Attorney General Brian L. Schwalb today announced that Brothers Mechanical Inc., a construction company that has worked on large development projects in NoMa, Navy Yard, and other DC neighborhoods, will pay $1.5 million to resolve allegations that the company and its subcontractors misclassified hundreds of workers as independent contractors, depriving them of wages and benefits they were legally entitled to.

Under the terms of a settlement agreement resolving an investigation by the Office of the Attorney General (OAG), Brothers Mechanical will pay $500,000 to impacted workers and $1 million to the District in penalties. The company will also be required to change its subcontracting practices and submit to compliance monitoring for three years. 

“DC workers are the backbone of our economy, and especially at a time when the cost of living in DC continues to rise, I will continue to prioritize ensuring that workers receive the wages and benefits they have earned,” said Attorney General Schwalb. “This settlement puts money back in the pockets of hundreds of construction workers and sends a clear message that businesses will face consequences when they break the law, cheat workers, and undercut law-abiding competitors.”

“When companies illegally label employees as independent contractors, or misclassify them to a lower standard, they avoid paying proper wages, benefits, workers’ compensation, and payroll taxes. This is all-too common in the construction industry, and creates an uneven playing field where law-abiding contractors, who invest in trained workers and follow all regulations, are undercut by those cutting corners,” said Chuck Sewell, Marketing Director for the International Association of Sheet Metal, Air, Rail, and Transportation Workers (SMART) Local 100. "We thank Attorney General Schwalb and his team at the OAG’s office for working to ensure the industry is safe and fair for all contractors and workers in the District.”

Brothers Mechanical specializes in design, installation, and service of air conditioning, heating, ventilation, plumbing, and control systems. It has worked on construction projects in the District, including multiple mixed-use and residential projects in NoMa (Armature Works, a mixed use development at 1200 3rd St NE; the Gantry, a mixed use development at 300 Morse St NE; Cielo, an apartment building at 300 M St NE; and another mixed-use development that includes the Hale apartments at 1150 1st St NE), a large mixed-use development in Navy Yard (Urby at 1399 Yards Pl SE), and a mixed-use building in the Stacks development at Buzzard Point (100 V St SW).

OAG uncovered evidence that from 2020 through the present, Brothers Mechanical entered into agreements with subcontractors to provide about 500 construction workers to staff its projects, and that these workers were illegally misclassified as independent contractors. Because these workers were misclassified, they were not paid overtime premiums when they worked more than 40 hours in a week, were deprived of paid sick leave they earned, were required to pay more in taxes than they would if they were properly classified as employees, and were excluded from critical safety net programs for employees, including unemployment insurance and workers’ compensation.

To resolve OAG’s wage theft investigation, Brothers Mechanical must:

•  Pay $500,000 to workers.
   
• Pay $1 million in penalties to the District.
   
• Make significant changes to ensure compliance with DC wage and hour laws. This includes requiring any subcontractors to submit certified weekly payroll information, randomly auditing subcontractor payrolls on DC projects, and training workers to identify suspected wage and hour violations.  
   
• Submit to three years of compliance monitoring by OAG.

The settlement is available here.

This matter was handled by Assistant Attorneys General Jude Nwaokobia and Anabel Butler, Workers’ Rights and Antifraud Section Chief Graham Lake, and Workers’ Rights and Antifraud Section Assistant Chief Dennis A. Corkery.

What is worker misclassification?
Misclassification is a form of payroll fraud that reduces labor costs for companies at the expense of workers. When companies improperly classify their employees as independent contractors, the workers are deprived of rights and benefits they are legally entitled to as employees, including minimum wage, overtime compensation, and paid sick leave. By engaging in illegal misclassification, companies also shift their own tax burden on to the workers they improperly classify as contractors and deprive the District of tax revenue, unemployment insurance premiums, and workers’ compensation contributions. Additionally, construction companies that violate the law and misclassify workers undermine fair competition and undercut law-abiding competitors.

OAG’s Efforts to Protect Workers 
OAG’s Workers’ Rights and Antifraud Section is dedicated to fighting wage theft, protecting District workers, and ensuring that businesses in the District compete on a level playing field. Since AG Schwalb became the District’s elected, independent Attorney General in January 2023, OAG has secured more than $23 million for workers and the District. In total, since gaining independent wage theft enforcement authority in 2015, OAG has secured over $39 million by investigating and bringing enforcement actions against employers who violate District law. OAG’s wage theft enforcement efforts have focused on industries with high populations of vulnerable workers, such as construction, restaurants and hospitality, healthcare, and the gig economy. Learn more about OAG’s efforts to uphold workers’ rights over the last year in OAG’s 2025 Labor Day Report.  

How to Report Wage and Hour Violations
Workers who believe that their rights have been violated, or that they have experienced wage theft or other wage and hour violations, can contact OAG by calling (202) 724-7730 or by emailing workers@dc.gov or trabajadores@dc.gov.