Angel Torres says Environmental StoneWorks, a subsidiary of the largest manufacturer of exterior building products in North America, paid immigrant workers less at its North Branch factory. Torres was speaking at a demonstration with LIUNA and state lawmakers on June 24 in front of an affordable housing development in Fridley where the company was installing stone veneer. Photo by Max Nesterak/Minnesota Reformer.

Latino workers for a subsidiary of the largest manufacturer of exterior building products in North America say they were paid less than white workers because they were immigrants and allege Environmental StoneWorks has misclassified scores of workers to avoid paying overtime and other benefits.

Angel Torres worked at Environmental StoneWorks’ North Branch factory for nearly 15 years — including nine years as a foreman — and said white American workers were treated better in every way: They enjoyed higher wages, two more breaks a day and easier work assignments manufacturing stone and brick veneer products.

“When I asked why they received better treatment, my boss told me that Americans were not used to working as hard as Latinos,” Torres said in Spanish through an interpreter.

Torres said he was fired in December after continuing to complain about the disparate treatment of white and Latino workers. He said some of his colleagues did not show up to work the next day in protest of his termination and then were fired.

“Environmental StoneWorks claimed they discovered they didn’t have work authorization,” Torres said. “That’s a cruel joke because it was always obvious that management believed some of the workers were undocumented.”

Environmental StoneWorks did not respond to phone calls and emails seeking comment.

Torres was speaking at a news conference this week flanked by state Democratic lawmakers and LIUNA union members, who parked a billboard truck in front of an affordable housing development in Fridley where Environmental StoneWorks is installing stone veneer.

Lawmakers and union leaders decried the use of the company, which they say is a known bad actor, on a project receiving significant tax breaks: Callisto Commons developed by Roers Companies received tax increment financing and low-income housing tax credits to offset the cost of building 169 affordable apartments.

“I get really excited when I see homes being built because we have an enormous housing crisis… but when I find out homes are being built like this and workers are being exploited, I get angry,” said Rep. Michael Howard, DFL-Richfield and chair of the housing committee.

Earlier this year, Howard and his Democratic colleagues passed a law that will make Minnesota the first state in the country to require developers that receive state subsidies or federal low-income housing tax credits to pay a prevailing wage and hire subcontractors with clean records of following labor laws.

Democrats also increased penalties for misclassifying workers as independent contractors and streamlined the test used to determine if construction workers are independent contractors.

Another worker, Eduardo Canales, said at the news conference that he has been working exclusively for Environmental StoneWorks for four years as an independent contractor installing siding on apartments, restaurants and other developments — though he did not work on Callisto Commons.

He said he believes he should be treated as an employee, which would entitle him to overtime pay, workers’ compensation coverage, unemployment insurance and other protections.

Instead, he said he routinely works over 70 hours a week and has never been paid overtime.

“I came to this country to provide for my family. I am simply asking that they treat us as employees and pay us what is fair by the laws of this country,” he said in Spanish through an interpreter at the Monday news conference.

A spokeswoman for Roers shared a statement on behalf of the company, saying, “We have a robust prequalification process for all of our trade partners, and we haven’t had any issues or complaints reported to our team regarding the contractors on this job site.”

LIUNA Minnesota & North Dakota, a union representing more than 12,000 construction workers, says it has collected dozens of interviews from Environmental StoneWorks workers with similar stories of being denied overtime pay.

LIUNA says the Department of Labor and Industry is investigating the allegations based on worker interviews the union conducted. Workers also filed complaints with the Minnesota Department of Human Rights.

A DLI spokesman would not confirm if there is an investigation. He said the agency has no public information regarding Environmental StoneWorks or its parent company Cornerstone Building Brands, including any past labor violations in the state.

Environmental StoneWorks was flagged in a report by the union-backed think tank North Star Policy Action about public funding for affordable housing flowing to contractors either confirmed or alleged to have violated labor laws.

The report cites a LIUNA interview with worker Marco Antonio Ramirez Jimenez, who said he fell from a ladder and broke his foot while working for Environmental StoneWorks in 2021. Ramirez Jimenez said his boss initially told him to lie about his identity at the hospital, and that the company only paid for his medical bills after he hired a workers’ compensation lawyer.

In its report, North Star Policy Action identified 33 construction projects that have received over $84 million in taxpayer subsidies while employing contractors tied to proven or alleged worker exploitation.

A worker named Enrique Lopez also told the Minnesota attorney general’s advisory task force on misclassification that he was never paid overtime by Environmental StoneWorks, which treated him as an independent contractor.

Minnesota’s new labor standards

Over the past five years, Minnesota legislators have passed a slew of laws aimed at cracking down on wage theft.

In 2019, Minnesota passed one of the nation’s toughest wage theft laws, making it a felony to steal more than $1,000 in wages, in line with other forms of theft. Few people have ever been charged criminally with wage theft, however.

In 2023, Minnesota Democrats built on that law by making general contractors liable for wage theft by their subcontractors. The law aimed to flip the balance of power between workers and general contractors to ensure workers are made whole sooner.

Nearly a quarter of construction workers in Minnesota — about 30,000 people — are misclassified or paid off the books, according to an estimate by the Midwest Economic Policy Institute. The think tank estimates misclassified workers earn 36% less in Minnesota and the state loses $136 million in tax revenue each year due to construction payroll fraud.

Before the law was passed, workers would have to report it to government regulators or else hire an attorney to sue their employer for back wages — steps few workers were willing to take, especially given many in the construction industry are undocumented immigrants. Now, general contractors are responsible for back wages for workers who’ve been cheated on their job sites and could take legal action to recover it from the subcontractor.

The law, which will apply to applications for funding submitted after Aug. 1, also requires project developers to hire “responsible contractors.” If any contractor or subcontractor is found to have violated wage laws on a publicly subsidized project, the developer must create a wage theft prevention plan and could be barred for three years from receiving more state funding if more violations occur.

This year, legislators also increased penalties for misclassifying employees as independent contractors, up to $10,000 for each violation. Starting March 1, 2025, DLI will also be able to issue stop work orders where violations are occurring.

“When immigrant workers are exploited … it hurts those workers, but it also hurts everyone else,” said Rep. Emma Greenman, DFL-Minneapolis, who authored the misclassification law. “What they are doing is trying to use and exploit the most vulnerable in order to bring the wages and the standards and the laws down for everybody.”

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