AG investigation convicts Queens construction companies of ripping off employees

Posted by National Alliance for Fair Contracting on

By Mark Hallum
FEBRUARY 20, 2018

State Attorney General Eric Schneiderman announced the conviction of three Queens construction companies after they pleaded guilty to misclassifying employees as independent contractors to avoid paying overtime.

Lotus-C Corporation of Jackson Heights, Johnco Contracting Inc. of Bayside, and RCM Painting Inc. of Maspeth were all convicted of felony counts of grand larceny and falsifying business records in Queens Supreme Court on Feb. 7 and will pay over $730,000 in restitution for missed wages and unpaid taxes.

“Led by pure greed, the defendants in this case attempted to sidestep the law – misclassifying their employees as a way to stiff them on the overtime pay they rightfully earned,” Schneiderman said. “My office will continue to crack down on those who seek to steal from their workers in order to line their own pockets.”

The investigation by the attorney general’s office revealed the defendant corporations failed to properly pay employees – usually carpenters and painters – for overtime by falsely filing them as independent contractors. Over 150 workers were affected and did not receive the time and half pay for working over 40 hours a week required by law.

…

As part of the plea deal, the three corporations will be dissolved and Cesar Agudelo of Lotus-C and John Massino of RCM Painting and Johnco will be barred from bidding on public works contracts for up to five years.

About $371,000 will go to the workers as restitution while another $360,000 from the defendants will go to unpaid unemployment insurance contributions.

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Hail the Prevailing Wage!

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A prevailing wage has come under attack from advocates looking for something cheaper. And it’s shameful!

BY GARY LABARBERA
MARCH 8, 2018 1:54 PM

This is New York. We don’t do “race to the bottom” here.

We don’t invite in bottom-fishers and corner-cutters to build our buildings. And we don’t scapegoat workers.

That’s because we need the best. So we build the best.

As a Commercial Observer reader, the same goes for you, too.

You don’t “race to the bottom” when it comes to staffing up your brokerage, your development company, or your investment firm.

Yet in the world of public-sector construction, prevailing wage laws have again come under attack from advocates of bottom fishing.

But prevailing wage laws are not just good for construction workers and the agencies undertaking public projects. These laws are also good for all New Yorkers.
For more than a century, New York State has maintained an important and progressive social compact: fair wages for fair work. The pay of workers engaged in public projects must align with local prevailing wage and benefit levels. Hard-working New Yorkers thus have access to good-paying jobs and proper protection from unsafe working conditions.
And with the State’s FY 2018 capital budget exceeding $14 billion, it’s critical to shake off faulty assumptions-and recognize that prevailing wage requirements also save taxpayers money.

New data now show how these rules ensure effective cost management on public projects.

…

Gary LaBarbera is the president of the Building & Construction Trades Council of Greater New York.

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New York State Reciprocal Debarment Legislation Signed into Law by Governor Cuomo

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PRESS RELEASE GlobeNewswire
Dec. 22, 2017, 02:09 PM

On December 18, New York Governor Andrew Cuomo signed into law new reciprocal debarment legislation to amend labor and general municipal law, as it relates to reciprocity of debarments imposed under the federal Davis-Bacon Act. The bill states that any contractor debarred by the U.S. Department of Labor for violations of the Davis-Bacon Act cannot work on New York State public works projects. The statute will take effect in March 2018.

“This is an important new State law that ensures that contractors barred on the federal level from public works projects won’t have the ability to win new projects in the State of New York,” said John Ballantyne, NRCC’s Executive Secretary-Treasurer. “We’re pleased to support a law that ensures that hardworking men and women carpenters receive good pay and benefits from reputable, law-abiding companies in the State.”

…

“Unscrupulous contractors that violate workers’ rights don’t deserve to be rewarded with contracts paid for by hardworking taxpayers,” said Assemblymember Harry Bronson. “This law is a step in the right direction to help ensure that workers are protected from dishonest employers and our communities’ projects are completed by upstanding businesses that pay and treat their employees properly. Federal law, under the Davis-Bacon Act, dictates that contractors are prohibited from obtaining federal contracts if they’ve been debarred by the U.S. Department of Labor for wage payment violations. My legislation corrects a loophole in New York State law that allowed federally debarred contractors to still obtain state public works contracts. As a member of the Assembly Committee on Labor, I will continue to be an outspoken advocate for workers’ rights and continue to stand up for fair wages and vital protections.”

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DA cracking down on wage theft by construction contractors (NY)

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By Priscilla DeGregory and Emily Saul
December 4, 2017 | 4:36pm

The city’s five district attorneys have agreed to crack down on wage theft by construction contractors – after an investigation revealed that more than $1.2 million in wages had been illegally withheld from workers.

The state Department of Labor has uncovered some 400 cases since it began looking into wage theft earlier this year. Nearly $700,000 has been returned so far, authorities said, and the investigation is ongoing.

“Every week, New Yorkers lose $20 million in unpaid wages. And every day, construction workers who risk their lives doing dangerous jobs have to wonder whether they’ll actually be paid for their work,” Manhattan DA Cy Vance said Monday.

Wage theft is one of the most pervasive problems in New York City and State, and in the construction industry in particular, workers are all too often preyed upon by their employers, who are able to steal millions of dollars in unpaid wages.

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Stiffed electricians get watt they deserve as sleazeball boss forks over $750G (NY)

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BY ANDREW KESHNER
NEW YORK DAILY NEWS
Wednesday, December 20, 2017, 2:37 AM

Five electricians got an early Christmas gift Tuesday in a check for more than $750,000.

The windfall was way overdue for the hard-working men who were stiffed out wages by a crooked boss.

Now that their greedy superior, Michael Riglietti, has a grand larceny conviction on his head, he’s finally opening his wallet to fully pay the men.

Acting Brooklyn District Attorney Eric Gonzalez and city Department of Investigation Commissioner Mark Peters presented the five checks.

The funds were the money the men deserved for their time on various public works jobs, including many schools. Though they were supposed to be compensated prevailing hourly wages around $50, they were getting a fraction of that – between $13.50 and $25 an hour.

“I am so happy to be able to hand you these checks, which were hard-earned and well-deserved and really will help make your holidays brighter,” Gonzalez said.

Riglietti, 50, pleaded guilty last month to grand larceny and his company, MSR Electrical Construction Company, once in Red Hook, copped to violating labor laws on prevailing wage requirements.

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New York Officials Battle Wage Theft in Construction Industry (NY)

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By LUIS FERRÉ-SADURNÍ
DEC. 6, 2017

For months, Ariel Ortega’s paychecks would bounce when he went to deposit them at his bank each Friday. He says he never saw the promised overtime pay for his extra hours on Saturdays remodeling a 12-floor apartment building in Brooklyn.

Mr. Ortega considered quitting. But when he voiced concerns, his boss, Michael Stathakis, would grow agitated and threaten not to pay the remainder of what he was owed if he quit, Mr. Ortega said.

“It was December, and it was cold, so it would be hard to get another construction job,” Mr. Ortega, who is owed hundreds of dollars in wages and overtime pay, said in Spanish. “I had to stick through it.”

Mr. Ortega, 30, was vindicated last week when his employer, Whisk Remodeling Corp., owned by Mr. Stathakis, pleaded guilty to fraud, admitting he failed to pay Mr. Ortega and dozens of other workers, many of them immigrants, more than $90,000 in wages.

Mr. Ortega’s case is not unique – and prosecutors in New York have taken note.

District attorneys in all five boroughs of New York City and in other counties, in coordination with state agencies, have ratcheted up efforts against wage theft in the construction industry. A string of indictments this year detailed more than $2.5 million in unpaid wages for more than 400 construction workers in Manhattan and beyond, Cyrus R. Vance Jr., the Manhattan district attorney, said at a news conference on Monday.

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‘Hire local’ executive order signed for construction projects (NY)

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By NICK LIPPA
Sept. 28, 2017

Local officials and business owners came together for the signing of a new executive order that focuses on hiring local labor for large construction projects in Erie County.

The First Source Policy, signed by Erie County Executive Mark Poloncarz Wednesday, requires construction projects in Erie County over $250,000 and involving at least three workers to employ qualified local residents, with a focus on hiring individuals from high-poverty areas. That includes 16 zip codes residing in Buffalo, Cheektowaga and Lackawanna, to name a few.

Buffalo NAACP President Rev. Mark Blue said this order will set a benchmark for other areas to follow.

“Getting a chance to move out of poverty, to get them into jobs that they’re skilled at and, hopefully, with the training that’s being done by the city and their Northland Project, bring them skills to where they’re employable not just for one job, but for many jobs,” Blue said.

He said the policy will help urban as well as rural residents.

“It’s equally distributing, let me say, wealth to areas that have received, wealth into areas that have been economically disadvantaged for years,” Blue said. “And also it brings hope to those who have not had an opportunity to be employed or even underemployed.”

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NYC establishes safety training requirements for construction workers

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October 4, 2017

New York – The New York City Council, after eight months of bill editing, on Sept. 27 unanimously approved legislation establishing construction safety training requirements and programming.

The bill was introduced in January in response to the high number of construction site deaths in the city – at press time, 40 since 2014, according to a New York Times report. The legislation was changed twice to satisfy stakeholders – including the city’s real estate board, independent contractors and immigration officials – who were worried that day laborers would not be able to afford the training. The bill was revised to include $5 million to help fund their training.

Fines of up to $25,000 will be levied on sites using untrained workers, and workers can keep working until December 2018 if they have at least 10 hours of training completed by March. Permits for work can be withheld or denied renewal if the employer cannot prove all workers on a project have the required training.

Also included in the legislation, which went into effect immediately:
  • Workers must complete between 40 to 55 hours of safety training. The Department of Buildings will control the administration of the hours.
  • Workers can satisfy their training requirement with completion of an alternative training program, but only if DOB allows it after comparing it to the bill’s established training program

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Union workers win $76M from Midtown construction firm that used alter-ego company to skirt collective bargaining (NY)

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Ginger Adams Otis
NEW YORK DAILY NEWS
Thursday, September 21, 2017, 2:41 PM

A Midtown construction company accused of creating a bogus business to avoid union wages and union benefit payments has to cough up $76 million to the workers it cheated.
In a decision with potentially far-reaching consequences for city developers, Manhattan Federal Court Judge Colleen McMahon found that Navillus Tile fraudulently invented an alter-ego company to try and get around collectively bargained agreements it had with several major city construction unions.

The company also had one of its legitimate offshoot businesses act as a Navillus stand-in on a job it wanted to do non-union, the ruling found.

The collusion also involved real estate giant Related, one of the city’s most prolific developers.

It knowingly engaged with one of the alter-ego companies on its Upper East Side luxury development on 92nd St., Judge McMahon’s ruling said.

In her scathing, 95-page ruling delivered late Thursday after a three-year court battle, McMahon said that Navillus’ founder, Donal O’Sullivan had “perjured himself” more than once and noted that another company principal was “obviously lying” in some testimony.

…

The $76 million in back wages and contributions to health, pension and general welfare funds will be split between the Metal Lathers Local 46, Cement and Concrete Workers District Council, Cement Masons Local 780, the District Council of Carpenters and Teamsters Local 282.

They came together in 2014 to launch the complicated lawsuit against Navillus Tile, which had signed collective-bargaining agreements with all of them for a variety of jobs on construction sites.

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Marino Introduces New Jobs Law (NY)

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By Jim Rondenelli August 15, 2017 12:17 PM

Joined by local union leaders and workers at City Hall, Utica Councilman Joe Marino introduced legislation he says will bring good paying jobs to Utica and skilled craftsmanship to City projects.

Marino says the new law would require contractors that win a bid in the City of Utica over $250,000 to have an apprenticeship program built into their company.

He says the jobs law would help put families back to work. Marino says under the apprenticeship program, they’ll get to earn while they learn and become skilled labor under the tutelage of skilled craftsmen.

Marino says there are about 750 certified apprenticeship contractors throughout the state.
Representatives from LIUNA Local 35, Plumber And Pipefitter Local 112 and IBEW Local 43 attended today’s announcement.

(See Article)