Archive for the ‘Public Works’ Category

A New York City contractor recently agreed to pay nearly $1 million dollars to settle a prevailing wage investigation into complaints that one of its subcontractors on a public housing project underpaid 31 masonry workers and bricklayers.  The contractor also agreed to pay $100,000 in back wages to four of its laborers, plus $50,000 in costs and fees to the state.

The New York Attorney General’s prevailing wage investigation revealed that for over a year, the contractor’s subcontractor paid masonry workers and bricklayers between $16 to $22 dollars per hour, with no overtime premium, for work that should have been paid at a prevailing wage rate of between $53.55 to  $72.44, plus supplemental benefits.  The investigation further revealed two instances where the contractor failed to classify or list employees in its certified wage payroll reports and two other instances where employees were misclassified at pay rates below what they should have been paid.

The New York Attorney General’s office said that in addition to requiring government contractors to pay wages and benefits comparable to local norms for a given trade, federal and state prevailing wage laws also hold general contractors responsible for underpayments by their subcontractors.

The settlement mandated that the contractor’s contracts with any subcontractor on public or private construction projects 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.

According to New York’s Attorney General, his office will hold contractors accountable for their prevailing wage violations and for their lax oversight of subcontractor’s practices.

Lesson:  Contractors need to pay attention to their subcontractor’s payment practices.

This article is authored by attorney Shannon O. Young and is intended for educational purposes and to give you general information and a general understanding of the law only, not to provide specific legal advice. Any particular questions should be directed to your legal counsel or, if you do not have one, please feel free to contact us.

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Under the Pennsylvania Public Works Employment Verification Act (“the Act”), a new law that takes effect on January 1, 2013, public works contractors and subcontractors working on projects (funded at least in part by a public body) with an estimated value of $25,000 or more, will be required to enroll and participate in the federal E-Verify electronic employment eligibility verification system (“E-Verify”).  E-Verify is an internet based system that confirms the legal work authorization status of newly hired employees by comparing information on the employee’s Form I-9 with records on file with the U.S. Department of Homeland Security and Social Security Administration.  Specifically, as a precondition to being awarded a public works contract, the Act mandates that before the execution of the contract, the contractor and its subcontractors provide the contracting agency with a Verification Form, certifying the contractor’s and subcontractor’s compliance with the E-Verify requirement.    

Contractual Language.   The Act also requires that contracts between a public works contractor and its subcontractors contain information regarding the requirements of the Act.  Thus, it is highly recommended that Public Works contractors revise theirs subcontracts before January 1, 2013 to comply with the Act.    

Enforcement of the Act.  To ensure compliance with the Act, the Department of General Services has been granted the authority to conduct random and complaint-based project audits.  The penalties for failing to comply with the Act include monetary fines and debarment from public work. 

Good Faith Defense.  Notably, the Act contains a “Good Faith” defense clause that shields employers from liability if the employer takes adverse action against a newly hired employee in reliance on an E-Verify determination that the individual is not authorized for employment. 

The attorneys at Harmon & Davies are available to assist public contractors with revising their subcontractors to comply with the Act. 

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