A.G.: Contractor to Pay $1M Back Wages

The Attorney General’s agreement requires Procida to pay back wages totaling $830,000 based on violations by the corporation’s subcontractor, which paid below the mandated prevailing wage rate at a project in Brownsville. The company will also pay $100,000 to its own employees for work at a second project, in Crown Heights, and $50,000 in penalties to the State.

“My office will aggressively pursue contractors who exploit affordable housing projects to line their own pockets by illegally underpaying workers,” Attorney General Schneiderman said. “Subcontracting out the work on a taxpayer-funded project does not free the general contractor from the obligation to ensure that workers on site are paid their due. Procida will be held accountable for its own violations and for lax oversight of its subcontractor’s practices.”

From October 2011 through October 2012, during construction of the Riverway affordable housing project, at 230 Riverdale Avenue, Procida’s subcontractor paid more than 30 workers far below the wage required by law. The subcontractor failed to pay overtime, failed to pay the required prevailing wages, and violated other applicable labor laws. In addition, between December 2007 and April 2010, Procida itself underpaid four employees at a Crown Heights affordable housing project located at 1055 St. John’s Place.

Most workers will receive between $10,000 and $30,000, depending on the total number of hours they worked without receiving proper compensation.

Federal and state prevailing wage laws seek to ensure that government contractors pay wages and benefits that are comparable to the local norms for a given trade, typically well above the state and federal minimum wage of $7.25 per hour and hold general contractors responsible for underpayments by their subcontractors. The projects included in the settlement were developed by New York City’s Department of Housing Preservation and Development and were subject to prevailing wage requirements.

The settlement contains measures to ensure future labor law compliance by Procida and its subcontractors, including independent monitoring of its labor practices on public work projects for two years, with unannounced on-site inspections. In addition, Procida’s contracts with any subcontractor on public or private construction projects must state that compliance with labor laws is a material term of the contract and that the subcontractor may be terminated if it does not fix labor law violations brought to its attention. Procida must also notify the Attorney General’s Office of any accepted bids to perform work on projects subject to prevailing wage laws and must refrain from using debarred subcontractors on public or private construction jobs.

This article appeared in print on page 5 of the March 5th, 2013 edition of Hamodia.