Foreign workers constructing the $350 million American Consulate in Milan were paid less than $2 per hour after deductions, according to Associated Press interviews with five former employees and a review of employment letters and pay stubs. Two managers were arrested this month on suspicion of labor exploitation, with prosecutors alleging that workers were forced to work 10-hour days, six days a week, and charged illegally for room and board.. The probe involves some 70 workers, mostly from India and Kenya, and has drawn scrutiny from both the U.S. State Department and Italian authorities.

€25,000 Promised, €500 Received: The Gap Between Contract and Pay

According to the Associated Press , workers received employment letters on Caddell stationery promising annual salaries exceeding €25,000 (nearly $29,000). instead, after deductions for room and board, some workers were paid as little as €500 (less than $580) monthly — effectively under $2 per hour. Prosecutors allege that Caddell illegally deducted these costs from wages, a practice that Italian labor law generally prohibits. The workers, many of whom were trained electricians with experience in Persian Gulf countries, said they were fired without cause earlier this year after questioning management about their pay.

Two Managers Arrested While Trying to Flee Italy

Italian prosecutors said that two Caddell managers were arrested this month, one while boarding a flight to leave the country and another who was planning to flee. The arrests signal the seriousness of the investigation, which was launched about six months ago. The U.S. State Department said it is investigating the allegations and that U.S. law enforcement is working with Italian authorities. Caddell , the main contractor on the project, stated it is “fully cooperating” and conducting its own “comprehensive inquiry” into subcontractor compliance.

An Echo of U.S. Embassy Construction in Nairobi

Several of the Kenyan workers said they had previously been employed by Caddell on a multi-million-dollar extension of the U.S. Embassy in Nairobi before being transferred to Milan. This raises questions about whether similar labor practices occurred on other U.S. diplomatic projects. The Nairobi embassy extension was a high-profile project,and the alleged pattern of underpayment suggests a systemic issue rather than an isolated incident. As the Associated Press reported,the workers provided documentation and spoke on condition of anonymity out of fear of retaliation.

What Remains Unknown About the Hiring Chain

While Caddell has promised an internal inquiry, key questions remain unanswered. who specifically authorized the deductions from wages? Were local subcontractors acting independently, or did Caddell management approve the pay structure? And how many more workers, beyond the 70 identified, may have been affected? The State Department has not disclosed whether it will withhold payments or impose penalties on Caddell pending the investigation. Without full transparency from both the contractor and the U.S. government, the full extent of the exploitation may never come to light.