ALBANY, N.Y.—Both houses of the New York State Legislature have passed a bill that would hold general contractors on private construction jobs jointly responsible for wage-theft violations committed by subcontractors on the site.
The bill, sponsored by state Sen. Jessica Ramos (D-Queens) and Assemblymember Latoya Joyner (D-Bronx), passed the Senate by a 50-13 vote June 2. The Assembly, which had approved an earlier version in January, passed the revised measure by 122-25 on June 1.
“This is a monumental victory for working people all across New York State,” Gary LaBarbera, president of the New York State Building and Construction Trades Council, said in a statement. “We look forward to working with Governor Cuomo to enshrine this protection into law to ensure that all construction workers – no matter their background, union affiliation, or the jobsite they work on – are afforded the dignity and respect they deserve.”
The bill was the New York building-trades unions’ top legislative priority this year, District Council of Carpenters executive director Eddie McWilliams told LaborPress in April. Five states and the District of Columbia have enacted similar laws, according to the unions.
Estimates of the amount of pay stolen from workers in New York State range from $500 million to $3.2 billion a year. Common forms of wage theft include simply not paying workers, not paying them for all the hours they worked, not paying overtime, and hiring them off the books or as independent contractors to evade having to pay minimum wage and make contributions to the state’s unemployment-insurance and workers’-compensation funds.
Wage theft is believed to be most common in construction and the hospitality industry. The victims are often immigrants — especially the undocumented — and day laborers, women in low-wage jobs, and workers hired through middlemen such as “labor brokers.”
Several business groups opposed the legislation, saying that it would put an unfair burden on employers. Subcontractors are “often many tiers removed from the general contractor,” Associated General Contractors of New York State head Mike Elmendorf argued in April. Those who violate the law “should bear responsibility for their own violations,” he added, especially when the general contractor had “no knowledge or notice of the violation.”
It is often difficult to determine exactly who is responsible for paying workers, McWilliams explained, because sleazy subcontractors often create a network of shell companies to blur the paper trail. Still, he argued, general contractors have to identify every worker on their job for insurance purposes and to document that they’ve all received the required basic safety training.
“There’s no way they can’t know who’s on the job,” he said in April. “What they don’t want to know, or be responsible for, is the wage theft that goes on.”
The bill would require subcontractors to give general contractors “certified payroll records” if requested. Those records, it says, should contain enough information to show the subcontractor’s status on paying wages and making payments for benefits.
General contractors would also be able to request the names of all the subcontractor’s workers, including those designated as independent contractors; the starting date and the scheduled duration of work; and the name, address, and phone number of a person to contact.
Failing to comply with those requests on time would be a legal ground for a contractor to withhold payments owed to a subcontractor.
The Legislature also sent Gov. Cuomo a bill to close the “judicial loophole” created when state courts ruled that paying a worker only part of what they’re owed is considered wage theft, but not paying them anything isn’t. That bill, sponsored by Sen. Andrew Gounardes (D-Brooklyn) and Assemblymember Jo Anne Simon (D-Brooklyn) was passed by the Senate 51-12 in February. The Assembly approved it by a 138-10 margin on June 2.
However, a measure intended to prevent employers accused of wage theft from evading payment has not yet been scheduled for a vote. The SWEAT Act (Securing Wages Earned Against Theft) would enable workers whose claims are considered likely to succeed to freeze their employer’s assets, much like the “mechanic’s lien” that a landscaper or construction contractor can use against homeowners who haven’t paid their bills.
The Legislature passed a version of the bill in 2019, but Gov. Cuomo vetoed it, saying that it was “inadequate due process” to put liens on employers’ property before they had been judged guilty.
Supporters of the bill respond that employers accused of wage theft, particularly restaurants and laundries, often conceal or transfer their assets — such as by closing down and reopening “under new management” — to make it impossible for workers who are awarded back pay to collect it.
“Sadly, wage theft judgments are worth little more than the paper they are written on,” Assemblymember Linda B. Rosenthal (D/WF-Manhattan), the bill’s sponsor along with Sen. Ramos, said in a statement after she spoke at a rally June 2 outside Cuomo’s Manhattan office. The protest urged Senate Majority Leader Andrea Stewart-Cousins and Assembly Speaker Carl Heastie to bring the bill to a vote.