Comptroller Stringer Debars Contractor that Cheated Immigrant Workers out of $1.7 million in Prevailing Wages and Benefits

K.S. Contracting Corporation employed a kickback scheme that preyed on at least 36 immigrant workers


Newsroom / Press Releases & Statements
FEBRUARY 13, 2017

(New York, NY) – New York City Comptroller Scott M. Stringer today assessed $3.2 million in fines against K.S. Contracting Corporation and its owner, Paresh Shah, for cheating dozens of workers out of the prevailing wages and benefits they were owed under the New York State Labor Law. In addition to being assessed $3.2 million in unpaid wages, interest, and civil penalties, K.S Contracting and Mr. Shah will be barred from working on New York City and State contracts for five years. K.S. Contracting was named as one of the worst wage theft violators in New York in a report by the Center for Popular Democracy in 2015.

“With President Trump taking clear aim at immigrants across the country, we need to stand up and protect the foreign-born New Yorkers who keep our City running. Every New Yorker has rights, and my office won’t back down in defending them,” New York City Comptroller Scott M. Stringer said. “Contractors might think they can take advantage of immigrants, but today we’re sending a strong message: my office will fight for every worker in New York City. This is about basic fairness and accountability.”

K.S. Contracting was awarded more than $21 million in contracts by the City Departments of Design and Construction, Parks and Recreation, and Sanitation between 2007 and 2010. Projects included the Morrisania Health Center in the Bronx, the 122 Community Center in Manhattan, the Barbara S. Kleinman Men’s Residence in Brooklyn, the North Infirmary Command Building on Rikers Island, Bronx River Park, the District 15 Sanitation Garage in Brooklyn, and various City sidewalks in Queens.

The Comptroller’s Office began investigating the company after an employee filed a complaint with the office in May 2010. The multi-year investigation used subpoenas, video evidence, union records, and City agency data to uncover a kickback scheme that preyed on immigrant workers.

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Historic Occasion:City Council Passes Wage Theft Ordinance in 11-0 Vote

By Seth Daniel
April 29, 2016
It was an historic occasion on Monday night when the Chelsea City Council voted unanimously to enact a Wage Theft Ordinance – the first Council in the state to do so.

The City’s wage theft ordinance, brought to the floor by nine councillors earlier this month, would seek to make a statement about the prevalence of wage theft from employees, but in particular from vulnerable immigrant communities in the city. Practically speaking, the ordinance states that no contractor (or any subcontractor) or vendor hired by the City can have a federal or state criminal or civil judgment, administrative citation, final administrative determination, order or debarment resulting from a violation of the Fair Labor Standards Act or any other federal or state laws regulating the payment of wages within three year prior to the date of any contract with the City. It also calls for any violation of the above laws during a contract period be reported to the City within five days.

It also includes a provision that allows the License Commission to deny any permit or license if violations of the law have been made within three years of any application. If any violation of the above law occurs during a licensed period, the Commission can also take action on a license for the violations.

Wage theft is defined roughly as not paying minimum wage, not paying overtime, withholding pay and sometimes not paying at all.

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NC board takes action against construction firm

Wake GOP legislator wants to change law to protect workers from job misclassification


For businesses that want to install plumbing or heaters in North Carolina, here’s a message from state regulators: Follow the law and treat workers as employees or don’t do business here.

If some legislators have their way, that message will be locked into law during this session of the General Assembly for those companies and other employers. Companies that improperly treat employees as contractors could risk their professional licenses and face steep fines. Those that do would be barred from doing business with the state.

“We’ve got to protect the worker and fair competition in this state,” said Rep. Gary Pendleton, a Wake County Republican who is planning to introduce a bill Monday that would make employee misclassification a violation of the law.

Victory for Workers: Cook Co. Board Passes Anti-Wage Theft Law (VIDEO)

Ashlee Rezin

Wednesday, February 11th, 2015, 11:35am

The Cook County Board of Commissioners on Tuesday unanimously passed legislation that aims to protect employee wages and force businesses to more closely follow labor laws.

Under the ordinance, companies or business owners found guilty of wage theft are barred for five years from obtaining Cook County procurement contracts, business licenses or property tax incentives. Also, companies pursuing business with the county will now have to certify compliance with federal and state wage and labor laws.

“[Wage theft] is unfair to hard-working employees and their families and it’s unfair to competing businesses which are operating within the confines of the law,” said Cook County Board President Toni Preckwinkle, shortly after Tuesday’s vote. “The legislation passed today will make Cook County a national leader targeting wage theft.”

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US Labor Department sues Little Rock, Arkansas, electrical contractor for failing to pay federal contract workers properly

U.S. Department of Labor
Wage and Hour Division

Release Number: 14-2243-DAL
January 7, 2015 

LITTLE ROCK, Ark. — The U.S. Department of Labor has filed a lawsuit with the Office of Administrative Law Judges against LRE Royal Electrical Contractors Inc. and its owner, George E. Smith, to recover $345,077 in back wages for 61 electrical workers. The action also seeks to prevent the company and Smith from obtaining federal contracts for three years.

The filing alleges Smith and his company, doing business as both LRE Electrical Contractors and LRE Electrical, violated the Davis-Bacon and Contract Work Hours and Safety Standards Acts when they paid electrical workers less than the applicable prevailing wage rates and corresponding overtime wages for work performed as part of four government contracts.

The Wage and Hour Division’s Little Rock District Office found that LRE Electrical and Smith did not register electrical workers in approved apprenticeship programs, but classified and paid workers as apprentices. The company and Smith also failed to pay these workers wage rates included in the contracts, which are based on the work an employee actually performs.

“Government contracts specify clearly how pay and benefits must be determined. Employers are required to adhere to these rules and pay workers correctly,” said Cynthia Watson, Wage and Hour administrator in the Southwest. “Contractors know these obligations when they bid on government contracts, and when the contracts are awarded.”

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L.A. City Attorney sues city contractors over alleged wage theft

NOVEMBER 13, 2014 

City Attorney Mike Feuer filed a lawsuit Thursday accusing city contractors involved in building a South Los Angeles animal care facility of shorting about 50 employees out of a quarter-million dollars in wages and attempting to hide their tracks.

The $9.6 million construction contract for the 68,000-square-foot South Los Angeles Animal Care Center project near Western Avenue and 60th Street was awarded in 2009 to Mackone Development Inc., which then delegated some of the work to five subcontractors.

The lawsuit seeks to have Mackone and its subcontractors pay their employees what they are allegedly owed, and also pursues penalties of $2,500 for each violation. City attorneys also want to bar the companies from seeking future city contracts.

“Stealing wages from hardworking men and women is reprehensible and it must end,” Feuer said. “No one – especially city contractors paid with taxpayer dollars – should fail to pay workers what they are rightly owed.”

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Garcia Forest Service debarred from federal contracts for 3 years following US Labor Department investigation

MINNEAPOLIS — A U.S. Labor Department investigation has resulted in the debarment of Garcia Forest Service LLC, and its president, Samuel Garcia, from eligibility for further service contracts with any U.S. government agency for three years. The investigation found that the Rockingham, N.C.-based company violated the McNamara-O’Hara Service Contract Act and the Contract Work Hours and Safety Standards Act by failing to pay fringe benefits, minimum wage, overtime and holiday pay to workers hired for a reforestation project in the Superior National Forest in Minnesota. Administrative Law Judge Kenneth A. Krantz issued the debarment order in Newport News, Va. The consent findings were filed by the department’s Regional Office of the Solicitor in Chicago.

“Contractors that do business with the federal government have an obligation to abide by the law, pay their employees the required contractual rates and benefits, and keep accurate and complete required records,” said Laura A. Fortman, principal deputy administrator of the Wage and Hour Division. “The Service Contract Act requires debarment when violations are found unless the high standard of ‘unusual circumstances’ is met. Debarring this employer illustrates the department’s commitment to vigorous enforcement of government contracting laws and helps level the playing field for law-abiding employers.”

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Redmond Contractor Fined For Wage Violations, Barred From Public Contracts

State labor regulators ordered a Redmond contractor to pay $13,600 in penalties, after concluding the company violated prevailing wage laws.

The Oregon Bureau of Labor and Industries also barred Hard Rock Concrete Inc. and the company’s president from public works projects for three years.

The labor agency announced the penalties Friday. Hard Rock Concrete president Rocky Evans has not yet responded to a message left by The Oregonian regarding the penalties.

Investigators found that seven Hard Rock Concrete contractors were underpaid roughly $8,900 for concrete work at Hillside Elementary School in Eagle Point. The business did a poor job of keeping records and filed incorrect payroll data, according to the state.

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