Rivian subcontractors fined and forced to reimburse back pay
Illinois Attorney General Kwame Raoul has settled a labor dispute with three companies doing work at the Rivian plant in Normal for $390,000 in back wages and penalties. The settlement stemmed from a joint investigation by the attorney general’s office and the Illinois Department of Labor.
Mike Raikes, the business manager for the International Brotherhood of Electrical Workers union in the Twin Cities, said the Chinese, Spanish, and Mexican companies hired subcontractors to build Rivian's production line who were violating worker rights.
"The subcontractors were bringing them in from Mexico and they were receiving their paychecks in pesos back in Mexico," said Raikes.
He said they typically worked 60 to 80 hours per week.
"They were not getting compensated for overtime hours. On top of that it leads to a lot of questions whether these people were paying into taxes. It hurt our local workforce. It hurt our local contractors," said Raikes.
Raikes said it is sad companies go to extreme lengths to intentionally break the law. The firms in question also do work at other auto plants in the U.S.
The settlements require China-based Guangzhou Mino Equipment Co. (Mino); Spain-based IT8 Software Engineering, S.L. (IT8); and Mexico-based LAM Automation (LAM) — along with the companies’ related entities — to pay owed overtime wages and civil penalties to 54 workers.
“Any company doing business in our state must follow laws that require workers to be fairly compensated for the hours they work,” Raoul said. “This settlement should send a message that employers cannot hide behind subcontractors to avoid responsibility for stolen wages.”
According to the attorney general’s office, the three companies used an elaborate subcontracting arrangement that allowed them companies to deny overtime pay.
After Rivian hired Mino to help build assembly lines at its facility in Normal, Mino then subcontracted work to IT8. IT8 then further subcontracted to LAM to obtain much of the workforce Mino used to fulfill its obligations to Rivian. IT8 and LAM helped laborers in Mexico obtain visas, including non-immigrant NAFTA Professional (TN) visas, to work for IT8 and Mino at electrical vehicle plants in the U.S., including Illinois’ Rivian plant. Although LAM was responsible for issuing payments to the workers, Mino and IT8 shared significant control over their work and their conditions of employment, said the attorney general.
The settlements require Mino, IT8, and LAM to obtain certifications from any future subcontractors the companies use in Illinois to guarantee the subcontractors will follow Illinois law.
Raikes said he believes the issues could have been prevented if Rivian had signed an agreement with the union to use union workers.
Rivian declined comment Wednesday afternoon 12/22.