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NY Legislature Eyes Three Wage Theft Bills As Workers Continue to be Vulnerable

“It’s really just a common-sense fix,” Assembly Member Jo Anne Simon says. But a deeper issue, she continues, is that state labor law “doesn’t criminalize wage theft.”

ALBANY, N.Y.—Three bills to strengthen New York’s wage-theft laws are now pending in the state Legislature.

The first, which the Assembly passed by a 123-27 vote on Jan. 26, would make general contractors on a job responsible for unpaid wages owed by their subcontractors. It was sponsored by Assemblymember Latoya Joyner (D-Bronx). The Senate version, sponsored by Labor Committee chair Jessica Ramos (D-Queens), has not yet seen any action.

The second, sponsored by state Sen. Andrew Gounardes and Assemblymember Jo Anne Simon, both Brooklyn Democrats, would close a “judicial loophole” in state labor law: Courts have ruled that paying a worker only part of what they’re owed is considered wage theft, but not paying them anything isn’t. The Senate passed it by 51-12 in February, but the Assembly has not yet taken any action.

The third, the Securing Wages Earned Against Theft (SWEAT) bill, was introduced in January by Ramos in the Senate and by Linda Rosenthal (D-Manhattan) in the Assembly. It would enable workers who have filed wage-theft allegations to put liens on their employers’ assets while their claims are pending, including assets held personally by the employer’s 10 main owners. The Legislature passed a similar measure in 2019, but Gov. Andrew Cuomo vetoed it, and the Assembly fell short of overriding that.

The Ramos-Joyner bill is the one most important to the building trades, District Council of Carpenters executive director Eddie McWilliams tells LaborPress: “The industry’s so convoluted the general contractors say, ‘we don’t know who’s on our job site.’” 

“It’s often very difficult to pinpoint who the employer is,” says Ramos. 

For example, McWilliams explains, carpentry subcontractor Gotham Drywall uses a network of at least 18 shell companies. Its workers sign in to jobs as Gotham Drywall employees, the Carpenters say, but “the payroll is spread out over multiple corporations, which further obfuscates worker records and tax information.” Most of those companies are registered at residential addresses, including apartments, with no sign that any construction equipment, tools, or material is stored there, according to papers filed in a 2019 class-action suit for wage theft against Gotham Drywall and subcontractor Allwood Construction.

In the case of Parkside Construction, a concrete contractor that pleaded guilty to payroll fraud in February, the general contractors said they didn’t know there was wage fraud going on, McWilliams says.

But general contractors, he adds, have to identify every worker on their job for insurance purposes, to document that they’ve all received the basic safety training mandated by the Occupational Safety and Health Administration. 

“There’s no way they can’t know who’s on the job,” McWilliams says. “What they don’t want to know, or be responsible for, is the wage theft that goes on.”

“It’s important to recognize just how rampant wage theft is in New York State,” Ramos says. She estimates that workers are cheated out of $1 billion a year, most commonly in construction and the hospitality industry. The victims are often immigrants, especially the undocumented, and day laborers hired off the books, women in low-wage jobs, and workers hired through middlemen such as “labor brokers.”

The SWEAT bill aims at a similar problem. When workers win a judgment for back pay, its supporters argue, the restaurant or laundry involved often closes and reopens after transferring its assets, rendering it impossible for the workers to collect their award. 

Gov. Cuomo said in January 2020 that he had vetoed it because it would give employers “inadequate due process,” by enabling workers or the state to put a lien on their property before the courts or state agencies had issued a judgment against them. 

But the purpose of the pre-emptive “employees’ lien,” Ramos and Rosenthal responded, was “to ensure the money is there when the case is over.”

The Gounardes-Simon bill, Assemblymember Simon told LaborPress, is intended to “right a wrong that’s been perpetrated by the courts misconstruing the Legislature’s intent.” 

Courts, she says, have held that state law only gives workers the right of recovery for illegitimate deductions from their pay, not if their full wages were withheld — most prominently in a 2012 ruling by a federal court in Manhattan.

But those rulings, she explains, resurrected the problem the Legislature was trying to solve when it passed the Unpaid Wages Prohibition Act in 1997. That law’s intent was to clarify that “all employees shall have the right to recover full wages, benefits, and wage supplements accrued during the six years previous to the commencing of such action,” and to counter a 1993 decision by the state’s highest court that said workers suing for back wages could not demand attorneys’ fees as part of the judgment. 

“It’s really just a common-sense fix,” Simon says. But a deeper issue, she continues, is that state labor law “doesn’t criminalize wage theft.”

A bill introduced in 2019 and 2020 by Assemblymember Catalina Cruz (D-Queens) would have done precisely that. Cowritten by Diana Florence, former head of the Manhattan District Attorney’s Construction Fraud Task Force, it would have added wages for work already performed to the list of items whose theft is defined as larceny in the state penal code. If the amount of pay withheld exceeded $1,000, the bill would have classified it as grand larceny, a felony. 

It also would have allowed prosecutors to aggregate the amount withheld from multiple workers into one single count. If the total amount stolen was more than $1 million, it would be a Class B felony, carrying a penalty of one to 25 years in prison. 

The measure did not get a committee hearing in the 2019-20 legislative session. LaborPress was unable to reach Assemblymember Cruz to find out if she plans to reintroduce it.

Sen. Ramos was not enthusiastic about the measure, however. “I’m not a fan of creating new crimes,” she says. “I’m interested in getting people their money.”

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