New York Employers: Beware Costly Non-Compliance With Prevailing Wage

Employers contracted to complete a public work project must become informed of local and state prevailing wage law, as the cost of non-compliance is steep. Because fines and penalties are calculated on a per-day basis, a month-long project can result in 30 separate violations. usadollarbills.jpg

From January 2014 through July 2014, the New York City comptroller's office said it has assessed $4 million in prevailing wage violations, plus an additional $250,000 in penalties paid to the city.

There are similar rules for companies that secure federal government contracts, under the Davis-Bacon Act. That measure applies to contractors and subcontractors working on federally-funded or assisted contracts of more than $2,000 for construction, alteration or repair of public buildings or public works. In addition, companies that land federal contracts in excess of $100,000 must pay laborers, mechanics and guards time-and-one-half the regular rate of pay for any hours worked over 40.

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New York Prevailing Wage: Are You Being Paid Fairly?

Under New York's prevailing wage law, private contractors who are awarded public contracts for construction or maintenance of a public project must pay workers according to the approved prevailing wage schedule, set forth by either the State Department of Labor or the New York City Office of the Comptroller.
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The purpose of a prevailing wage is twofold: The first is to ensure workers have a decent quality of life. The second is to assure the construction of and services within a government-owned facility are of high quality.

Workers covered under this statute are most often those in building, construction and service trades, which could include everything from gardeners to janitors. The amount of pay is based on the local collective bargaining agreement with at least a third of the trade union membership for each jurisdiction. That means the wage schedules vary on a county-by-county basis. Based on the current schedule, a Class C janitor in New York County would be entitled to a current prevailing wage of $23.35 an hour, whereas a janitor in Nassau can expect to receive a prevailing wage of $12.32 hourly.

Those employed in trades are increasingly becoming educated on employer obligations under this law, and in turn have received compensation in cases where companies failed to pay workers appropriately. While current laws don't generally allow workers to sue their employer for prevailing wage violations, many have found that hiring an experienced prevailing wage attorney has resulted in the facilitation of formal complaints with relevant government agencies, which in turn remedy the situation by requiring back-pay and future compliance.

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Understanding New York Overtime Rights: A Workers' Guide

A number of successful New York wage-and-hour lawsuits have made headlines recently, after the courts determined companies failed to comply with the state's strict overtime requirements.
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These cases are indicative of a growing trend in employment litigation, where the laws have become more strict and employees are increasingly more educated about their rights.

New York Labor Law and the federal Fair Labor Standards Act requires companies to pay time-and-a-half for any hours over 40 in a regular work week to non-exempt employees. Current minimum wage in the state is $8, until Dec. 31, 2014, when it increases to $8.75. It will increase again the following December to $9 hourly.

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New York Labor Law Violations: Don't Risk Your Business

Over the last two decades, the Federal Judicial Center reports the number of wage-and-hour lawsuits filed nationally has spiked by 430 percent. In New York, the number is expected to climb even higher in response to a bill passed by the New York legislature in June 2014.
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The measure, A08106C/S05885-B, was drafted for the purpose of bolstering the New York Wage Theft Prevention Act, as well as other provisions of the state's labor law. The action does ease some requirements for employers, but it imposes heftier penalties for violations - particularly for repeat offenders - and allows for successor employer liability, something that didn't before exist.

Because wage and hour theft law in New York has become increasingly complex, and the penalties for breaking the law ever more severe, it's important that business leaders take the time to become educated about their obligations and potential consequences for violations.

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Mandatory Arbitration Agreements: Avoiding "Unconscionable" Finding

February 27, 2014

New York arbitration agreements have become one of the best ways that companies can insulate themselves from costly litigation that may stem from employment disputes or allegations of liability from consumers. handwriting.jpg

However, they will do little good if challenged and found to be "unconscionable," and therefore unenforceable, by a judge. In fact, this may only serve to prolong the proceedings and increase costs.

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New York Start-Up Ventures Face Many Legal Hurdles

February 25, 2014

Some of the most impressive technology start-ups have some sort of dubious story of origin. It now appears that Square, a credit card processing firm, may be no different.
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The company has been hit with a business lawsuit alleging breach of fiduciary duty and patent infringement by a professor who had worked with the co-founders prior to the establishment of the firm.

In Robert E. Morely, Jr. v. Square Inc., the professor claims in the federal court filing that he was wrongly cut out of the business that developed into Square, despite having invented the technology that became the company's bread-and-butter.

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New York Commercial Lease Agreements Require Careful Review

February 22, 2014

In a recent commercial landlord-tenant dispute in New York City, the owner of a new business slated to open where a Chinese restaurant once operated is seeking $22 million from the landlord due to a termite infestation, as well as other structure problems that have so far required extensive repairs.
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The BBQ restaurant plaintiff alleges in the New York State Supreme Court filing that the landlord first lied about the condition of the First Avenue structure, and then attempted to initiate an eviction of the tenant when repairs were demanded.

The series of structural issues with the building has delayed the opening of the business for several months, leading to hundreds of thousands of dollars in lost revenue. That's in addition to the $600,000 monthly rent it pays, as well as the $3.1 million it has so far invested in repairs on structural deficiencies that were "almost too many to count," the plaintiff said.

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Regulator Probes Into For-Profit College Loans, Practices, Expands

February 20, 2014

Officials with the Consumer Financial Protection Bureau, along with 32 state attorneys general, are working to expand investigation into the promises and practices of for-profit colleges, with special attention being paid to student loans.
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There is ample indication, the watchdogs say, that there are unfair and deceptive lending practices at these institutions. Inquiries have also led authorities to believe that schools have been overstating the results of their offerings, fudging the facts on post-graduate job placement and more. These kinds of actions are likely to spur New York education lawsuits.

Among those that are being more closely scrutinized:


  • Education Management Co. (a chain partially-owned by Goldman Sachs Group Inc.);

  • ITT Educational Services Inc.;

  • Corinthian Colleges Inc.;

  • Career Education Corp.

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New York City Prevailing Wage Lawsuits & Third-Party Breach of Contract

February 18, 2014

Recently, the Second Circuit Court of Appeals sought guidance from New York's highest court on whether to defer to state labor officials on interpretation that the prevailing wage requirement for certain government contracts be paid only prospectively. sprinkler.jpg

The request for certification from the New York Court of Appeals in the case of Ramos v. SimplexGrinnell LP is rooted in a 2011 decision in federal court that granted SimplexGrinnell a summary judgment on a third-party breach of contract claim. Workers who had installed fire and sprinkler systems in government buildings while working for the firm alleged that the company had not paid them prevailing wages since at least as far back as 2001. As this was a "public works" project, the workers indicated, it was in clear violation of New York Labor Law, Article 8, Section 220.

New York City prevailing wage lawyers know that the law is quite clear: Every public works contract must have provisions to pay workers the prevailing wage. The Court of Appeals has previously indicated that employees, as intended third-party beneficiaries of those contracts, can bring breach of contract claims if they are not fairly compensated.

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Court Sets Strict Liability Precedence for Prevailing Wage Compliance

February 10, 2014

Under New York State's Labor Law, government contractors and subcontractors have to pay the set prevailing wage and fringe benefits to workers. The exact rate, which is pre-determined, depends on the type of work and where it's performed.
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Willful violations of New York's prevailing wage law by contractors can be met with severe penalties, including interest of 16 percent from the date of underpayments to the date of restitution and a penalty of up to 25 percent of the wages, supplements and interest.

Prime contractors can be held responsible for the non-compliance of subcontractors, so it's important that companies be diligent in ensuring their pay structure is properly designed.

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Report: 2014 Ripe for New York Wage-and-Hour Lawsuits

In the last several years, the U.S. Supreme Court made it tougher for individuals to bring forth successful discrimination lawsuits - particularly class action cases. One of the most recent examples is that of Wal-Mart Stores v. Dukes, decided in 2011. coins52jpg.jpg

However, workers haven't stopped filing employment lawsuits in New York. What it appears they are doing is shifting gears. Rather than focusing on things like racial discrimination, workers have been filing a larger number of wage-and-hour lawsuits. Most commonly, they allege employers misclassify workers, allowing them to skirt overtime pay and other benefits.

According to the annual Workplace Class Action Litigation Report, there were approximately 10 percent more wage-and-hour lawsuits filed last years as compared to what was filed in 2012. This year, it appears we might be on track to see even more wage-and-hour claims.

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Small Business Contracts With Feds Should Receive Legal Review

A recent New York Times report indicated that small business contracts with federal agencies dipped 11 percent over the last fiscal year.
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Still, the federal government continues to award hundreds of billions of dollars in private business contracts - some $460 billion by the end of last fiscal year. Plus, Congress just approved a $1.1 trillion spending bill for this fiscal year, and that's going to include a large number small business contracts.

These jobs can be the critical lifeblood of a small operation. Small businesses received about 18 percent of all federal contracts.The downward trend means not only is the process for securing the contract growing more competitive, but maintaining this work requires companies to be thorough in all aspects of their operation.

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New York Landlord-Tenant Dispute: No Heat Leaves Residents Heated

Tenants in Battery Park City's Gateway Plaza are in a heated dispute with their landlord over reportedly freezing conditions inside their units.
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News reports indicate the owner of the property has made numerous promises to repair faulty windows and heating units. However, those promises, tenants say, have gone largely unfulfilled while they have suffered through bouts of extreme cold, with snow and ice piling up inside unsealed windows.

There was talk at a recent Community Board 1 meeting of initiating a rent strike after a year of empty pledges to conduct the various repairs. Of approximately 3,500 units, only about 300 have received the repairs that were vowed. Now, the tenant association is discussing the possibility of filing a landlord-tenant lawsuit on the grounds that the landlord has violated the New York City warranty of habitability guidelines guaranteed to renters under the Rent Guidelines Board.

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Establishing Liability in New York City School Injury Cases

Two high school students reportedly suffered severe burns in New York City while conducting a routine lab experiment in class.
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According to news reports, the chemistry instructor had hoped to offer students a unique display of rainbow flames resulting from burning different kinds of nitrates. However, the buildup of volatile fumes instead ignited into a fireball that shot across the room, severely injuring two students. None who were present were wearing the appropriate safety goggles, witnesses say, and its alleged that a full minute passed before a fire extinguisher was located and used to put out the flames.

As the students continue to recover, the case remains under investigation. However, it seems clear there was at least some degree of negligence. The teacher and the school had a duty to ensure the safety of those children, and it seems that duty may have been breached.

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New York Patent Troll Litigation Ensnares Start-Up Founders

Many had hoped that by now, we'd be seeing more results from legislative efforts to help control the patent trolls.
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These are the opportunistic shell firms that exist solely for the purpose of snapping up obscure patents and then targeting any and all potential violators with the prospect of costly litigation.

As we reported in a recent New York business litigation blog post, President Barack Obama signed off on the Leahy-Smith America Invents Act two years ago. In part, this law made it unlawful for businesses to file a single patent lawsuit against numerous defendants. Now, patent holders have to file individual lawsuits for each company or entity that has allegedly infringed.

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