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.