NEW YORK (Legal Newsline) -- New York Attorney General Eric Schneiderman said Thursday his office has reached an agreement with a general contractor resolving allegations that it underpaid workers for Hurricane Sandy cleanup work at New York City hospitals.

Public-works contractor Signal Restoration Services and its subcontractors allegedly paid well below the mandated prevailing wage rates or failed to pay overtime to workers performing recovery work at three hospitals owned by the New York City Health and Hospitals Corporation.

Signal was hired to perform cleanup work at the hospitals and brought in subcontractors to help with the work.

While workers should have been paid at least $16.99 per hour for regular hours and $25 to $49 for overtime hours, many workers were allegedly paid just $10 to $12 per hour with no overtime pay.

"Employees who worked long hours to rebuild New York after Hurricane Sandy deserve fair wages and the fullest protection of the labor law," Schneiderman said in a statement. "In this case and many others, my office is taking aggressive action to ensure that workers are paid the wages they've earned.

"Disaster recovery contractors, who play a critical role for our state, should review their legal obligations before the next emergency occurs to ensure that they are not only disaster-ready but also legally compliant."

Under the terms of the agreement, Signal will pay back wages to hundreds of workers totaling $512,026. It also will pay $25,000 in costs to Schneiderman's office and put measures into place to ensure it complies with the law going forward.

Federal and state prevailing wage laws make sure that government contractors pay wages and benefits comparable to local norms for a given trade, often well above the state and federal minimum wage of $7.25 per hour. The law holds general contractors responsible for underpayments by their subcontractors.

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