were getting paid off the books so the contractors could avoid paying taxes.

Copyright 2012 Hawaii News Now. All rights reserved.