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

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KENNETH LOVETT
NEW YORK DAILY NEWS
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

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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.

BERGEN CONTRACTER CHARGED WITH LARCENY FOR ALLEGED WAGE FRAUD

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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

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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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US LABOR DEPARTMENT RECOVERS $431K FOR WORKERS ON MANHATTAN’S FEDERALLY FUNDED PECK SLIP PROJECT

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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

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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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US LABOR DEPARTMENT RECOVERS $189K IN WAGES ON BEHALF OF 28 UNDERPAID WORKERS ON FEDERALLY FUNDED MANHATTAN CONSTRUCTION PROJECT

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SJ Insulation debarred from future government contracts following joint enforcement effort with New York Attorney General

WHD News Release: 05/25/2016
Release Number: 16-0804-NEW

NEW YORK – The U.S. Department of Labor has recovered $189,000 in unpaid wages and overtime for 28 carpenters and laborers who worked on the federally funded West 131st St. Cluster Project in Harlem between April 2009 and April 2010. This was the result of a joint enforcement effort with the office of New York Attorney General Eric Schneiderman in which the two agencies shared information and worked collaboratively on behalf of workers in New York. The attorney general’s investigation continues.

“Contractors on federally funded construction projects commit to paying their workers the required wages and fringe benefits when they bid these contracts. When, as in this case, they cheat their workers, they are also cheating the taxpayers who ultimately fund these jobs,” said Wage and Hour Division Regional Administrator Mark Watson, Jr. “As the resolution of this case demonstrates, we will not tolerate such illegal behavior.”

“We thank Attorney General Schneiderman and his staff for working jointly with us during the prosecution of this case. We have the mutual goals of ensuring that employees in our jurisdictions are paid and treated properly and employers who underpay their workers do not secure an unfair advantage over law-abiding employers,” said Jeffrey S. Rogoff, the department’s regional solicitor in New York.

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New York State recovers $10.2M in stolen wages, on pace for record year in recouping money owed to workers

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BY GLENN BLAIN
Thursday, May 5, 2016, 5:48 PM

ALBANY – State officials are on a record pace for recovering stolen wages, recouping $10.2 million for ripped off workers during the first three months of 2016, the Daily News has learned.

The Labor Department and other agencies returned the money to more than 17,000 workers who were not properly compensated by their employers, including 11,318 in the city, according to state figures.

“New York State has zero tolerance for employers who seek to cheat their employees of hard-earned wages,” Gov. Cuomo said.

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A.G. Schneiderman Announces Conviction Of Contractor Who Will Pay Nearly $800,000 To Workers For Wage Theft

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MAY 20, 2016
BY CHRISTOPHER BOYLE

(Long Island, NY) Attorney General Eric T. Schneiderman today announced that New Paltz-based construction company Lalo Drywall, Inc. and its owner Sergio Raymundo, 28, were sentenced in Manhattan Supreme Court after a conviction related to wage theft for underpaying workers at a mixed-use, commercial, and low-income residential project in Harlem.

Raymundo and Lalo Drywall, Inc. admitted to cheating eight workers at a Harlem housing project out of approximately $800,000 in wages during a 17-month period. The defendants attempted to conceal the underpayments by signing false checks drawn on the company’s account indicating that employees on the job were paid properly under the law. However, those checks were never actually given to the workers.

“Wage theft is a crime – one that frequently involves companies exploiting low and middle income workers for their own gain,” said Attorney General Schneiderman. “My office will continue to aggressively prosecute those who commit wage theft and ensure that workers received the compensation they have earned.”

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School Construction Authority General Contractor Sentenced To 96 Months In Prison For Long-Running Scheme To Deprive Workers Of The Prevailing Wage

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Department of Justice
U.S. Attorney’s Office
Eastern District of New York

Friday, April 1, 2016

Earlier today in Brooklyn federal court, Muzaffar Nadeem, the owner of SM&B Construction Co., Inc. (SM&B), was sentenced to 96 months’ imprisonment, ordered to pay more than $1.3 million in restitution to the IRS, and ordered to forfeit to the government over $7.1 million in criminal proceeds, following his convictions on May 8, 2015, after a four-week jury trial, for mail and wire fraud, structuring financial transactions, federal programs bribery, making illegal cash payments to a union official, money laundering, unlawful monetary transactions over $10,000, subscribing to false tax returns, and multiple related conspiracy charges.

The convictions arose out of Nadeem’s leadership role in a long-running scheme to pay SM&B’s workers a fraction of the prevailing wage on projects funded by the New York City School Construction Authority (SCA), as SM&B was legally and contractually required to do. Nadeem’s co-conspirators Zainul Syed, Afzaal Chaudry and Irfan Muzaffar were also convicted at trial of various crimes for their participation in this scheme. Muzaffar was previously sentenced to 18 months’ imprisonment, and Chaudry was previously sentenced time served, following approximately ten months of imprisonment. Syed is awaiting sentencing. The sentencing proceedings were held before U.S. District Judge Brian M. Cogan.

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