U.S. Consulate Build Sparks Wage Scandal

A U.S. contractor agreed to pay about €31 million after Italian prosecutors alleged migrant workers on the new Milan consulate earned under $2 an hour.

Story Snapshot

Prosecutors, a court administrator, and Caddell Construction signed a nearly €31 million settlement.
More than 60 laborers signed compensation deals; hundreds more are identified for payment.
Workers described 10-hour days, six days a week, with illegal housing deductions.
Caddell says payments do not admit wrongdoing and it is cooperating with authorities.

What the Settlement Does and Does Not Decide

Reports say Milan prosecutors, a court-appointed administrator, and Alabama-based Caddell Construction signed a settlement of nearly €31 million, about $35 million. The money covers back pay and damages for foreign workers at the U.S. consulate site. Reuters reported a formal commitment to pay €30.941 million. The company told prosecutors the financial commitments are not an admission of wrongdoing. The related criminal probe of managers remains open, so legal findings are not final.

More than 60 laborers, most from India, signed compensation deals tied to the larger settlement, which includes unpaid overtime and reimbursement for housing costs deducted from wages. Reuters reported the plan covers overtime, housing reimbursements, and non-material damages. The arrangement also aims to regularize the work status of many on site, signaling a broad remedy rather than a narrow fix. Figures vary across reports as authorities review worker lists and hours.

What Workers Say Happened on the Ground

Interviews by the Associated Press describe a pattern: long shifts, six days a week, and wages that dropped below $2 per hour after deductions. Prosecutors alleged illegal deductions for room and board, plus unpaid overtime. Former employees said they were promised fair pay before travel but faced tight control of hours and housing costs at the site. Union experts reviewed pay slips, but public reporting says the authenticity of some stubs was not fully verified at the time.

Italian judges placed Caddell’s Italian unit under judicial administration earlier in the probe, which increased oversight of site practices while work continued. That step showed the court’s concern about labor conditions and record-keeping. Reuters said Caddell’s letter to prosecutors emphasized cooperation and internal checks across subcontractors. These statements outline the company’s position while acknowledging that authorities hold the legal pen for now.

Why This Case Hits a Nerve in the U.S. and Abroad

This is a U.S. diplomatic project on European soil. That raises hard questions about who watches the watchers. When workers building a U.S. consulate say they earned poverty wages, people across the political spectrum see a familiar failure: powerful institutions outsourcing risk and looking the other way. The settlement’s size suggests systemic problems across layers of subcontractors. That mirrors broader construction trends where migrant labor faces wage theft and opaque deductions.

Both conservatives and liberals can find cause for concern here. Taxpayers expect clean books and fair pay on federal projects. Workers expect honest terms for hard work. Instead, prosecutors allege illegal deductions and crushing hours. Caddell says it is cooperating and not admitting fault. Until the criminal case concludes, the full truth sits in court files. For now, money is flowing to workers, and oversight is tighter. That is progress, but it should not have taken this long.

What to Watch Next

Watch for the court to release more detail on how payments are calculated worker by worker. Look for timelines to complete payouts and to regularize employment status for those still on site. Track whether prosecutors file charges against additional managers or subcontractors. Seek records from the United States Department of State on contract oversight and prior warnings. Transparency from all sides will test whether this is a one-off fix or a turning point for labor on public projects.