Construction Industry Wage Theft Bill Becomes Law

Governor Hochul signed the Construction Industry Wage Theft bill (The labor law is amended by adding a new section 198-e) into law on Labor Day.

The law which affects contracts entered into on or after January 4, 2022, makes general contractors (including a  construction manager, general or prime contractor, joint venture, or any combination thereof) jointly responsible -limited to three years-for wage theft violations committed by subcontractors. An individual or a representative could file a lawsuit against the employer-subcontractor and the general contractor.  Additionally, the attorney general may bring an action to collect unpaid wages and penalties on behalf of employees.

Generally, employees and subcontractors cannot waive a contractor's liability for unpaid wages, benefits, wage supplements, and other remedies, including attorneys' fees and costs incurred by an employee pursuing unpaid wages.  There is, however, an exception for unions that may waive the requirement through collective bargaining.

Also excluded from the act are certain classes of residential construction projects.

General Business law is also amended by adding a new section 756-f to provide that a contractor may request certified payrolls to apprise the contractor of a subcontractor's payment status in paying wages and making any applicable fringe or other benefit payments  or contributions.  In addition, the contractor may ask that the subcontractor provide   (a) the names of all workers of such subcontractor on the project, including the names of all those designated as independent contractors;  (b)  when applicable, the name of the contractor's subcontractor with whom such subcontractor is under contract; (c)  the anticipated contract start date; (d) the scheduled duration of work; (e) when applicable,  local unions with whom such subcontractor is a signatory contractor; and (f) the name, address and phone number of a contact for such subcontractor.  The subcontractor's failure to timely comply with a request for information shall be a basis for a contractor to withhold payments owed to a  subcontractor at any tier.

If you would like more information regarding this topic please contact Thomas S. Tripodianos at ttripodianos@wbgllp.com or call (914) 607-6440