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Shady contractors jailed in Bay area and on Long Island (NY)

Posted by National Alliance for Fair Contracting on

June 20, 2019 – 11:47 AM CDT
BY MARK GRUENBERG

Minnesota isn’t the only state that’s cracking down on construction wage theft. New York is, too, and the feds did in Northern California.

The two cases from opposite ends of the country illustrate the prevalence of cut-rate contractors who routinely exploit their workers, especially immigrant workers, shorting them of pay and overtime, all to line the contractors’ own pockets and gain an edge over honest firms.

Their reward in these cases? Prison bars. In the California case, for a good long time.

In New York, contractor Vickram Mangru will serve a month in jail and three years of supervised probation for lowballing workers on Bronx school construction projects. His wife, Gayatri Mangru, drew a conditional discharge. Both have already repaid $80,000 in restitution for paying “far less than” prevailing wages to three workers from Dec. 22, 2012, to Valentine’s Day 2015 – and owe the workers another $201,630.09.

Both pled guilty earlier after a long investigation and charges from the state attorney general’s office, and were sentenced on June 11.

Mangru got a light sentence, compared to Job Torres Hernandez of Hayward, Calif. Torres faces sentencing this month of up to 20 years in prison and $500,000 in fines, the U.S. Attorney for Northern California said.

Of course, Torres did more than just steal the workers’ wages, a 10-day jury trial in federal court in March showed. He imported undocumented workers from Mexico, kept them toiling in virtual slave labor, and threatened those who complained with violent retaliation.

Torres set up several construction companies to handle business and disguise his doings. But he also hired a subcontractor for an apartment tower in San Jose. The sub got caught, too. It paid $250,000 in back pay to 22 workers – cracking the case. The whole mess also prompted the San Jose City Council to pass a stronger ordinance, in fines and jail terms, against wage theft.

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State can protect workers and honest business from wage theft (NY)

Posted by National Alliance for Fair Contracting on

June 07, 2019 07:00 AM
Richard Blum

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This is not an isolated problem but one that affects low-income workers throughout New York. Wage theft also undermines honest businesses that are forced to compete with rivals who cut corners and cheat their workers. The bad apples game the system to deprive our clients of their legal wages and businesses of an even playing field.

It is estimated that each year workers in New York are unlawfully underpaid by about $1 billion. These violations disproportionately affect female, black, Hispanic and immigrant workers and those with limited educations.

A proposal in the Legislature would correct this. The bill, Securing Wages Earned Against Theft, or SWEAT (A.486/S.2844), will provide workers with legal tools to ensure that their employers will pay them what a court orders. It will also help honest businesses compete.

The legislation would:

* Allow all workers to put a temporary lien on the property of an employer that fails to pay wages, similar to the liens that protect workers in Wisconsin and Maryland.

* Make it easier for workers to attach an employer’s assets at the start of litigation before the property can be sold or transferred, using the standard currently employed in other states, including Connecticut.

* Improve the procedures for holding the largest shareholders of privately held corporations and members of limited liability companies personally liable for wage theft. Current law allows for them to be held accountable, but only if workers employ obscure, difficult procedures.

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New York Legislature Passes Bill Allowing Employees to Place a Lien on Employer’s Property for Wage Claims (NY)

Posted by National Alliance for Fair Contracting on

The National Law Review
Monday, July 1, 2019

The New York Senate and Assembly recently passed Senate Bill S2844B to strengthen current laws for employees who are victim of wage theft to secure and collect unpaid wages for work already performed from their employers. This bill would amend five sections of the law (Lien Law; Labor Law; Attachment under the Civil Practice Law and Rules; the Business Corporations Law; and the Limited Liability Law). If signed by the Governor, this bill would create a broad right for any employee to obtain a lien on an employer’s property based on the allegation of a wage claim and would significantly increase employee power in such disputes.

This bill would expand on current lien remedies and create an “employee lien,” that would allow an employee who has a wage claim to place a lien on his or her employer’s interest in property (real or personal property) for the value of that employee’s wage claim, plus liquidated damages. “Wage claim” is defined as any claim constituting a violation of New York Labor Law § 170 (overtime), § 193 (improper deductions), § 196-d (gratuities) , or § 652 and § 673 (minimum wage). Wage claims also include claims for breach of employment contract where wages are not payed under the contract, and Federal minimum wage claims pursuant to 29 U.S.C. § 206 and § 207. The employee’s lien cannot be placed on an employer’s deposit accounts or goods.

Notice of the lien must be filed within three years of the end of employment which gave rise to the wage claim. Real property notice must be filed in the clerk’s office of the county where the property is located. Personal property notice must be filed with a financing statement pursuant to section 9-501 of the Uniform Commercial Code. Employee’s liens may be filed by the employee or the New York State Department of Labor and the New York Attorney General for wage claims that are subject of their investigations, court actions or administrative agency actions. Notice of an employee’s lien must be served upon the employer within five days before or 30 days after filing notice. The lien is valid for one year unless extension is filed with the county clerk. If no action is commenced during the extension period, the lien will be automatically extinguished unless extended by a court order.

(Read More)

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Valley Stream contractor gets 30 days for wage theft (NY)

Posted by National Alliance for Fair Contracting on

Posted June 11, 2019
LIHERALD.COM

Valley Stream contractor Vickram Mangru and his wife Gayatri of AVM Construction Corp. were sentenced on June 10 for their roles in failing to pay more than $280,000 in wages to laborers working on a publicly funded construction project in New York City, according to a news release from the New York attorney general.

Vickram was ordered to serve 30 days in jail, followed by three years of probation by Bronx County Supreme Court Justice James McCarty for a felony charge of failure to pay prevailing wages and benefits. Gayatari was sentenced to a conditional discharge as result of misdemeanor conviction on the same charge.

Both had pleaded guilty on Feb. 11, and have paid $80,000 in restitution to three workers. The couple still owes a remaining $202,000, and are barred from bidding on or being awarded a public works contract in New York for five years.

“New Yorkers who work on publicly-funded projects deserve to be paid a prevailing wage,” New York Attorney General Letitia James said in a statement. “Employers who underpay their employees, and attempt to evade wage laws have no business in the state of New York. My office will continue to ensure that all New Yorkers – no matter their trade – are paid a fair wage.”

Between December 2012 and February 2015, Vickram, owner of Vick Construction and operator of AVM Construction Corp. had reportedly failed to pay several of his employees prevailing wages, as required by state law, for construction projects and repair work at a number of public schools in the Bronx.

Vickram had reportedly paid his workers $120 and $160 a day for 40 to 50-hour work weeks, which falls far below the prevailing wage schedules set for publicly funded projects of that nature, the release read. To hide the underpayments, he falsified certified payroll records and reports submitted to the New York City Department of Education to make it look as if he were following the required prevailing wage schedules.

The city comptroller had initially barred the couple from being awarded public contracts after discovering the under payments, but referred the case to state prosecutors when it was found that they had created a new company in an attempt to continue operating in the city.

State prosecutors picked up the case after the city comptroller had barred the couple from being awarded public contracts, and then found that they had created another company to continue doing business, and was allegedly still committing labor violations.

(See Article)

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Westchester County Wage Theft Trial Makes History (NY)

Posted by National Alliance for Fair Contracting on

By Teresa Santiago and Alice Kenny
Posted on May 15, 2019

First Case to Appear in Federal Court Wins Maximum Amount

In a history-making event, justice finally came to three day laborers whose wages had been stolen by their employer, thanks to significant intervention by Catholic Charities NY. A jury determined last Thursday, May 9, 2019, that TDL Restoration Inc. and its relating contractor company, TDL Management Corp., stiffed three of its employees for thousands of hours worked. The contractor did not pay the men regular wages nor overtime and when it issued paychecks they often bounced. Not only did the jury find in favor of the plaintiffs, … on all questions, but they are expected to be awarded the maximum damages permissible, close to $300,000, for violations of Federal and State labor laws.

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Unfortunately, these three day laborers’ plight is not unusual

Unscrupulous contractors often stiff this group of men they consider not only vulnerable but powerless. Day laborers, typically immigrants, wait on corners under scorching sun and bitter cold hoping a contractor will offer them a job.

When left unpaid, they often feel powerless because of poverty and often lacking of legal status, to fight back.

Not this time

A team of organizations including Catholic Charities NY stood up to win this impressive victory for these otherwise defenseless men. Organizations included the Workers Justice legal team as well as National Day Laborer Organizing Network organizations. Counted among these organizations are Catholic Charities Obreros Unidos of Yonkers, Community Resource Center, United Community Center, Don Bosco Workers and Neighbors Link.

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“Wage theft by TDL Restoration not only hurts the individual workers who should have been paid more under federal and state law,” said Catholic Charites Community Services Westchester Regional Director Esmeralda Hoscoy, “but also the businesses of law-abiding contractors whose bids on contracts are hired to reflect their higher labor cost.

(Read More)

Public-works projects must pay prevailing wages (NY)

Posted by National Alliance for Fair Contracting on

OP-ED By John R. Durso
Posted May 23, 2019

Few public policies do more to build strong communities across our region than New York’s prevailing-wage law for public-works projects. It is a job-creating economic engine that puts members of our local communities to work and creates local wealth, revenue and investment. However, this useful public law has been undermined because the definition of public works has been blurred by the amalgamation of public and private financing. A bill passed in the State Assembly and awaiting action by the Senate would require that all Industrial Development Agency-funded projects pay prevailing wages, and would help to ensure that our tax dollars are creating careers with fair wages and benefits for Long Islanders who want to build lives here.

Gov. Andrew Cuomo offered a proposal in his Executive Budget to restore the application of prevailing wages to projects receiving public dollars. New York state was on the verge of restoring these protections as originally outlined by statute in 1897, and enshrined in the state Constitution in 1938, but unfortunately, this policy priority fell off the table.

Opponents of restoring prevailing-wage protections assume that higher construction wages directly correlate to higher project costs. This just isn’t true. The best-case scenario is they are drawing this conclusion based on flawed studies, and at worst they are deliberately misleading communities and elected officials to frame the public discourse for their own profit.

According to a state-funded study by Professor Fred B. Kotler of Cornell University, that conclusion is “simplistic and inaccurate.” It fails to account for the fact that labor costs are a small percentage of total project costs, and ignores the fact that higher-paid workers are often higher-skilled workers who find efficiencies and make fewer errors, resulting in fewer expensive change orders. “Construction workers’ wages should be factored into the overall value of the state’s investment in economic development projects,” Kotler wrote. “The prevailing wage law is itself an economic stimulus and can reasonably be considered as part of a broader economic development strategy for the state.”

According to the Economic Policy Institute, for every $1 spent under prevailing-rate laws, $1.50 is generated for our local economies. When workers earn more, they are able to spend more. Wage protections promote a more localized workforce, ensuring that Long Island residents benefit from our economic development investments. It is clear that holding public construction projects to prevailing rate standards brings wealth into communities. This, in turn, creates the virtuous cycle of local consumption and revenue for public services.

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John R. Durso is president of the Long Island Federation of Labor, representing 250,000 members of 160 AFL-CIO local unions, and president of Local 338 RWDSU/UFCW, which represents 15,000 working men and women in the retail and health care industries.

(Read More)

Nassau legislators unanimously back Albany prevailing wage effort (NY)

Posted by National Alliance for Fair Contracting on

In a bipartisan move, the county’s lawmakers endorse efforts to pay union wages and benefits to construction workers on building projects that receive tax breaks.

By James T. Madore
Updated May 24, 2019 7:45 PM

The Nassau County Legislature has unanimously backed a move in Albany to pay union wages and benefits to construction workers on building projects that receive tax breaks.

The endorsement comes as supporters and opponents of the higher rate, known as the prevailing wage, attempt to reach a compromise before the State Legislature ends its regular session on June 19.

The endorsement also is a rare show of bipartisanship in Mineola and provides a boost to unions that say real estate developers should be compelled to pay the prevailing wage on projects that win taxpayer aid from state or local governments.

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The prevailing wage bill “will ensure that the taxpayer-funded subsidies we are using to spur development also create strong, middle-class jobs for Long Island construction workers,” the Nassau lawmakers said in a May 8 letter to state Senate Majority Leader Andrea Stewart-Cousins (D-Yonkers).

“It’s no secret that Long Island is an expensive place to live, and in Nassau County, the wages this legislation will codify give construction workers a quality of life they wouldn’t otherwise have,” states the letter signed by Presiding Officer Richard J. Nicolello (R-New Hyde Park), Minority Leader Kevan Abrahams (D-Freeport) and 17 other county lawmakers.

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Under current state law the prevailing wage must be paid to all workers, union and nonunion, on government-funded public-works projects such as roads, mass transit and schools. But that wage rate is not required for those employed on private construction projects aided by industrial development agencies or the state.

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Parr: Prevailing wage bill will stop money from leaving New York (NY)

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By Ron Parr
April 15, 2019

New York faces a statewide problem related to public works. Despite what some may say, if this issue is left unresolved it could have disastrous implications for business, hurting both contractors and workers in New York State.

The lack of a clear definition of public works has created a loophole that can be exploited by bad actors to take millions in public subsidies, turn around and hire out of state contractors and pay workers poverty-level wages. The consequences for New York are vast. Tax dollars meant to invest in local companies and spur economic development are funneling into the back pockets of unscrupulous developers and millions in foregone tax revenue continues to accrue.

Legislation in both houses of the state Legislature in Albany would provide the statewide solution New York needs – from Western New York to New York City, from the North Country to Long Island.

Opponents claim public works legislation would increase the cost of construction and impede economic growth, but when you look at the numbers, this is far off the mark. Far from slowing economic growth, public works legislation would significantly boost the economy both upstate and down, first and foremost: through tax revenue.

Mandating wage standards and taxpayer benefits on projects that received public funding would produce an additional $3.5-6.9 million annual sales tax revenue. At present, local contractors lose out in the bidding process to out-of-state contractors that pay poverty-level wages to gain a competitive advantage. Leveling the playing field so that in-state contractors can compete would ensure these tax dollars stay in New York.

Additionally, the payment of prevailing wages often encourages a more skilled, localized workforce. Skilled workers minimize costs by increasing efficiency and decreasing the amount of time needed to complete a project. A clear definition of public works has the potential to actually reduce overall project costs.

Furthermore, public works legislation would strengthen industries outside of construction including insurance, financial services, health care and the restaurant industry, the combination of which would add billions in revenue and produce thousands of jobs.

(Read More)

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Prevailing-wage bill would uplift construction workers of color (NY)

Posted by National Alliance for Fair Contracting on

April 30, 2019 12:00 AM
Barrie Smith

All construction workers in New York-union or nonunion, male or female, black or white-deserve the right to a fair wage for their hard work.

That’s why all New York construction workers critically need prevailing wage legislation. A loophole in the current definition of public works allows bad-actor contractors to receive millions in taxpayer subsidies for projects while paying workers poverty-level wages.

Despite the universal applicability of this legislation to construction workers, a misinformed narrative that prevailing-wage legislation would negatively impact people of color by favoring union labor somehow persists-often perpetuated by white, nonunion workers. This argument shows a fundamental misunderstanding of how to best serve the interest of people of color, a complete lack of knowledge regarding the increasingly positive role of the building trades in the effort for civil rights in New York, and, frankly, a rudimentary understanding of the bill itself.

Lack of diversity in the building trades is a thing of the past. The social justice community accepts this as fact. The truth is that today, people of color benefit from greater opportunity for higher wages and benefits, a lower racial wage gap and less wage discrimination than in nonunion construction.

The numbers clearly back this up. A 2017 report by the Economic Policy Institute, Diversity in the New York City Union and Nonunion Construction Sectors, showed that more than half of unionized construction workers are people of color. Black workers in particular have a 5% higher share of employment than in the nonunion sector.

And not only are there more jobs for people of color in unions, but the jobs are better. Black workers earn 36.1% more per hour than those in the nonunion sector. Hispanic workers earn $8 more per hour.

(Read More)

Prevailing wage law passed after Alabama workers built Northport VA

Posted by National Alliance for Fair Contracting on

By James T. Madore
Updated May 3, 2019 6:00 AM

The Northport VA Medical Center gave rise to the federal law stipulating that the prevailing wage be paid on federal building projects, according to historians and federal records.

The use of an out-of-state contractor and workers to construct the local hospital in the 1920s led Rep. Robert L. Bacon (R-Westbury) to propose what became the Davis-Bacon Act of 1931. The act is still in force, though it has been amended through the years. The hospital was in Bacon’s district.

Speaking at a 1927 congressional hearing, Bacon said several New York State contractors were outbid for the hospital’s construction because they included the state’s prevailing wage in their bids, which the successful bidder, from Alabama, had not done.

The out-of-state contractor “brought some thousand nonunion laborers from Alabama,” Bacon said. “They were herded onto this job, they were housed in shacks, they were paid a very low wage.”

He continued: “It seemed to me that the federal government should not engage in construction work in any state and undermine the labor conditions and the labor wages paid in that state. …The least the federal government can do is comply with the local standards of wages.”

Bacon’s bill languished until it was sponsored in the Senate by John Davis (R-Pennsylvania), a former labor secretary under three presidents, including Herbert Hoover. The bill was signed into law by Hoover in 1931.

More recently, opponents of the prevailing wage, such as columnist George F. Will, have asserted Bacon was upset because some of the workers on the Northport hospital’s construction were black. But neither he nor Davis spoke of race in the period leading up to the legislation’s overwhelming adoption, according to congressional records.

“For Bacon, the issue was not race,” economists Hamid Azari-Rad and Peter Philips said in “The Economics of Prevailing Wage Laws” (Ashgate, 2005). “The issue was that both black and white workers from Alabama were being paid very much less than the wage scale prevailing in New York.”

The original hospital buildings are no longer in use and will be demolished next year, a VA spokesman said.

(See Article)