US construction company pays 31 million euros after allegations of exploitation in Milan

The USA is building a new consulate in Milan. Construction company Caddell Construction recruits many workers in India and threatens them if they don't work overtime. The Italian justice system investigates exploitation, the company pays - there is a happy ending for some workers.

The US construction company Caddell Construction has agreed to pay around 31 million euros as part of an investigation into alleged exploitation of workers on the construction site of the new US consulate in Milan. Almost 20 million euros will go to the workers, including for overtime and as compensation for non-material damage, according to a document obtained by the Reuters news agency that the company presented to the Milan public prosecutor's office.

In addition, more than seven million euros are earmarked for the Italian social security agency INPS and almost four million euros for the labor inspectorate. However, the company from the state of Alabama did not admit any legal responsibility.

The Italian Labor Minister Marina Calderone spoke of one of the most significant actions against labor exploitation in recent years. "The result strengthens Italy's international reputation and sends a clear message that the state will not abandon its most vulnerable workers." A statement from Caddell was not yet available.

Caddell's Italian subsidiary was placed into receivership at the end of May. The Milan public prosecutor's office and the Carabinieri accused the company of recruiting workers in India through an intermediary in New Delhi and forcing them to work excessively long shifts without occupational protection and with poor pay under the constant threat of dismissal.

Italy wants to recognize residence status

According to insiders, the agreement that has now been reached includes the legalization of the status of around 500 workers. In addition, the Italian state recognized the residence permits for 270 foreign workers, and 60 laid-off workers received unemployment benefits. Once the payments are received, prosecutors are expected to request a dismissal of the case against Italy's Caddell unit, one person said. Pleas in criminal proceedings are being sought for two of the company's executives who were arrested.

Construction of the US consulate in Milan began in 2022. The contract is worth almost $210 million. Completion, originally planned for 2025, has now been postponed to 2028. The case is the latest in a series of exploitation investigations pushed forward by Milan prosecutor Paolo Storari in recent years. These investigations forced companies to grant broader employment rights to more than 60,000 workers and allowed authorities to recover more than a billion euros. At the same time, they sparked a heated debate about whether the Italian judiciary is exceeding its authority.