N.Y. AG announces $980,000 agreement with contractor

By Bryan Cohen | Mar 5, 2013

NEW YORK (Legal Newsline) - New York Attorney General Eric Schneiderman announced a $980,000 agreement Monday with a public works contractor that allegedly underpaid dozens of workers during the construction of two affordable housing projects in Brooklyn.

Between October 2011 and October 2012, Procida Construction Corp.'s subcontractor allegedly paid more than 30 workers far below minimum wage during construction of the Riverway affordable housing project. The subcontractor allegedly failed to pay the required prevailing wage, failed to pay overtime and violated other labor laws. Additionally, between December 2007 and April 2010, Procida allegedly underpaid four employees during the construction of a Crown Heights affordable housing project.

"My office will aggressively pursue contractors who exploit affordable housing projects to line their own pockets by illegally underpaying workers," Schneiderman said. "Subcontracting out the work on a taxpayer-funded project does not free the general contractor from the obligation to ensure that workers on site are paid their due. Procida will be held accountable for its own violations and for lax oversight of its subcontractor's practices."

Under the terms of the agreement, Procida must pay back wages of $830,000 based on the violations by the company's subcontractor, $100,000 to its own employees for the Crown Heights project and $50,000 in penalties to the state. Most workers will receive between $10,000 and $30,000, depending on the total number of hours they worked without proper compensation.

The settlement also contains measures to ensure future labor law compliance by Procida, including independent monitoring of its labor practices on public work projects for two years, contracts that include wording about compliance with labor laws as a material term of the contract and the requirement that Procida notify Schneiderman's office of any accepted bids to perform work on projects subject to prevailing wage laws.

Federal and state prevailing wage laws require that government contractors pay benefits and wages that are comparable to the local norms for a particular trade, typically well above the federal and state minimum wage requirement of $7.25 per hour.

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