When the Social Development Commission stopped running its anti-poverty programs and services in 2024, it left many employees and contractors unpaid for completed work.
Nearly two years later, some have received a partial payment, while others are still waiting.
Deja Allen, a former housing intake specialist for SDC, is owed $2,518.09 in gross wages, according to her wage claim.
She said she was out of work for eight months and the unpaid wages affected her tremendously as she figured out how to pay her rent and bills.
“I am thankful for my family being able to assist me while I looked for other employment,” Allen said.
SDC stopped running its anti-poverty programs and laid off staff in April 2024. Since then, the agency has dealt with board turnover, lawsuits and the loss of access to community action funding.
What’s happening with the wage claims lawsuit?
The Wisconsin Department of Justice filed a lawsuit on behalf of the state’s Department of Workforce Development that claims SDC owed nearly $360,000 in back wages and benefits to former employees.
Sarah Woods, former youth and family services staff, was laid off when the agency paused services in April 2024. She filed a wage claim with the Wisconsin Department of Workforce Development, which informed her that she is owed $4,756.
Woods said she last received an update from the state in May 2025, when a representative said SDC would not have more information until the legal process is completed.
Department of Justice Attorney Michael D. Morris said at a status conference last month that William Sulton, SDC’s former legal counsel, is still working behind the scenes with him on reaching a resolution and requested additional time. The next status conference is scheduled for 10:30 a.m. on March 26.
A spokesperson for the Department of Workforce Development said the department isn’t able to provide additional details on the lawsuit’s status or outcomes while litigation continues.
Jorge Franco, interim CEO of SDC and chair of the SDC board, said that paying employees and contractors what they’re owed remains a major priority for SDC. He advised former employees to follow the legal process closely.
“It’ll be upon the attorneys for the claimant to determine what and how they proceed through next steps,” he said.
Contractors still owed
In his more than 40 years providing weatherization services in the Milwaukee area, Jaime Hurtado said SDC had one of the best and most robust weatherization divisions.
Hurtado is the owner and president of Insulation Technologies Inc., or Intec, and worked with SDC for more than 20 years.
SDC received funding for the work through Wisconsin’s Weatherization Assistance Program. The Wisconsin Department of Administration suspended SDC’s participation in the program in March 2024 and began a forensic accounting after it reported a misallocation of funds.
“They had built a professional, top-tier delivery service, a program to deliver these services in weatherization for people who need it the most,” Hurtado said. “It’s a heartbreak to see that go out of existence.”
Franco has said the department refused to reimburse SDC for nearly $490,000 in weatherization work and let it continue accumulating expenses before shutting down the program.
Intec and two other contractors, Affordable Heating and Air Conditioning Inc. and DMJ Services LLC, otherwise known as Action Heating & Cooling, sued SDC on claims that it failed to pay for weatherization work completed under contract in 2023 and 2024.
A judge granted the contractors a money judgment of $186,517.03 plus statutory costs and interest in October. About $112,500 of that would go to Intec, but it hasn’t been collected yet.
Jon Yakish, owner of Micro Analytical Inc., said his asbestos-testing laboratory has not been paid for 90% of the contracts it had with SDC before it closed.
“It wasn’t that big of a deal,” he said, estimating the remaining unpaid work cost around $2,300. “And I know there’s other people out there where it was a much bigger deal, so it’s hard for me to complain.”
Loss of work
More than the missing payments, Yakish and Hurtado’s businesses have felt the sustained impact of losing a loyal customer.
Intec continues to perform work in the state’s weatherization program, Hurtado said, but at a reduced level. He said other providers have brought in a smaller volume of business than SDC.
“We just move our attention to other parts of the market,” Hurtado said.
Yakish said Micro Analytical also hasn’t received the same amount of business it had from SDC from the other organizations that have taken over the weatherization program services in Milwaukee.
“We don’t want to rely on the government, but it is a baseline of work that’s always going on, that kind of, in a way, helps us be recession proof,” Yakish said.
Moving on
Hurtado said the lawsuit was the only way to secure Intec’s rights to collect the money that it’s owed, though he acknowledged that SDC owes other lenders and suppliers.
“Who knows if they’ll have enough money to pay our balance, but at least we’ll be in the list,” he said.
The $112,500 amount is about 25% of the total amount Intec was owed from SDC, Hurtado said. He said the state worked with other weatherization service agencies to pay Intec the other 75%, which helped the company.
“Thank God we’re diversified enough, and we’re a strong company,” he said.
Yakish said he submitted invoices and data on work performed at the state’s request in order to get paid, and a few contracts were paid. He became frustrated after the companies that had taken over SDC’s weatherization contracts kept asking for the same information.
“I kind of told them, ‘Look, I’m throwing my hands up. This is the last time I’m doing this,’” he said. “So I don’t know if they took that as I was unwilling to work with them or whatever, but it just seemed really clear that nothing was actually going to happen.”
Meredith Melland is the neighborhoods reporter for the Milwaukee Neighborhood News Service and a corps member of Report for America, a national service program that places journalists in local newsrooms to report on under-covered issues and communities. Report for America plays no role in editorial decisions in the NNS newsroom.
Jonathan Aguilar is a visual journalist at Milwaukee Neighborhood News Service who is supported through a partnership between CatchLight Local and Report for America.
Republish our articles for free, online or in print, under a Creative Commons license.
