A New Hampshire drywall company and its owner have been sued for allegedly misclassifying employees as independent contractors, Attorney General Martha Coakley’s office announced on Friday.

The lawsuit, filed Thursday in Suffolk Superior Court, alleges that Universal Drywall LLC and its owner, Richard Pelletier of Auburn, N.H., violated the Massachusetts Consumer Protection Act and the Massachusetts False Claims Act to gain an unfair competitive advantage over companies in Massachusetts.   

"Employers are required to pay employees a lawful wage for each hour of work on construction projects, maintain accurate payroll records and produce those records upon demand," Coakley said in a statement. "We enforce these laws not only to protect workers, but to level the playing field for all businesses that play by the rules."

In 2013, The Fair Labor Division of the Attorney General’s Office began an investigation into Universal’s hiring practices at One North of Boston, a residential construction project in Chelsea. The investigation began after the office received reports that the company had been hiring workers from New Hampshire and misclassifying them as independent contractors, in violation of the Massachusetts Independent Contractor Law.

These reports mirrored previous claims reported to the AG’s Office regarding the company’s hiring practices on publicly funded projects at the Tahanto Regional High School in Boylston and the Douglas Intermediate School in Douglas in 2011 and 2012.

The lawsuit alleges that Universal misclassified workers to save costs associated with hiring the same workers as lawful employees. As a result, Universal was  able to obtain contracts by underbidding its competitors by requiring the workers and not the company, to absorb the burden of an employer’s overhead costs.

It also alleges that Universal was responsible for creating and submitting false records relating to the misclassified workers employed on the Tahanto High School and Douglas Intermediate School projects, in violation of the Massachusetts False Claims Act.