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New York State
Department of Labor

Andrew M. Cuomo, Governor Peter M. Rivera, Commissioner

Labor Department Announces Enforcement Actions Against Subcontractors on Student Housing Projects in Cortland and Brockport

Enforcement actions part of statewide crackdown on employers who misclassify workers as independent contractors or pay them "off the books."

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Albany, NY (June 14, 2010) -

State Labor Commissioner Colleen Gardner announced today the results of two 2009 enforcement sweeps at construction sites for student housing in Cortland and Brockport. Widespread violations of state labor laws were found, including failure to pay wages, nonpayment of overtime, improper deductions, a child labor violation, off-the-books employment and misclassification of workers as independent contractors instead of employees.

The sweeps were carried out by the New York State Joint Enforcement Task Force on Employee Misclassification on May 29, 2009 (Cortland) and June 5, 2009 (Brockport). The Task Force is an interagency strike force formed in 2007 to address the problem of employers who improperly classify employees as independent contractors or who pay workers "off the books." The violations occurred from early April through late June of 2009.

The general contractor on both projects was Christa Construction of Victor, NY. The developer is United Development of Troy, NY, which has developed privately-owned student housing projects located next to or near college campuses. Neither Christa nor United was named in any citations.

"On both sites, employers brought in crews of out-of-state workers to do construction work. Then they took advantage of them," said Commissioner Colleen Gardner of the New York State Department of Labor. "One crew of workers in Brockport worked for three weeks without pay, were fired and left stranded, with no money to get home to North Carolina. Another group worked for three months without being paid, except for being housed in an apartment in Brockport and getting some money for food. On the Cortland site, workers were paid off-the-books by one contractor, with no overtime. The other two contractors took illegal deductions from workers' paychecks."

Gardner added, "These problems are happening statewide. My message to employers who mistreat or misclassify your workers, whether you are from New York or another state, is: ‘You are cheating your workers and the taxpayers, and undercutting honest businesses. We are looking for you - and the chances of your getting caught have never been better.'"

 The Department of Labor assessed wages, interest and penalties totaling $412,749.75 for the two projects. Of that total, $143,620.37 was owed for Cortland ($68,020.37 in wages and interest, plus $75,600 in penalties) and $269,129.38 was owed for Brockport ($67,720.28 in wages and interest, plus $201,409.10 in penalties). For the two projects, nine companies were found to have misclassified 135 workers, and owe over $26,000 in unemployment insurance taxes.

The following are details on labor law violations for the Cortland site:

  1. Connelly Drywall, LLC and its principals of Fayetteville, NC.
  • One Order to Comply dated October 5, 2009 for the dates 4/8/09 through 5/21/09.
  • Employees were paid off the books at a rate of $120 per day, or $15 per hour. Overtime was not paid as required by law.
  • 13 workers are owed money for wages not paid and overtime totaling $22,800, plus interest of $1,309.28. A wage penalty of $45,600 and a records violation penalty of $30,000 were also assessed, for a cumulative total of $99,709.28.
  • The company is appealing the Order to Comply.
  1. Perone Plumbing of Syracuse, NY.
  • The company settled and has paid the Department of Labor $13,862.04 to reimburse 18 employees for illegal deductions from wages.
  1. Potter Heating of Syracuse, NY.
  • The company settled and has paid the Department of Labor $30,049.05 to reimburse 22 employees for illegal deductions from wages.

The following are details on the labor law violations for the Brockport site:

  1. Connelly Drywall, LLC and its principals of Fayetteville, NC.

Three Orders to Comply:

  • One, dated April 30, 2010 for dates June 1 - 13, 2009: Employees were paid off the books at a rate of $120 per day, or $15 per hour. Overtime was not paid as required by law. Two workers are owed money for wages not paid and overtime totaling $3,600, plus interest of $522.34. A wage penalty of $7,200 and a records violation penalty of $2,000 were also assessed, for a total of $13,322.34.
  • Another, dated August 6, 2009 for dates April 13 - June 3, 2009: Employees were paid off the books at a rate of $120 per day, or $15 per hour. Overtime was not paid as required by law. Ten workers are owed money for wages not paid and overtime totaling $23,430, plus interest of $512.94. A wage penalty of $46,860 and a records violation penalty of $10,000 were also assessed, for a total of $80,802.94.
  • A third, dated June, 29, 2009 for dates June 1 - 4, 2009: One child labor violation. Penalty of $20,000 was assessed.
  • Cumulative total for all wages, interest and penalties in 3 Orders to Comply is $114,125.28.
  • The company is appealing the Orders to Comply.
  1. LGS Group, LLC of Lincoln, RI and Guardado Construction LLC and their principals of Alexandria, VA
  • One Order to Comply, dated August, 6, 2009 for dates June 1 - 19, 2009: Employees were paid off the books at a rate of $10 - $15 per hour. Overtime was not paid as required by law. Seven workers are owed money for wages not paid and overtime totaling $14,780.75, plus interest of $310.99. A wage penalty of $29,561.50 and a records violation penalty of $14,000 were also assessed, for a total of $58,653.24.
  • The company is appealing the Order to Comply.
  1. East Coast Builders of Cicero, NY and KG Duarte International Group and their principals of Cicero, NY
  • One Order to Comply dated August 6, 2009 for dates April 13 - June 1, 2009: Employees were paid off the books at a rate of $250 - $400 per week or $6.26 - $10 per hour. Overtime was not paid as required by law. Five workers are owed money for wages not paid and overtime totaling $21,280, plus interest of $615.66. A wage penalty of $42,560 and a records violation penalty of $15,000 were also assessed, for a total of $79,455.66.
  • Company has not paid nor appealed the Order to Comply. The Department of Labor is preparing to seek a judgement for the amount due.
  1. East Coast Builders of Cicero, NY
  • One Order to Comply dated August 6, 2009 for dates June 13 - 26, 2009: Employees were paid off the books at a rate of $250 - $400 per week or $6.26 - $10 per hour. Overtime was not paid as required by law. Three workers are owed money for wages not paid and overtime totaling $2,613.75 plus interest of $53.85. A wage penalty of $5,227.60 and a records violation penalty of $9,000 were also assessed, for a total of $16,895.20.
  • Company has not paid nor appealed the Order to Comply. The Department of Labor is preparing to seek a judgement for the amount due.

Employee misclassification occurs when a worker is improperly denied the benefits and protections provided to an "employee" as that term is defined by state and federal law.  Misclassification hurts workers, deprives the government of tax revenue, and undercuts legitimate employers who classify their workers correctly. Last week, the Department of Labor announced the results of two other sweeps of construction sites in Rochester and Orange County, which found $178,453.25 in wages and interest due workers, plus $152,089.92 in penalties due the state for the two sites.

Most Joint Task Force sweeps start as tips received from individuals or businesses, or through observations by Task Force members. Anyone who knows about or suspects possible violations of New York State labor laws is encouraged to contact the Task Force in the Department of Labor's Employer Fraud Unit at 1-866-435-1499, 24 hours per day, 7 days a week. All tips are taken seriously, and you can remain anonymous. For more information, see the Department of Labor's web site at www.labor.ny.gov/agencyinfo/MisclassificationofWorkers.shtm.

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