US construction giant agrees to a $35 million settlement for workers building the Milan consulate

MILAN (AP) — The U.S. company building the new American consulate in Milan has agreed to a nearly 31-million-euro ($35 million) settlement that includes back pay and damages to foreign workers who prosecutors allege were paid less than $2 an hour, officials said Monday.

The settlement was signed by the Milan prosecutors, Alabama-based multinational Caddell Construction and the court-appointed administrator that took over the construction site following the investigation into exploitative labor practices.

Caddell remains under administration, and the criminal investigation against the company and two of its managers in Italy is continuing, prosecutors said.

Caddell did not immediately respond to a request for comment.

Italian Labor Minister Marina Calderone called the probe “one of the most significant operations in recent years against illegal labor contracting and worker exploitation,” and said the outcome showed that the state would not abandon vulnerable workers.

Unions helping the workers welcomed the settlement, describing it as the largest of its kind in Europe.

Nearly 300 workers identified so far will receive on average 50,000 euros ($57,000), with some receiving up to 90,000 euros ($102,000) in unpaid wages and damages for emotional distress, said Luca Stanzione, the secretary general of the Milan branch of CGIL, a major trade union confederation.

“The compensation is an excellent result achieved through the efforts of prosecutors and trade unions,” Stanzione told The Associated Press. The CGIL’s construction union has been actively helping dozens of workers involved in the case.

Of the total, about 19.7 million euros is earmarked for direct payments to workers, with the remainder covering obligations to Italy’s social security authorities and labor inspectorate.

Most of the workers involved were from India, where they were recruited. The AP also spoke to workers who were recruited from a Caddell embassy project in Africa.

Milan prosecutors say that the workers were constantly exploited. After being promised a fair wage during recruitment, their pay stubs showed that they received less than $2 an hour and that food and housing had been illegally deducted from their wages. The minimum wage for construction workers in Milan starts at 13.19 euros (over $15) an hour.

The building site was put under judicial administration to restore legal operations. The new Milan consulate campus is being built on a 10-acre (40,000-square meter) site at a former shooting range, and will replace the current consulate that is located in a high rise.

Separately, dozens of workers have been granted unemployment benefits, while 265 have received special residence permits and applications for the remaining workers are being processed, according to the Labor Ministry.