Labor Dept. investigating home builders

The U.S. Department of Labor is apparently probing the pay practices of home builders:

The Labor Department is investigating pay practices at many of the top companies in home building, hitting them with a broad demand for records that has led to complaints of regulatory overreach.

Recipients of the letters include PulteGroup Inc., Lennar Corp., D.R. Horton Inc. and KB Home, according to people familiar with the matter. A Labor Department spokeswoman confirmed the investigation but declined to discuss details.

A copy of one letter, dated Aug. 1 and reviewed by The Wall Street Journal, said the department was opening a probe under the Fair Labor Standards Act, which governs matters such as overtime pay and limits on using teen workers.

The letter instructed the home builder 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. ...

Many larger home builders, while acquiring land for homes and marketing them, entrust much of the construction to carpenters, electricians and others employed by contractors. The contractors rarely are unionized.

Unions have for years complained about pay and working conditions in the industry, alleging pay scales below minimum wage and failure to pay overtime. The Laborers International Union of North America in 2008 issued a study that called employees at home builders the "newest victims" of the housing market crisis because of "underpayment." ...

"There has been a movement afoot in many instances fueled by the unions to force the subcontractors to be employees of the builders, because the next step is to unionize them," said Mr. Howard of the National Association of Homebuilders.