The US construction company “Caddell Construction“ has officially agreed to pay 30.941 million euros ($35.24 million) as part of an investigation into alleged exploitation of workers at the construction site of the new US consulate in Milan, Reuters reported, citing a document it has seen.
The Alabama-based company will pay nearly 20 million euros to workers for overtime, reimbursement of accommodation costs and compensation for non-pecuniary damage. Payments of more than 7 million euros to Italy’s National Social Security Institute (INPS) and almost 4 million euros to the Labor Inspectorate are also planned.
In a letter to the Milan prosecutor’s office, signed by Chief Executive Officer Michael Angelo Ranieri, the company stressed that the commitments made do not constitute an admission of wrongdoing or acceptance of the legal and factual assessments of the authorities.
„Cadel Construction“ did not respond to a Reuters request for comment. In a statement in June, the company said it was actively cooperating with the judicial authorities and was committed to ensuring fair treatment and pay for workers.
The company’s Italian unit was placed under judicial administration on May 29 as part of an investigation into alleged labor exploitation. The measure was upheld by a judge two weeks later.
The Milan prosecutor's office and the Carabinieri allege that the company recruited workers from India through an intermediary based in New Delhi and employed them in grueling shifts, with low pay, without necessary safety measures and under constant threat of dismissal.
According to two sources with direct knowledge of the case, the agreement includes the regularization of the employment status of about 500 workers, recognition by Italian authorities of residence permits for 270 foreign workers and unemployment benefits for 60 dismissed employees.
After the payments are made, the Milan prosecutor's office is expected to request the dismissal of the proceedings against the Italian unit of “Cadel“, one of the sources said. He said prosecutors are expected to reach plea agreements with two company executives arrested in the investigation.
„Cadell Construction“ specializes in large-scale projects, including the construction of U.S. embassies and military facilities. Construction of the new consulate in Milan began in 2022 under a contract worth almost $210 million. The original completion date was 2025, but was later pushed back to 2028.
In June, a State Department spokesman told Reuters that U.S. law enforcement was cooperating with Italian authorities and that the U.S. government did not tolerate labor exploitation.
The case is part of a series of labor exploitation investigations led in recent years by Milan prosecutor Paolo Storari. According to Reuters, they have led to the granting of fuller employment rights to more than 60,000 workers and the recovery of more than 1 billion euros from the authorities. The investigations have also sparked a heated debate about whether the Italian judiciary is overstepping its authority.