[New York] Construction wage theft bill passed by state legislature

Earlier this month the New York State Senate and State Assembly passed legislation that could shift liability for wage theft cases on private construction projects onto general contractors, Construction Dive reports.

Ordinarily, in a wage theft case a worker files suit against whoever directly employs them, such as a subcontractor, in order to recover unpaid wages. However, this bill - sponsored by state Senator Jessica Ramos - makes general contractors directly liable, as a way to incentivise them to police both their subcontractors' wage practices and their own.

The bill will be delivered to Governor Andrew Cuomo's desk for him to either sign into law or veto. If the bill is signed, New York will become the sixth state (in addition to Washington, D.C) to adopt this type of protection against wage theft for construction workers.

Under the legislation, the contractor - defined as the construction manager, general/prime contractor or joint venture which entered into a contract with the owner - will be liable for unpaid wages owed to a worker by any subcontractor on any level of the project. 

However, subcontractors would not be liable for unpaid workers upstream or downstream of themselves, Jim Barlow, attorney at Cotney Attorneys & Consultants, told Construction Dive.

Wage theft is the denial of salary payment or other benefits to an employee by an employer. Mr Barlow said that some estimate wage theft in New York to cost workers as much as $1 billion a year. 

The New York State Building & Construction Trades Council, which represents over 200,000 unionised employees, said the bill's passage was a "monumental victory for working people."

In a statement shared with Construction Dive, Gary LaBarbera - president of the Trades Council - said, "From day one, this legislation was all about putting the interests of working people ahead of those of unscrupulous contractors in the construction industry." 

Mr Barlow said recouping wages would be much easier for workers, as a contractor cannot shield itself from liability by requiring parties to sign waivers. Additionally, if a poorly funded subcontractor should go out of business, an unpaid worker could still bring suit to recover wages against the contractor.

Local jurisdictions are also cracking down on fraud. For example, following recent incidents involving unreported cash payments by subcontractors on construction projects, Pittsburgh Mayor William Peduto signed an executive order to prevent construction companies in the city from committing tax, insurance and workers' compensation fraud. It also aims to stop the practice of paying workers in cash to avoid taxes. (Link via original reporting)

Earlier this month the New York State Senate and State Assembly passed legislation that could shift liability for wage theft cases on private construction projects onto general contractors, Construction Dive reports.

Ordinarily, in a wage theft case a worker files suit against whoever directly employs them, such as a subcontractor, in order to recover unpaid wages. However, this bill - sponsored by state Senator Jessica Ramos - makes general contractors directly liable, as a way to incentivise them to police both their subcontractors' wage practices and their own.

The bill will be delivered to Governor Andrew Cuomo's desk for him to either sign into law or veto. If the bill is signed, New York will become the sixth state (in addition to Washington, D.C) to adopt this type of protection against wage theft for construction workers.

Under the legislation, the contractor - defined as the construction manager, general/prime contractor or joint venture which entered into a contract with the owner - will be liable for unpaid wages owed to a worker by any subcontractor on any level of the project. 

However, subcontractors would not be liable for unpaid workers upstream or downstream of themselves, Jim Barlow, attorney at Cotney Attorneys & Consultants, told Construction Dive.

Wage theft is the denial of salary payment or other benefits to an employee by an employer. Mr Barlow said that some estimate wage theft in New York to cost workers as much as $1 billion a year. 

The New York State Building & Construction Trades Council, which represents over 200,000 unionised employees, said the bill's passage was a "monumental victory for working people."

In a statement shared with Construction Dive, Gary LaBarbera - president of the Trades Council - said, "From day one, this legislation was all about putting the interests of working people ahead of those of unscrupulous contractors in the construction industry." 

Mr Barlow said recouping wages would be much easier for workers, as a contractor cannot shield itself from liability by requiring parties to sign waivers. Additionally, if a poorly funded subcontractor should go out of business, an unpaid worker could still bring suit to recover wages against the contractor.

Local jurisdictions are also cracking down on fraud. For example, following recent incidents involving unreported cash payments by subcontractors on construction projects, Pittsburgh Mayor William Peduto signed an executive order to prevent construction companies in the city from committing tax, insurance and workers' compensation fraud. It also aims to stop the practice of paying workers in cash to avoid taxes. (Link via original reporting)