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DOL Recovers $6M in Unpaid Construction Wages

Wednesday, August 21, 2019

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In a press release issued by the office of New York Gov. Andrew M. Cuomo, a joint investigation between the New York State Department of Labor and the Manhattan District Attorney’s Construction Fraud Task Force uncovered approximately $6 million in stolen wages.

The discovery is reported to be the largest single wage recovery in the DOL’s 115-year history.

The Case

When Local 361 Union Ironworkers first realized that approximately 500 welders and iron workers had failed to be paid proper overtime compensation and wages owed from former steel fabricating employer AGL Industries (Maspeth, New York), the union went directly to AGL. As a response to the lack of wages paid, AGL reportedly told Local 361 that nothing could be done about the matter.

Matthew Chartrand, Business Manager for the Ironworker's Local 361, said, "It is our job as labor leaders to assist all workers when they are being wronged.”

Displeased with AGL’s response, union workers chose to report the incident to state officials, where a joint investigation was launched by the NYSDOL and Manhattan District Attorney's Construction Fraud Task Force in February 2018.

According to the investigation’s findings, $6 million in wages was illegally withheld from various Local 361 iron workers and welders dating from November 2013 to December 2017. The investigation also uncovered that AGL had reported fraudulent financial information to the state.

What’s Happening Now

In conclusion of the investigation, AGL Industries has admitted to third-degree grand larceny and company official Dominic Lofaso also pleaded guilty to a Class D felony for grand larceny.

"Wage theft and fraud have no place in New York, and unscrupulous companies who break the law will be held accountable. I thank our diligent investigators and Manhattan prosecutors, as well as the heads-up from Local 361 that helped expose these crooks and bring them to justice,” said Department of Labor Commissioner Roberta Reardon.

Having already made a $1.5 million payment on Aug. 13, the company has entered into a five-year plan where it will continue to gradually pay off $6.25 million in restitution. In addition to wage restitution, AGL’s payments also includes $260,855 in contributions to the state’s Unemployment Insurance fund.

Manhattan District Attorney Cyrus Vance added: "This landmark conviction will restore nearly $6 million to workers who were cheated out of their rightful earnings. Hundreds of iron workers and welders will now see their wages restored, thanks to my Office's Construction Fraud Task Force—which has restored approximately $7.4 million to workers since its creation—and the New York State Department of Labor.

“We are committed to fighting wage theft, which impacts employees across all industries, but is especially common in the construction industry. I urge anyone whose earnings are being stolen to contact our Task Force through WhatsApp at 646-712-0298, where you can submit tips anonymously."

Recent Wage Protection Laws

In an attempt to prevent wage theft from occurring, many states have been introducing new wage protection laws into their legislative parties, with many being passed into law.

Starting in 2018, states such as Maryland, Oregon and California began to set the bar for protecting construction workers’ wages. By April 2019, Illinois joined the movement, holding general contractors responsible for their subcontractors’ unpaid wages to employees.

In May, Colorado Gov. Jared Polis signed The Human Right to Work With Dignity Act (HB-1267) into law, which officially made wage theft over $2,000 a felony theft in the state.

The following month, Nevada Gov. Steve Sisolak signed two wage bills into law: Assembly Bill 136, which lowers the prevailing wage threshold amount for public projects from $250,000 to $100,000 and restores the prevailing wage for workers on those projects to 100%, vs. the current 90%; and Senate Bill 231, which removes language that prohibits contractors and subcontractors from entering into an agreement with a labor organization while they’re working on public projects (and also eliminating language that discourages public entities from hiring union contractors).

Most recently, Maryland passed legislation that holds general contractors accountable for wages unpaid by subcontractors. Although the law is similar to Maryland’s General Contractor Liability for Unpaid Wages Act, which was passed last spring and takes effect Oct. 1, the new law provides general contractors with a right of indemnity, which can be enforced through contracts.

   

Tagged categories: Construction; Department of Labor; Finance; Good Technical Practice; Government; Laws and litigation; Lawsuits; NA; North America; PaintSquare App - Commercial; Unions; Workers

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