Combating Wage Theft and Other Labor Crimes

NEWBURGH – Orange County District Attorney David M. Hoovler and Dutchess County District Attorney William V. Grady joined local union leaders and Joan Cusack-McGuirk, President and Chief Executive Officer of Montefiore St. Luke’s Cornwall Hospital to highlight regional efforts to combat wage theft and other labor crimes. The press conference was held in the lobby of Montefiore St. Luke’s Cornwall’s Newburgh campus, which has been the site of ongoing extensive construction projects which largely utilize area companies and labor.

District Attorney Hoovler, District Attorney Grady and Sullivan County District Attorney Jim Farrell, who could not attend due to a scheduling conflict, pledged to prosecute wage theft cases to the fullest extent of the law and announced a zero-tolerance policy for any business that exploit workers and steals wages from employees.

All employees, whether they work on public projects or private contracts, are entitled to receive their proper wages, and New York law provides criminal sanctions for employers who fail to pay, or steal, employees’ wages. New York State Department of Labor statistics show that in 2018, more than $35.3 million in fraudulently obtained money was returned to 35,000 workers throughout the state who were victimized by wage theft and public work violations.

From left, Joseph Surace, vice president of operations at Montefiore St. Luke’s Cornwall in Newburgh, gives a tour of the construction site for the Emergency Department expansion to Orange County District Attorney David Hoovler and Dutchess County District Attorney William Grady following a press conference on Thursday afternoon at the hospital on wage theft.

Fraud involving Workers Compensation Insurance and Unemployment Insurance also costs the state, private companies and local governments huge sums of money every year. District Attorney Hoovler and District Attorney Grady stressed their commitment to see that any allegations that workers’ safety or consumers’ safety have been recklessly compromised by construction companies looking to cut corners will be full investigated, and if appropriate, aggressively prosecuted.

Under New York State law, workers on all public works projects are entitled to receive the “prevailing wage” for the type of work that they perform. The prevailing wage is the minimum an employee can be paid on a public works project. The New York State Department of Labor establishes prevailing wages. The requirement to pay prevailing wages to all workers on public projects is set forth in the New York State Constitution and New York State Labor Law. Usually, contractors on public works projects are selected after a competitive bidding process. In addition to cheating employees, the failure to pay prevailing wages gives unscrupulous contractors the ability to submit lower bids than honest contractors. A contractor who pays less than the prevailing wage will have lower labor costs and will therefore be more likely to be awarded the contract as the lowest bidder. That is grossly unfair to competing, honest contractors who play by the rules.

“Wage theft and construction industry tax fraud is bad for workers, bad for honest contractors and bad for taxpayers. These are not victim-less crimes. The cost of the “underground economy” is stealing our work and dollars from us and other area taxpayers, while at the same time increasing insurance costs for those businesses and taxpayers that pay their bills. This is a rampant and dangerous crime that needs to exposed and prosecuted,” said Alan Seidman, Executive Director of the Construction Contractors Association of the Hudson Valley.

Joan Cusack-McGuirk, President and Chief Executive Officer of Montefiore St. Luke’s Cornwall, spoke of the hospital’s positive experiences using area contracting companies on construction projects at the hospital and stated that quality and safety at the hospital during those projects has never been negotiable. Cusack-McGuirk said, “As an economic engine in the Hudson Valley generating $300 million in economic activity, and as an organization that provides high quality clinical care to more than 250,000 residents per year, we are committed to ensuring that all workers have a safe job site and secure employment. On behalf of Montefiore St. Luke’s Cornwall, we applaud our District Attorneys, David Hoovler, Jim Farrell, and William Grady for bringing this critical conversation forward.”

“I have made it a priority under my administration to support Orange County’s workers,” said District Attorney Hoovler. “No one deserves to be victimized while they are earning money to support their families. An employer’s number one responsibility is to make sure that its employees have been paid what they were promised. My office will do everything in its power to ensure that workers receive legal wages and are not victimized either while they are working. I am pleased to be working with organized labor in Orange County to ensure that contractors who illegally pay improper wages no longer enjoy an advantage over contractors who follow the law. The illegal activities of unscrupulous contractors give thoseS contractors an unfair advantage over contractors who play by the rules, particularly when contractors are bidding against each other to work on public work’s projects.”

District Attorney Farrell said that, “Wage theft from workers by unscrupulous employers of monies rightly and justly due them will not be tolerated in Sullivan County. These matters will be fully investigated and prosecuted by my office. Hard working people deserve our support and they will get it and those that would exploit them through wage theft or other labor crimes should be on clear notice that they will be held responsible and accountable in criminal court.”

District Attorney Grady stated, “Compliance with the ‘prevailing wage law’ of New York is extremely important in that it insures that all workers on municipal projects are paid in accordance with state standards so that a level playing field is created between union and non- union contractors when bidding for municipal jobs. We in Dutchess are taking a proactive approach to the important issue of ‘prevailing wage’ by working together with municipalities, school districts, the construction contractors association and the Hudson Valley Trades Council to ensure that bidders are reminded that a violation of Sec. 220 of the Labor Law is a crime and that my office will pursue enforcement of that law.”

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