Comptroller Reports Debarring 26 Contractors For Wage Violations

by Brooklyn Eagle

New York City Comptroller William C. Thompson Jr. reports that over the last six and a half years his office has debarred 26 contractors who have broken the law by failing to pay workers the required wages and benefits afforded to them under state prevailing wage laws.

“Prevailing wage laws exist to protect hard-working New Yorkers who labor on public projects, such as schools, hospitals and other government buildings and offices,” Thompson said. “Contractors who flagrantly break those laws by underpaying workers must be punished and pay the high price of being debarred from doing business with the city and state.”

“Enforcing prevailing wage laws benefits not only workers, but all New Yorkers by helping to ensure quality work on public projects. By enforcing the law, we also try to ensure that only responsible contractors work for the City of New York.”

Thompson’s Bureau of Labor Law has debarred 26 contractors during his tenure. Of the 26, 15 currently are prohibited from doing business with the city and state.

Contractors and subcontractors are ineligible to submit a bid on or be awarded any public works contracts or subcontracts with any state, municipal corporation or public body for five years when two willful determinations have been rendered against them within any consecutive six-year period, or when there is any willful determination that involves the falsification of payroll records or the kickback of wages or supplements.

The following companies were among those debarred by Thompson:

In February 2008, Start Elevator Inc. and several related entities agreed to being debarred from doing business with the city and state for five years. Thompson also reached a settlement with Start Elevator and Prude Construction Corp., the prime contractor in the case, to pay $257,649, which includes restitution to 23 underpaid workers and a civil penalty to the city.

The case stemmed from prevailing wage violations under two contracts. The Metropolitan Transportation Authority (MTA) contracted with Prude Construction to replace elevators in the West 4th Street subway station in order to comply with the Americans with Disabilities Act. Prude subcontracted with Start Elevator to perform certain work. Under a separate contract, Start Elevator also provided elevator modernization work for the Department of Transportation. Start Elevator failed to pay prevailing wages and supplemental benefits to its workers under both contracts.

In January 2008, Kelly’s Sheet Metal, Inc., a heating, ventilation and air conditioning contractor, was debarred for falsifying payroll records and failing to pay employees prevailing wages and benefits for their work at Bellevue Hospital. Thompson also assessed an underpayment with interest and civil penalty of $215,668.

The debarment and assessment of underpayment came after a five-day hearing at the Office of Administrative Trials and Hearings. Kelly’s Sheet Metal hired three workers “off-the-books” to perform sheet metal work on air-conditioning ducts and steam fitting work on air-conditioning and fire sprinkler systems at Bellevue from November 2003 to December 2004. One worker was paid only $100 per day, and the other two workers received no payment at all.

In December 2007, Paradise Construction officials pleaded guilty to a Class E felony for submitting false payroll documents to the Department of Parks and Recreation (DPR). The prevailing wage violations occurred in 2004 and 2005 on two playground reconstruction projects — Patterson Playground in the Bronx and Harry Maze Memorial Park in Brooklyn.

Paradise also paid $236,544 in back wages and interest to the underpaid workers and $23,654 in a civil penalty. The guilty plea was from a joint investigation conducted by the comptroller’s office, the Kings County District Attorney, the Inspector General’s office for DPR, and the DPR.

According to the criminal complaint and plea agreement, Paradise submitted certified payroll reports to DPR indicating that it had paid at least four workers prevailing wages and supplemental benefits in amounts ranging from $48 to $59 per hour. Investigators, however, found that the company had only paid the workers between $10 and $15 per hour in cash off the books.

In February 2007, Integrity Construction & Consulting Services was debarred for failing to pay seven workers (four carpenters, two laborers and one bricklayer) nearly $300,000 in prevailing wages and benefits. The Department of Housing Preservation and Development contracted with Melcara Corp. to serve as construction manager for repairs and renovations at 536-38 West 163rd St. in Manhattan. Melcara hired Integrity Construction to act as general contractor. Integrity Construction, however, failed to pay the workers the legally required wages and benefits for work they performed during October 2003 to July 2004.

An administrative law judge determined that Integrity Construction falsified its certified payroll reports by understating the number of hours its employees worked and reporting payments for supplemental benefits it had not made. The two laborers received only $10 an hour in wages with no benefits, though they should have received $28.05 an hour and $15.19 an hour in supplemental benefits, and the three carpenters were paid $20 an hour with no benefits, though they should have received $38.78 an hour in wages and $26.31 in benefits.

In October 2007, the comptroller entered into a settlement with Severn Trent Environmental Services, which had misclassified employees performing work on a contract involving the reconstruction of eight tanks at the 26th Ward Water Pollution Control Plant in Brooklyn. The company misclassified millwrights as laborers and paid them at the lower laborer wage rate, with a difference of approximately $20 per hour. As part of the settlement, Severn Trent was debarred and also paid $136,000 in back wages, interest and a civil penalty.

In February 2006, the comptroller’s settled with Cappry Contracting Management Corp. for failing to pay prevailing wages to laborers and pointers who worked on two school construction projects in Queens. The company also failed to comply with requests for information, refusing to submit payroll records and other documentation. Administrative Law Judge Kevin Casey found that the contractor willfully failed to comply with the comptroller’s requests and appear at the hearing, and that the comptroller had established that the contactor had falsified payroll records and failed to pay prevailing wages and supplemental benefits to 19 workers. Cappry was assessed $600,000 including interest and a civil penalty.

In August 2005, Florence XVI Century Marble Inc. was debarred as a result of pleading guilty to a Class E felony for falsely reporting that it had paid prevailing wages and benefits. The company conceded that it filed false certified payroll reports between 2001 and 2004 with the New York City Transit Authority in order to conceal nearly $800,000 in unpaid prevailing wages and supplemental benefits to twenty-six workers on five subway projects. The MTA Inspector General’s Office discovered the deception during a routine audit and brought it to the attention of the Comptroller’s Office and the Kings County District Attorney’s Office.

In June 2005, Olympia Mechanical Piping & Heating entered into a plea agreement with the Manhattan district attorney’s office. Company officials pleaded guilty to paying less than prevailing wages to some of their laborers who installed water meters for the New York City Department of Environmental Protection from 1997 to 2002. The Class E felony convictions constituted an automatic debarment under the Labor Law and the plea agreement included an underpayment and civil penalty of $425,000.