Wage theft costs American workers an estimated $15 billion to over $40 billion per year and continues to be one of the most troubling aspects of employment in the United States. The US Department of Labor fights it, state governments fight it, law firms like Pelton Graham fight it, but wage theft persists. On Labor Day this year, New York state added an important new weapon in the fight against wage theft in the construction industry.

Wage theft happens every day all across the US economy. In the construction industry, failure to pay the prevailing wage is often the issue at stake. The reality is that all types of wage theft occur in the industry, from basic minimum wage violations to failure to pay highly compensated workers for overtime or for all hours worked. Wage theft by companies involved in big construction projects is particularly troublesome because responsibility for wages earned can sometimes be avoided by using the complex legal structures that are created to execute those projects. 

For example, a prime contractor on a big project will have one or more “principal” plumbing contractors. Those plumbing contractors have tiers of subcontractors, some of which supply “labor” to the other contractors, who have the tools, trucks, supervisors, etc. If any one of those subcontractors does not pay its employees, those workers can only claim against their “direct employer,” and have no recourse against the higher tier contractors. In New York, at least, the unpaid workers will now have recourse. 

On Labor Day, New York Governor Kathy Hochul signed an important new law aimed at curbing the epidemic of wage theft in the construction industry. The bill makes the primary contractor on a project liable for payment of all wages for the workers on the project, regardless of which contractor or subcontractor is the direct employer. 

Every new law proposed in New York has a “Justification” section; here is the justification for the new law, which clearly states the issue, the millions of dollars of unpaid wages at stake, and the pretty straightforward solution: 

This bill would provide New York construction workers with a new remedy

against wage theft. Currently, a worker may bring a private lawsuit

against his/her direct employer to collect any unpaid wages, including

overtime and fringe benefits. This is a major issue in the construction

industry where, oftentimes, such direct employer is an unscrupulous

subcontractor or labor broker willing to hide assets, change corporate

identity and take part in other unscrupulous practices to avoid liability 

and make themselves judgment proof from a wage theft action.

By holding the prime contractor of the construction project liable for

all subcontractors that it chooses to utilize on a job site, New York

State would go a long way towards ensuring that exploited construction

workers are quickly able to collect unpaid wages …

So, bravo New York for taking a step to combat wage theft in the construction industry, with the “unique” idea that those in control of a project should be responsible for seeing that the workers on the project are paid and paid legally.

Wage theft in the United States takes many forms and is found in literally every sector of the economy, from small family-owned stores to major corporations and even law firms. The term “wage theft” covers a variety of illegal activities, such as:

  • Failure to pay minimum wage
  • Failure to pay overtime
  • Classifying employees as “managers” to avoid paying overtime
  • Short payment on the last check
  • Failure to pay commissions
  • Check bounced/company went bankrupt
  • Early arrival required but clock in later/required to stay after clock out
  • Deduction for mealtime and breaks not taken
  • Paying “comp time” instead of overtime
  • No pay for attending mandatory events like training, meetings, etc.

Pelton Graham has gotten results for thousands of people like you – people seeking their legal pay, freedom from harassment and discrimination, protection for blowing the whistle, payment for accident injuries, and other legal relief. 

Contact us today for a no-cost, no-obligation assessment of your situation. We’re available for telephone, video, and in-person consultations. 

Image by Borko Manigoda from Pixabay