Independent subcontractors are missing thousands of dollars each after the Social Security Administration changed its method for contracting its hearing reporters, and the firm newly responsible for scheduling those reporters failed to issue on-time payments.
Beginning in February 2017, the Social Security Administration began awarding indefinite quantity contracts to Carmazzi Global Solutions, as well as other contractors, to provide subcontracted verbatim hearing reporters to take notes on Social Security hearings.
Locations for these contracts ranged across the agency’s regional offices, from Pennsylvania to California.
The agency had previously contracted individually with VHRs, who each held their own blanket purchase agreement with the agency to attend and take notes on SSA disability hearings. These VHRs were paid on a per-hearing basis, with a smaller compensation for hearings cancelled within 24 hours of the scheduled date.
When SSA regional offices moved to contracts with companies like Carmazzi to provide VHRs as subcontractors, many of the VHRs that had initially held their own contracts were offered contracts with Carmazzi — some at the same pay rate they had previously held.
“And they did that with lots of people, because they needed the monitors,” said Mary Rehbein, a VHR who contracted both on her own and under Carmazzi with the Columbus, Ohio, SSA office.
“So, basically, they were losing money on myself and other monitors just because they needed bodies. But they did hire new people, and they hired them in at a lower rate. And by August, they said everybody gets $25 a hearing, across the board.”
Carmazzi told VHRs that they would receive payment after a 60-day term, creating a window to give the company time to submit consolidated invoices to SSA.
A VHR that worked hours at the end of November, for example, would receive payment in the beginning of February.
“If I’m scheduled for five in a day, I get a hearing delivery ticket for each hearing, and on the hearing delivery ticket I mark whether the hearing was held — because sometimes people don’t show up and sometimes hearings are canceled for whatever reason,” said Rehbein.
“So I mark on the hearing delivery ticket if that hearing was held or not, and then I sign it and I fax it to the Columbus office that I work out of, and then someone at that office has to OK that hearing delivery ticket. And then it can be paid.”
Struggling to get paid
In interviews with Federal Times, multiple VHRs that worked in Akron and Columbus, Ohio, offices said that though their first payments were usually received on time, later payments arrived late — or not at all.
VHRs also had limited contact with the company overall, as many were only provided the contact information for their own hearing scheduler at Carmazzi.
VHRs who complained about the missing payments to their schedulers were eventually told to reach out to accounts payable, according to multiple VHRs, and when that office got overwhelmed with emails, they were redirected to a website to fill out and submit forms about their late payments.
“My direct contact with Carmazzi just started saying weird things, like, ‘I’m so sorry it’s had to come to this, I haven’t gotten a response from accounts payable either,’ ” said Katarina Jezik, a VHR that worked at both the Columbus and Akron sites.
That contact also told Jezik that if she quit, she would likely not get paid, because the company would prioritize payments for those that were still working.
The VHRs missing payments were also told that they would receive interest on their payments that were more than 60 days late.
At first, the VHRs said, they would receive responses about their missing pay within about 24 hours. But eventually those communications dropped off as well.
“I really have no idea if they’re ever going to pay me,” said Lisa On, a former VHR at the Akron site. On explained that she is missing not only payments for the hearings she was scheduled to work, but also for travel expenses incurred getting to the hearing sites.
“We have car loans, we have insurance, we have rent, we have electric … I could go on and on and on,” she said. “We can’t afford to not receive that money.”
Some VHRs said that they received sporadic payments for past work all at once, making them think that the system was catching up, before they went back to a period of not receiving payment.
Jezik said that she received a series of payments after filling out a form rationalizing why she should get priority payments for her missed paychecks.
“I put in there, ‘I would just really like to thank Angela Carmazzi — she’s one of the owners of Carmazzi — I’d really like to thank her for this, because I’ve been working, am super dedicated and I’m coming to work every day. And I haven’t been paid for 130 days, so I would like to thank her for that.’ Literally three days later I started getting paid, check after check,” said Jezik.
According to many of the VHRs that talked to Federal Times, Carmazzi told subcontractors that they were late in sending payments for hours worked because they had not received payments from SSA. An email obtained by Federal Times confirmed that Carmazzi was telling this to VHRs.
SSA declined to comment, other than to confirm that they did contract with firms in fiscal year 2018 to provide VHR services, and that “those firms are responsible for paying their subcontractors or employees for any VHR duties performed in accordance with the contracts between the firms and those individuals.”
Contracting records listed on the agency’s website revealed that Carmazzi had received a total of 32 indefinite quantity contracts. In October 2017 Carmazzi was awarded more than $5.5 million for work performed at various SSA sites, including $178,641 for the Columbus office and $148,757 for the Akron office.
Carmazzi did not respond to requests for comment on this story.
Some VHRs called the justification for the late payments “just not believable” based on their past experiences with SSA.
“When I had my own BPA, it rarely took 30 days. Actually, [the Columbus office] was really good, and I usually got paid before two weeks was up,” said Rehbein. “I think once or twice it was over a month — that’s what I considered late — and I had to pursue it. But [that happened] maybe, over 12 years, maybe four or five times.”
By mid-September 2018, VHRs working out of the Columbus office decided that they would stop working as long as they were not being paid.
“The office staff had to come in and run the equipment, which means, you know, they’re not doing their work in the back,” said Rehbein. “The hearings don’t get cancelled just because a monitor is not going to be there. They’ll have someone come in and they won’t get the same notes that the VHR would’ve typed, but they will have the audio recording.”
Carmazzi then lost the contract with the Columbus office, and, according to the VHRs, with several other SSA offices across the country. Some VHRs have chosen to contract with the new company responsible for those sites, while others are fearful that the same situation could happen with a new contractor.
Looking for recourse
Though the VHRs submitted complaints to both the Department of Labor and SSA, some were told that, because they were subcontractors, the case was a civil one and therefore would require a civil lawsuit. Some received no responses at all.
On Sept. 24, 2018, Ana Maria Guillen, Eleni O’Leary, Rick Frame, Mark Sitterson, Mary Naufel and Kristen Chapman filed a class action lawsuit in the Superior Court of California against Carmazzi.
“Plaintiffs contend that all class members were denied full payment of their wages, pursuant to applicable federal and state wage and hour laws causing financial loss and injury,” the lawsuit stated.
“Specifically, plaintiffs complain defendants misclassified plaintiffs and all other members of the class as independent contractors, as opposed to employees, at all times in which they worked as VHRs at defendants’ locations throughout California and the country. Plaintiffs contend that defendants failed to pay plaintiffs and all other members of the class the minimum and overtime wages and other benefits to which they were entitled under applicable federal and California state laws.”
But some VHRs are hesitant to engage legal representation because of the associated expenses.
“I’m not even sure where to start, and not a lot of the attorneys really want to get into this without some kind of guarantee up front,” said Matthew Kamalie, a former VHR subcontractor with Carmazzi at the Akron office, who quit after months without payment.
The Sept. 24 lawsuit includes a clause for Carmazzi to pay all attorney fees, though that is subject to the VHRs winning the suit.
Some VHRs also told Federal Times that they worry if the company goes bankrupt because of the contracts it has lost, they will never see their outstanding paychecks.
Jessie Bur covers the federal workforce and the changes most likely to impact government employees.