Suffolk County DA: Businesses cheated workers, state (NY)

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Wage and benefit fund theft, wage violations, and fraud in unemployment insurance & workers comp were among alleged crimes, prosecutors say.

Michael DeSantis
March 9, 2020

SUFFOLK COUNTY, NY – Eight people and nine businesses have been charged in a labor-related crackdown in Suffolk County.

The crimes collectively saw the theft of more than $250,000 in employees’ wages and benefits, nonpayment of more than $58,000 to the Department of Labor for unemployment insurance fund contributions, and failure to pay more than $133,000 to the state’s insurance fund for workers’ compensation insurance premiums, prosecutors said. Two defendants also illegally dumped polluted water into a public storm water drain, prosecutors said.

“Here in Suffolk County, we will not tolerate the exploitation of workers or our taxpayers by greedy corporations and business owners,” Suffolk County District Attorney Timothy D. Sini said in a news release. “That is why my Office, along with our partners, is aggressively identifying and prosecuting bad actors in the business community and holding them accountable. Indeed, not only will our efforts protect workers and taxpayers, they will also prevent these bad businesses from gaining an unfair competitive advantage against legitimate, law-abiding businesses.” …

“The Governor and the Department of Labor take the responsibility of enforcing labor and worker protections very seriously,” Roberta Reardon, New York State Department of Labor commissioner, said. “We have zero tolerance for those businesses who seek to defraud the system. Businesses who don’t play by the rules will be held accountable. We are fortunate to have law enforcement partners like the Suffolk County DA’s office to help us reinforce those protections.”

The investigations are ongoing. Sini urges anyone who worked for one of the companies and was underpaid or deprived of his or her wages to contact the Labor Crime Unit at 631-853-4232 or via email to InfoDA@SuffolkCountyNY.gov.

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De Blasio legislation expands prevailing wage (NY)

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Stephon Johnson | 12/12/2019, 3:20 p.m.

New York City Mayor Bill de Blasio signed a bill that will expand guaranteed prevailing wages to building service workers.

“It is really a good example of doing something that will change and improve the lives of working people and at the same time allow us to keep building on the central goal of making this a city that working people can afford,” said de Blasio during a news conference for the bill’s signing. “And we are committed to our long term vision on affordable housing and appreciate how much our colleagues in labor and the unions involved here but also beyond have been supportive throughout of our larger goals on affordable housing.”

The Intro-1321 A legislation makes sure the prevailing wage for building service workers reflects and builds off of wage and benefits reforms aimed at reducing income inequality that include paid sick leave, fair work week and raising the minimum wage.

According to the city, since 2012, prevailing wages were required for building service employees in most developments where a private developer received at least $1 million in discretionary financial assistance from City Hall. But the law exempted affordable housing projects from the wage standard.

The sponsor of Intro. 1321-C, New York City Council Member Rafael Espinal, said that workers’ wages should coincide with the cost of living.

“As our city becomes a more expensive place to live, we have to push for laws that close its wealth gap,” stated Espinal. “The city is also facing a housing crisis that has to be addressed not just by looking at how much affordable housing is available, but by examining what kind of jobs are available as well.

“I introduced this prevailing wage law because it is the standard we set during the East New York Neighborhood Plan,” continued Espinal. “Of the 100% affordable housing that is being built, each building is now going to provide prevailing wages to its staff. If we did it in East New York, we can do it citywide.”

The bill covers additional developers and projects via removing the current exemption in the Prevailing Wage Law for affordable housing projects and not-for-profit developers of residential projects. Currently, building service employees in most residential projects that receive at least $1 million in financial assistance for new construction or preservation will be guaranteed the prevailing wage.

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Council OKs better pay for workers at subsidized developments (NY)

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WILL BREDDERMAN
November 14, 2019 03:39 PM

The business of affordable housing is about to get more expensive.

The City Council voted Thursday to obligate below-market housing developments that receive $1 million or more in city assistance pay prevailing wage to the staff members who maintain the structures and tend to tenant needs.

The bill’s passage marks a victory for building service workers union 32BJ SEIU and a defeat for the industry groups that argued the proposal would have a “crippling” effect on the construction of low-cost apartments.

Brooklyn Councilman Rafael Espinal’s legislation exempts affordable complexes where at least 50% of tenants are formerly homeless, disabled or receiving on-site social or health services, as well as smaller buildings and projects where the city has invested to preserve rather than construct below-market units.

Espinal insisted that his bill is a necessary component of keeping New Yorkers from being priced out of the five boroughs.

“This crisis has to be addressed not just by looking at how much affordable housing is available but also looking at what kind of jobs are available,” he said.

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Ironworkers, Welders Recoup $6M in Wages (NY)

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Some 500 ironworkers and welders will receive $6 million in wages and overtime pay improperly withheld by a Queens company. Matthew Chartrand, business manager for Ironworkers Local 361, said the settlement under which AGL Industries has begun paying the workers meant that ‘one of the bad players in the construction field is being brought to justice.’

By: RICHARD KHAVKINE / Aug 19, 2019

A Maspeth, Queens, steel-fabrication company copped to cheating hundreds workers out of overtime pay and wages, and agreed to pay out more than $6 million owed to welders and ironworkers, according to its plea deal with the state Department of Labor following a joint investigation with the Manhattan District Attorney’s office.

AGL Industries pleaded guilty to third-degree grand larceny and began paying 499 workers the money owed them with a $1.5-million allocation Aug. 13, Manhattan DA Cyrus Vance Jr.’s office said.

‘Bad Player’

The balance will be paid over five years in what is the largest single wage recovery in the DOL’s history.

The company also admitted to reporting fraudulent financial information and will settle through a $260,855 payment to the state’s Unemployment Insurance fund, the DA’s office said. A company official, Dominick Lofaso, also pleaded guilty to a class D felony for grand larceny.

Welders and ironworkers had complained to company officials about underpayment but were essentially told “tough,” according to the DA’s office. They then took their grievances to Ironworkers Local 361, in Ozone Park, and the DA’s office in February 2018. A subsequent joint investigation by the DA’s Construction Fraud Task Force and the DOL revealed that the company withheld overtime and other wages from workers during a roughly four-year period starting in November 2013.

Matthew Chartrand, business manager Local 361, hailed the settlement, saying “one of the bad players in the construction field is being brought to justice. Thanks to all-this is a great job for the benefit of workers!”

The DA’s office said the settlement represented a “monumental victory for construction workers,” adding that exploitation of construction workers is widespread despite that trade’s “treacherous” working conditions.

‘Landmark Conviction’

In the statement, DA Vance said the “landmark conviction” would restore “rightful earnings” to the ironworkers and welders. He said the Construction Fraud Task Force has returned about $7.4 million to workers since its creation.

“We are committed to fighting wage theft, which impacts employees across all industries, but is especially common in the construction industry,” he said the statement. He urged workers who believe they have been cheated out of earnings to contact the task force by text message at (646) 712-0298. Messages can be submitted anonymously.

The DOL last year paid about 35,000 workers nearly $35 million it had collected from companies that engaged in wage theft and public-works violations. The department has returned nearly $300 million in stolen wages to 280,000 workers since 2011.

“Wage theft and fraud have no place in New York, and unscrupulous companies who break the law will be held accountable,” Department of Labor Commissioner Roberta Reardon said in the statement from the DA’s office.

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Area DA’s pledge crackdown on wage theft, public works violations (NY)

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October 18, 2019

NEWBURGH – County district attorneys in the Hudson Valley, along with representatives from labor and construction associations, Thursday afternoon, explained the detriments associated with construction and wage fraud that has become a growing concern for public projects, subject to an RFP bidding process for which private contractors are eligible to apply.

In New York, as of 2018, $35.3 million were returned to 35,000 workers directly related to wage and workers compensation fraud.

Orange County District Attorney David Hoovler and Dutchess DA William Grady toured the construction underway at the Newburgh campus of Montefiore St. Luke’s Cornwall Hospital on Thursday.

Hoovler said his office has found a steady increase in the county over the last four years and he outlined a number of ways these different fraudulent practices appear that they have discovered.

“Prevailing Wage Fraud is where you don’t pay the proper wage; or, rather than paying the proper wage, you misclassify someone. Let’s just say a laborer is supposed to make $20 per hour, but a painter has to make $40 per hour. You have people painting; but, you classify them as a laborer. So, you should be paying them $40, but you’re saying you’re only paying them $20. That’s a form,” said Hoovler.

Worker’s Compensation, not having the proper Worker’s Compensation, or Worker’s Compensation at all. “It’s very dangerous if someone gets hurt on the job site. Other liability insurances, that contractors don’t carry, not having them; and then, finally, not paying the proper taxes,” he said.

Hoovler explained that these cases will use prosecution as a last resort. Their first priority is to get these contractors educated and then to get them compliant. A main incentive for these fraudulent behaviors is due to trying to rig the RFP process, where the lowest bidder must be taken. Wage fraud and lack of insurance allows these contractors to submit substantially lower bids.

When it comes to projects that are related to public health and safety, following appropriate practices is of the utmost importance because of the real danger shoddy construction, unqualified workers and lack of insurance could result in.

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Construction middlemen put workers in danger by cheating workers comp insurance providers: DA (NY)

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By SHAYNA JACOBS
NEW YORK DAILY NEWS
SEP 05, 2019 | 8:21 PM

A labor broker whose company pairs workers with construction gigs put endangered their employees by scamming workers compensation insurance companies in an “extensive fraud scheme,” Manhattan prosecutors said Thursday.

Labor broker Salvador Almonte, 38, and insurance broker Steven Asvazadourian, 40, denied the employees coverage partly by lying about the size of Almonte’s work force, Manhattan DA Cy Vance Jr.’s office said.

That drastically cut Almonte’s workers compensation insurance premiums, saving him millions of dollars.

But it also put the workers at risk of not being covered for on-the-job accidents or fatalities. More than a dozen of Almonte’s workers were injured and one died while he was playing games with their worker’s comp, Vance’s office said.

New York law requires nearly all employers to carry worker compensation insurance.

But not only did Almonte fail to buy the proper coverage – he declined to cooperate with the state board that decides workers’ claims, prosecutors say.

Almonte allegedly claimed to state officials his annual payroll for two carpenters and two cleaners was $70,000 per year. But in reality, he had dozens of employees, and his payroll for a typical two-week period was $110,000.

Almonte and Asvazadourian pleaded not guilty Thursday to charges including insurance fraud and scheme to defraud in Manhattan Supreme Court. They were released without bail.

Almonte is also under investigation by the IRS for failure to pay taxes.

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New York State Passes Bill Allowing Employees to Place a Lien on Employer’s Property for Accusation of Wage Violations (NY)

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Friday, July 26, 2019
The National Law Review

The New York State Assembly and Senate have passed a potentially groundbreaking act (S2844B/A486B) (the “Act”) that would allow current or former employees to obtain liens on their employer’s personal and real property based upon only the mere accusation of wage violations. And it arguably would allow those employees to obtain liens against individuals, including owners, managers and supervisors.

If the Act is signed by Governor Cuomo, New York would join the few states to permit such liens based on an unproven wage violation allegation.

A lien is a legal claim or a right against property. The Act, if passed, would give current and former employees priority in any bankruptcy proceeding involving the employer and, among other things, make it difficult for the employer to sell or transfer ownership of real estate.

The Act would apply to wage claims under both the federal Fair Labor Standards Act (“FLSA”) and the New York Labor Law. That would include claims relating to minimum wage, overtime, spread of hours, call-in pay, uniform maintenance pay, withheld tips, unlawful deductions from wages, or improperly taken meal and tip credits.

The Act defines employer as any person who is an “employer” under the FLSA or New York Labor Law. The definition of “employer” under these statutes is extremely broad – and includes not only the corporate entity that employs the employee, but also managers, executives, supervisors, owners, shareholders, and any other person or entity who exercises control over employees’ working conditions. Thus, this Act creates concerns for anyone who meets this broad definition of “employer.”

Importantly, under the Act, the employee would not have to prove that he or she was underpaid to file the lien. The lien could be filed on the basis of an allegation of underpayment.

If passed, the Act would also streamline the process by which employees could hold the ten largest shareholders of a non-publicly traded corporation, as well as the ten members with the largest ownership interests in a limited liability company personally liable for wage theft.

The Act also contains a provision which would allow employees and their agents to examine a business corporation and LLC’s records to obtain the shareholders’ or members’ names, addresses, and ownership value in the company. In addition, the Act provides that a lien can remain on a property for the duration of a wage lawsuit, which can exert undue pressure on an employer to settle an otherwise defensible, or perhaps even frivolous wage claim.

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Largest Single Wage Recovery in DOL’s 115-Year History (NY)

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Employer Pleads Guilty to Theft of Wages, Convicted of Grand Larceny,
AGL Industries Will Return Stolen Wages to 499 Workers

AUGUST 13, 2019
Albany, NY

Governor Andrew M. Cuomo today announced that a joint investigation between the New York State Department of Labor and the Manhattan District Attorney’s Construction Fraud Task Force has led to a plea agreement that will return approximately $6 million in stolen wages to about 500 welders and iron workers, the largest single wage recovery in DOL’s 115-year history. The investigation began following a referral by the Manhattan District Attorney and Iron Workers Local 361 in February 2018.

“We have absolutely zero tolerance for any business that exploits workers and robs employees of hard-earned wages – period,” Governor Cuomo said. “With this plea agreement we’re holding AGL Industries accountable for its fraudulent practices and returning millions in stolen wages to hundreds of welders and iron workers.”

The joint investigation revealed that from November 2013 until December 2017, AGL Industries – based in Maspeth, Queens County – cheated workers out of overtime pay and wages owed and reported fraudulent financial information to the state. When workers brought concerns about underpayment to the company, they were told that there was nothing they could do to receive their proper wages.

This monumental victory for construction workers-who face some of the most treacherous working conditions of any industry and widespread exploitation-is the latest high-profile takedown by the Task Force aiming to prosecute wage theft to the fullest extent of the law.
The structural steel fabrication company has admitted to 3rd Degree Grand Larceny and will pay back the money on a five-year plan, starting with a $1.5 million payment on August 13th. Company official Dominic Lofaso also pleaded guilty to a Class D felony for Grand Larceny.

In total, AGL will be responsible for $6.25 million in restitution, which in addition to wage restitution also includes $260,855 in contributions due to the state’s Unemployment Insurance fund.
…

Matthew Chartrand, Business Manager for the Ironworker’s Local 361 said, “It is our job as labor leaders to assist all workers when they are being wronged. Through the efforts of the Construction Fraud Task Force, as well as the great team at the Department of Labor, one of the bad players in the construction field is being brought to justice. Thanks to all – this is a great job for the benefit of workers!”

In 2018, the New York State Department of Labor collected nearly $35 million and returned that money to approximately 35,000 workers victimized by wage theft and public work violations. Since 2011, DOL has recovered nearly $300 million in stolen wages and returned it to more than 280,000 workers who were cheated by their employers.

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Easthampton City Council to consider wage theft ordinance (NY)

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By MICHAEL CONNORS
Staff Writer
Published: 7/26/2019 3:12:28 PM

Easthampton – The city is exploring new rules that would require construction employers who are either hired by the city or receive municipal tax relief to abide by a set of conditions in an effort to discourage wage theft.

The proposed amendment to the city ordinances is set for a public hearing in front of the City Council on Aug. 7. It requires any bidder, proposer, contractor or subcontractor receiving public funds or tax relief to sign an affidavit stating they will abide by wage laws, attempt to meet certain diversity requirements and submit detailed records of employee work to the city.

City Councilor Owen Zaret said the proposal comes at a time when the city is planning to fund multiple construction projects. He said having rules on the books to protect construction workers from theft was an important step going forward.

“I think it’s important to make a statement through … municipal projects in Easthampton that (workers) are classified, covered and paid appropriately,” Zaret said. “It’s about fairness for workers and workers’ rights.”

Too often, he said, contractors classify laborers as independent contractors instead of employees – allowing them to not have to pay employer taxes on workers or provide employment insurance such as workers’ compensation. There can also be instances of workers not being paid for the amount of hours worked, he said.

Though Zaret said he was not personally aware of any such activity happening in Easthampton, he believes the city should follow the example of other cities like Springfield, which passed a similar ordinance in 2018.

Under the proposal, contractors hired for work by the city must prove, on a weekly basis, that they have not been debarred or found to be in violation of labor laws in the past five years, provide accident insurance, classify workers as employees, pay fair wages and give employment preference to Easthampton residents.

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Cuomo signs bill making it illegal to threaten employees over immigration status (NY)

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by Peter Katz
July 29, 2019 1:07 a.m.

Gov. Andrew Cuomo over the weekend signed into law a bill that makes it illegal for an employer in New York state to retaliate against a worker by contacting federal immigration authorities or threatening to do so. The measure also extends the protection to threats or actions against an employee’s family or household members. The provision takes effect 19 days from the bill’s signing.

The idea for specifying that protections also cover threats regarding immigration status was proposed by the office of New York State Attorney General Letitia James and the legislation was sponsored by state Sen. Jessica Ramos of Queens and Assemblyman Marcos Crespo of the Bronx.

The new law adds language to existing labor law in order to specify that when the existing law says it’s illegal to “threaten, penalize, or in any other manner discriminate or retaliate against any employee” that includes contacting or threatening to contact a federal, state or local agency about an employee’s immigration or citizenship status or the status of a family or household member.

“There is no place for any form of harassment, intimidation, and abuse in the workplace,” James said. “It is incumbent on us to help vulnerable workers be able to stand up for their rights without fear of punishment.”

James’ office said it has received numerous credible reports of employers threatening immigrant workers with potential deportation for standing up for themselves. It also said immigrants are more likely to be victims of wage theft, sexual harassment and misclassification as independent contractors rather than employees entitled to benefits than are employees who are U.S. citizens.

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