HONOLULU (HawaiiNewsNow) - Investigators from the state tax, labor and business departments raided construction sites Monday at at least nine boutiques and food establishments near Bloomingdale's in Ala Moana Center's newest wing, which is still under construction.
They were acting on a complaint by the Hawaii Construction Alliance, which represents five unions including the carpenters, after their undercover informants made troubling findings.
"Workers are being paid in cash by these contractors and subcontractors which begs the question: are they filing the proper paperwork with the state?" said Tyler Dos Santos-Tam, executive director of the Hawaii Construction Alliance. "Are they paying the right wages? Are they covering their employees with workers comp and medical?"
State Labor Director Linda Chu Takayama said the complaint against the construction sites alleged unlicensed activity.
"There might be some workers there being perhaps mis-classified as independent contractor when they actually were employees," she said.
The state is trying to verify that contractors and subcontractors have the proper licenses and are paying state and federal taxes, that they are not committing payroll fraud and are not shortchanging workers on benefits.
"Are they being fairly treated? Are they being covered? Are they at risk, even though they're working on these glamorous types of shops," Chu Takayama said.
Francis Cofran, general manager at Ala Moana, which is owned by General Growth Properties, said the mall was notified of the investigation and is cooperating.
"At this point, this is an issue between the state investigators and some tenants. And we are closely monitoring the situation because GGP requires its tenants to fully comply with all applicable laws and regulations," he said.
The investigation is expected to take several months and contractors who are found to have committed violations could face large fines.
The wing is slated to open November 12.
"It's no secret that they're under the gun to finish the wing by November 12 so they can be open before black Friday and Christmas," Dos Santos-Tam said. "But no one should be prioritizing Black Friday and Christmas profits over the safety and well being of Hawaii workers."
Sources said some construction workers ran away from the site as investigators arrived Monday morning.
The investigators were not targeting contractors working on the Bloomingdale's store, sources said.
Hawaii Construction Alliance represents about 15,000 members, including carpenters, cement masons, bricklayers, and operating engineers. The alliance is made up of these trade unions: Hawaii Regional Council of Carpenters, the Laborers' International Union of North America, Local 368, the Operative Plasterers' and Cement Masons' Union, Local 630, International Union of Bricklayers & Allied Craftworkers, Local 1, and Operating Engineers, Local Union No. 3.