Labor Department investigating home builders

The federal government has begun an in-depth investigation of possible wage infractions in the residential construction industry, according to an article in the Wall Street Journal. 

So far, government officials have sent out broad demands for records on wages paid and hours worked by direct employees of home builders, as well as those working for their contractors. Recipients of the letters include PulteGroup, Lennar, D.R. Horton and KB Home, according to people familiar with the matter. A Labor Department spokeswoman confirmed the investigation but declined to discuss details.

The letter instructed the home builders to immediately turn over the names, addresses, Social Security numbers, pay rates and hours worked for all employees over the past two years. It asked the names of all contractors hired in the past year. The letter didn't allege any specific violations of law.

Nancy Leppink, acting director of the labor department’s wage and hour division, told the New York Times that the government was focusing on the residential construction industry because it had so many vulnerable immigrant workers and because some construction contractors had been misclassifying workers as independent contractors to circumvent wage laws.

Executives in the residential construction industry called the investigation yet another example of overaggressive regulation in the Obama administration. The Leading Builders of America, an association of 19 production home builders, said the inquiry was overly broad and “especially troubling given that no issues have been identified to warrant an investigation,” according to the Times.