Council member pushes prevailing wages bill as a construction safety issue (NY)

Would apply to projects receiving city money and are 50K sf or hold more than 50 housing units

January 26, 2017 05:10PM
By Kathryn Brenzel

Alongside a package of controversial construction safety bills, a City Council committee is scheduled to consider a measure that seeks to require prevailing wages on certain construction projects in the city.

The bill, first introduced by Queens Council member Elizabeth Crowley in April 2015, has been re-referred to the Committee on Housing and Buildings, and is scheduled for a hearing on Tuesday that will largely focus on construction safety measures. The proposed bill would apply to projects that receive financial assistance from the city, are larger than 50,000 square feet or, if a residential project, more than 50 units, and that don’t have a project labor agreement.

While her revived bill – which has 20 listed sponsors – doesn’t explicitly involve construction safety, Crowley says the proposed legislation will at least indirectly encourage it.

“If you’re an employer, and you’re obliged to pay the prevailing wage, my guess is that you’d want to employ someone who is trained and qualified through a state program,” Crowley said. In New York City, that likely means hiring union labor. (Before joining the City Council, Crowley was a member of a painter’s union.)

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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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Laborers Make Recommendations for Reforming NYC Housing Preservation and Development

Recommendations Include Reforming HPD’s Procurement and Reporting Requirements To Combat Wage Theft And Worker Exploitation
Greater New York LECET
Oct 31, 2016, 10:35 ET

NEW YORK, Oct. 31, 2016 /PRNewswire-USNewswire/ — Before a New York City Council hearing today, the Mason Tenders District Council, Laborers International Union of North America (LIUNA), called for reforming the procurement and reporting requirements of the Department of Housing Preservation & Development. After years of mismanagement, flawed procurement processes and corruption, Greater New York Laborers-Employers’ Cooperation & Education Trust (GNYLECET), submitted a series of recommendations at today’s Committee on Housing and Buildings hearing on Intro 967, Speaker Melissa Mark-Viverito’s and Councilmember Helen Rosenthal’s legislation to reform HPD in relation to construction conditions in housing development projects.

“Intro 967 is a great first step towards reforming HPD and leveling the playing field in their procurement process,” said Pat Purcell, Executive Director of Greater New York Laborers-Employers Cooperation and Education Trust. “For too long the same unscrupulous contractors have been receiving a steady stream of work from HPD, while their indiscretions in regards to wage theft and safety violations have been largely overlooked. If amended to include recommendations like the ones we are advocating for at the Council today, Intro 967 has the potential to rectify a long-term problem at one of the City’s most critical agencies and ensure the gold-standard of construction is being upheld when HPD looks to award projects,” Purcell said.

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Hidden NY payroll card fees eliminated

Lindsey Riback, The Journal News
WGRZ 9:01 AM. EST September 09, 2016

ALBANY — Protections are now in place preventing low-wage workers from losing out on their money.

New York is requiring payroll-card companies to provide employees with access to at least one local fee-less ATM near their home or work, Gov. Andrew Cuomo announced Thursday.

In addition, account maintenance, overdraft and inactivity fees will be removed and employers will no longer receive financial benefits for paying their workers via a payroll card, Cuomo said.

Roughly 200,000 low-wage workers in New York are paid through payroll cards, which had contained withdrawal fees or charges for viewing account balances.

In many cases, the employees do not have a bank account and are required to pay ATM fees in order to withdraw their money, in addition to the initial card fees, Cuomo said.

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EXCLUSIVE: Attorney General’s office recovers nearly $5.7M in owed pay for New York low-wage workers

Monday, September 5, 2016, 4:00 AM

ALBANY – State Attorney General Eric Schneiderman’s office recovered nearly $5.7 million in owed pay and damages for more than 3,300 low-wage workers since last Labor Day, the Daily News has learned.

The recoveries are included in a third annual Labor Day report Schneiderman’s office is set to release Monday.

The recovered wages by Schneiderman’s Labor Bureau went to fast-food employees, home health aides, taxi drivers, restaurant employees and construction workers.

“As Attorney General, I remain steadfastly committed to ensuring that workers are paid for the work they do, that their pay lifts them out of poverty, and that undue obstacles aren’t placed in their path to job security and economic advancement,” Schneiderman said.

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World Trade Center contractor convicted in $1B minority-owned business fraud scheme

By Kim Slowey
August 12, 2016

Dive Brief:

  • A Manhattan federal jury has convicted Canadian contractor DCM Erectors and its owner Larry Davis for minority- and woman-owned business fraud during the execution of almost $1 billion of steel work at the Freedom Tower and World Trade Center Transportation Hub projects, according to Reuters.
  • Prosecutors alleged that DCM and Davis enlisted two minority firms to be administrative fronts on the projects while DCM, trying to avoid paying tens of millions of dollars to minority firms, did all the work itself.
  • Davis’ lawyer said the company and Davis will appeal the verdict and that the minority firms did the work they were supposed to do on the two projects. One of the contractors, however, testified that DCM and Davis paid him $2 million to do “basically nothing,” according to The Real Deal. Davis’ sentencing is expected in November.
Dive Insight:

When Davis was first arrested in 2014, he told prosecutors that he would plead guilty but changed his mind and said he did not intentionally break the law while under contract with the Port Authority of New York and New Jersey, according to Reuters. However, prosecutors claimed that Davis falsified records to make it appear that minority contractors were performing work.


By Dylan Skriloff on August 4, 2016

Rockland County District Attorney Thomas P. Zugibe today announced the filing of criminal charges against Christopher Greco (DOB 07/07/65) of 260 East Crescent Avenue, Mahwah, New Jersey for allegedly defrauding nine employees out of more than $82,000 by failing to pay the mandatory prevailing wages on several public works projects for the County of Rockland.

Greco is charged with:

* Six count of Grand Larceny in the Third Degree, class “D” Felonies
* One count of Grand Larceny in the Fourth Degree, a class “E” Felony
* 48 counts of Offering a False Instrument for Filing in the First Degree, class “E” Felonies
* One count of Petit Larceny, a class “A” Misdemeanor

District Attorney Zugibe said, “Firms doing business with the County of Rockland are obligated to pay their workers legally prevailing wages, which include salary and supplemental benefits. Cases like this demonstrate that we are vigilant in uncovering such criminal conduct and that unscrupulous contractors will get caught and have to pay the consequences for cheating workers out of their rightful wages.”

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NY contractor refuses to pay for safety ad campaign after manslaughter conviction

By Kim Slowey | July 14, 2016

Dive Brief:

  • A New York judge Wednesday ordered general contractor Harco Construction to pay for a safety ad campaign as part of its guilty sentence for an April 2015 trench-related worker death, but a Harco attorney said the company will not comply, according to The Wall Street Journal.
  • A Harco attorney said the court-ordered, televised and printed English-Spanish public safety announcement campaign is a violation of the company’s First Amendment rights and would be equivalent to an admission of guilt.
  • Harco, which said it plans to appeal, was convicted last month of second-degree manslaughter and criminally negligent homicide in the death of immigrant worker Carlos Moncayo, who was killed in a trench collapse on a Harco job site. If the company does not pay for the PSA campaign, it faces a maximum fine of $10,000.


Dive Insight:

The judge could have fined Harco $35,000 but instead chose the alternate sentence of the PSA campaign, DNAinfo reported. Harco attorney Ron Fischetti told the court that the company is innocent and that the blame for the accident should rest with Moncayo’s employer, Sky Materials Corp, which is set to go on trial as well for its part in the trench collapse.

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Litigation alleged prevailing wage, overtime violations

WHD News Release: 07/14/2016

Release Number: 16-1203-NEW

NEW YORK – Thirty-one workers employed on the federally funded cobblestone reconstruction project on Manhattan’s Peck Slip will receive $431,715 in back wages and interest following an investigation and litigation by the U.S. Department of Labor.

The department’s Wage and Hour Division found that the workers did not receive the proper prevailing wages and fringe benefits required under the Davis-Bacon and Related Acts and the Contract Work Hours and Safety Standards Act.

Sam Schwartz Engineering, a first-tier subcontractor under prime contractor MFM Contracting Corp. employed the workers. Investigators found that the employees who worked as flaggers on the project were incorrectly classified. The division alleged that – between August 2011 and January 2014 – they were paid $15 to $25 per hour instead of the prevailing wage rate of $44.49 per hour. The investigation also found workers did not receive all the overtime they were due under CWHSSA when they worked more than 40 hours in a week, did not receive holiday pay and that they were not paid on a weekly basis, as required.

The department’s Office of the Solicitor filed an administrative proceeding in 2015 against MFM Contracting and Sam Schwartz Engineering. The case is now being resolved with a consent findings and order approved by the department’s Office of Administrative Law Judges. Under the order, workers from the Peck Slip project will receive $431,715 in unpaid wages.

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New York Establishes a Super IC Misclassification-Plus Task Force

July 21 2016
Richard J. Reibstein

Yesterday, New York Governor Andrew Cuomo signed Executive Order No. 159 expanding the existing Joint Enforcement Task Force on Employee Misclassification into a Joint Enforcement Task Force on Worker Exploitation and Employee Misclassification. Those who follow IC misclassification developments in all 50 states, such as the publishers of this legal blog, were wondering why the annual Task Force Report issued by New York each February 1 for the past eight years had not yet been issued this year. Executive Order No. 159 tells us why – New York has now subsumed IC misclassification into a subset of “worker exploitation.”

Analysis of the New Executive Order

The Executive Order issued in 2007 establishing the Employee Misclassification Task Force required the Task Force to issue an annual report each February 1; this new Executive Order, however, has no such reporting requirement. Nonetheless, simultaneous with the issuance of Executive Order No. 159, the new and expanded Task Force issued its 2016 Report.

The Executive Order recites in its Preamble the reasons for the Governor’s action, and includes the statement that “an increasing number of employers in New York improperly classify individuals they hire as ‘independent contractors,’ even when those workers should be legally classified as ’employees’ . . . .” Neither the Executive Order nor the 2016 Task Force Report, though, provide any empirical data or basis on which the Executive Order based its conclusion that more and more employers in New York are either classifying workers as independent contractors or, more to the point, are misclassifying employees as ICs.

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