2019 New York Laws
LAB - Labor
Article 9 - Prevailing Wage for Building Service Employees
235 - Investigation and Hearing.

§  235.  Investigation and hearing. 1. Whenever the fiscal officer has
reason to believe that a service employee has been paid  less  than  the
wages  stipulated  in  the  contract,  or  if  such contract has no wage
schedule attached thereto and the fiscal officer has reason  to  believe
that a service employee has been paid less than the wages prevailing for
his craft, trade or occupation, the fiscal officer may, and upon receipt
of  a written complaint from an employee employed thereon, shall conduct
a special investigation to determine the facts relating thereto.
  2. a. At the start of such investigation the fiscal officer may notify
the financial officer of the public agency interested who shall, at  the
direction of the fiscal officer, forthwith withhold from any payment due
to  the  contractor executing the contract sufficient money to safeguard
the rights of the service employees and to cover the civil penalty  that
may be assessed as provided herein, or, if there are insufficient moneys
still  due or earned to the contractor or subcontractor to safeguard the
rights of the service employees and to cover the civil penalty that  may
be  assessed  as provided herein, the financial officer of another civil
division which has  entered  or  subsequently  enters  into  a  building
service  work  contract  with the contractor or subcontractor, who shall
withhold from any payment due the contractor or subcontractor  executing
any  building service work, sufficient moneys to safeguard the rights of
the service employees and  to  cover  the  civil  penalty  that  may  be
assessed as provided herein.
  b.  If  there are still insufficient moneys still due or earned to the
contractor or subcontractor to  safeguard  the  rights  of  the  service
employees  and  to  cover  the  civil  penalty  that  may be assessed as
provided herein, the financial officer shall immediately so  notify  the
fiscal  officer,  who  may  issue  a notice of withholding to any of the
following: any substantially-owned affiliated  entity  or  successor  or
subsidiary  of  the  contractor  or  subcontractor;  an  officer  of the
contractor or subcontractor who knowingly participated in the  violation
of this article, any of the partners, if the contractor or subcontractor
is  a  partnership,  or  any  of  the  five  largest shareholders of the
contractor or subcontractor, as determined by the fiscal officer.
  c. The notice of withholding shall provide  that  the  fiscal  officer
intends  to  instruct  the  financial  officer,  not  less than ten days
following service of the notice by mail, to withhold  sufficient  moneys
to  safeguard the rights of the service employees and to cover the civil
penalty that may be assessed as provided herein, from  any  payment  due
the  notified  party  under  any  building service work contract pending
final determination. The notice of withholding shall provide that within
thirty days following the date of the notice of withholding the notified
party may, contest the withholding on the basis that the notified  party
is  not  a  partner  or  one  of  the  five  largest shareholders of the
subcontractor  or  contractor,  an  officer   of   the   contractor   or
subcontractor  who  knowingly  participated  in  the  violation  of this
article, a substantially-owned affiliated entity or  successor.  If  the
notified  party  fails  to  contest the notice of withholding, or if the
fiscal officer, after reviewing the information provided by the notified
party in such contest, determines that the notified party is  a  partner
or   one   of  the  five  largest  shareholders,  a  substantially-owned
affiliated entity, an officer of the  contractor  or  subcontractor  who
knowingly participated in the violation of this article, or a successor,
the  fiscal  officer  may  instruct the financial officer to immediately
withhold sufficient moneys  to  safeguard  the  rights  of  the  service
employees  and  to  cover  the  civil  penalty  that  may be assessed as
provided herein from any  payment  due  the  notified  party  under  any
building service work contract pending the final determination.

  d.  The  financial  officer  shall immediately implement the notice of
withholding and confirm in writing to the fiscal officer the  amount  of
money withheld.
  e.  If the notified party contests the withholding after a withholding
has been effected,  and  if  the  fiscal  officer  determines  that  the
notified party is not a partner or one of the five largest shareholders,
a  substantially-owned affiliated entity or successor, an officer of the
contractor or subcontractor who knowingly participated in the  violation
of  this  article  the  fiscal  officer  shall  immediately  notify  the
financial officer to  release  all  payments  being  withheld  from  the
notified party.
  f.  The  money  shall  be  held  in  trust  pending  completion of the
investigation.
  3. If, despite the requirements of law, the contract for  the  service
work  has been awarded without the annexation thereto of the schedule of
wages provided for in this article, the fiscal officer  shall  determine
in  the  proceeding before him the wages prevailing at the time the work
was performed for the crafts, trades or  occupations  of  the  employees
involved.
  4. In an investigation conducted under the provisions of this section,
the  inquiry  of  the  fiscal officer shall not extend to work performed
more than two years prior to: (a) the filing of the  complaint,  or  (b)
the  commencement  of  the  investigation  upon the fiscal officer's own
volition, whichever is earlier in point of time.
  5. a. The investigation and hearing shall be  expeditiously  conducted
and  upon  the completion thereof the fiscal officer shall determine the
issues raised and shall make and file an order  in  his  office  stating
such  determination  and forthwith serve personally or by mail a copy of
such order and determination together with a notice of filing  upon  all
parties  to  the proceeding and upon the financial officer of the public
agency involved.
  b. In addition to directing payment of wages found  to  be  due,  such
order  of  the  fiscal  officer may direct payment of a further sum as a
civil penalty in an amount not  exceeding  twenty-five  percent  of  the
total  amount  found  to be due. In assessing the amount of the penalty,
due consideration shall be given to the size of the employer's business,
the good faith of the  employer,  the  gravity  of  the  violation,  the
history   of   previous   violations   of  the  employer,  successor  or
substantially-owned affiliated entity or any successor of the contractor
or subcontractor, any officer of the  contractor  or  subcontractor  who
knowingly  participated in the violation of this article, and any of the
partners if the contractor or subcontractor is a partnership or  any  of
the  five  largest  shareholders  of the contractor or subcontractor, as
determined by the fiscal officer,  of  such  underpayment  of  wages  or
supplements,  and  any  officer  of  the contractor or subcontractor who
knowingly participated in the violation of this article, and the failure
to comply with recordkeeping or other non-wage requirements.  Where  the
fiscal  officer  is  the  commissioner, the penalty shall be paid to the
commissioner for deposit in the state treasury. Where the fiscal officer
is a city comptroller or other analogous officer, the penalty  shall  be
paid to said officer for deposit in the city treasury.
  c.  If  the  order directs the payment to specified employees of wages
found to be due and unpaid, including interest at a rate not  less  than
six  per  centum per year and not more than the rate of interest then in
effect  as  prescribed  by  the  superintendent  of  financial  services
pursuant  to  section  fourteen-a  of the banking law per annum from the
time such wages should have been paid, the  financial  officer  of  such
public  agency shall, upon the service to him of such order, pay to such

employees from the trust money withheld the amounts  specified  in  such
order  and  shall  pay the civil penalty as provided herein, provided no
review proceeding pursuant to the provisions of article seventy-eight of
the  civil practice law and rules is commenced within thirty days of the
date said order was filed in the office of the fiscal officer.  If  such
review  is  timely  commenced,  the money withheld shall remain in trust
pending final disposition of the review proceeding. In  determining  the
rate  of  interest  to  be imposed the fiscal officer shall consider the
size of the employer's business, the good faith  of  the  employer,  the
gravity  of  the  violation,  the  history of previous violations of the
employer, successor or  substantially-owned  affiliated  entity  or  any
successor  of  the  contractor  or  subcontractor,  any  officer  of the
contractor or subcontractor who knowingly participated in the  violation
of  this  article,  and  any  of  the  partners  if  the  contractor  or
subcontractor is a partnership or any of the five  largest  shareholders
of the contractor or subcontractor, as determined by the fiscal officer,
and   the  failure  to  comply  with  recordkeeping  or  other  non-wage
requirements.
  6. When a final determination has been made and such determination  is
in  favor  of  an  employee, such employee may, in addition to any other
remedy provided by this article, institute an action  in  any  court  of
appropriate jurisdiction against the person or corporation found to have
violated  this article, any substantially-owned affiliated entity or any
successor of  the  contractor  or  subcontractor,  any  officer  of  the
contractor  or subcontractor who knowingly participated in the violation
of  this  article,  and  any  of  the  partners  if  the  contractor  or
subcontractor  is  a partnership or any of the five largest shareholders
of the contractor or subcontractor, as determined by the fiscal officer,
for the recovery of the difference between the  sum,  if  any,  actually
paid  to  him  by the aforesaid financial officer pursuant to said order
and the amount found to be due him as determined  by  said  order.  Such
action  must be commenced within three years from the date of the filing
of said order, or if the said order is reviewed in a proceeding pursuant
to article seventy-eight of the civil practice  law  and  rules,  within
three years after the termination of such review proceeding.
  Provided  that  no  proceeding for judicial review as provided in this
section shall then be pending  and  the  time  for  initiation  of  such
proceeding  shall  have  expired,  the  fiscal officer may file with the
county clerk of the county where the employer resides or has a place  of
business  the order of the fiscal officer containing the amount found to
be due. The filing of such order shall have the full force and effect of
a judgment duly docketed in the office of such clerk. The order  may  be
enforced  by  and  in the name of the fiscal officer in the same manner,
and with like effect, as that prescribed by the civil practice  law  and
rules for the enforcement of a money judgment.
  7.  When, pursuant to the provisions of this section, two final orders
have been entered against a contractor, subcontractor, successor, or any
substantially-owned   affiliated   entity   of   the    contractor    or
subcontractor, any of the partners if the contractor or subcontractor is
a partnership, any of the five largest shareholders of the contractor or
subcontractor,  any  officer  of  the  contractor  or  subcontractor who
knowingly participated in the  violation  of  this  article  within  any
consecutive   six-year   period  determining  that  such  contractor  or
subcontractor  and/or  its  successor,  substantially-owned   affiliated
entity of the contractor or subcontractor, any of the partners or any of
the  five  largest  shareholders of the contractor or subcontractor, any
officer of the contractor or subcontractor who knowingly participated in
the violation of this article has willfully failed to pay the prevailing

wages in accordance with the provisions of this  article,  whether  such
failures  were  concurrent  or consecutive and whether or not such final
determinations concerning separate public building service contracts are
rendered  simultaneously, such contractor, subcontractor, successor, and
if the contractor, subcontractor, successor, or any  substantially-owned
affiliated  entity  of  the  contractor  or  subcontractor,  any  of the
partners if the contractor or subcontractor is a partnership, or any  of
the  five  largest  shareholders of the contractor or subcontractor, any
officer of the contractor or subcontractor who knowingly participated in
the violation of this article, or any successor is  a  corporation,  any
officer  of such corporation who knowingly participated in such failure,
shall be ineligible to submit a bid on or be awarded any public building
service work for a period of five years from  the  date  of  the  second
order,  provided,  however, that where any such final order involves the
falsification  of  payroll  records  or  the  kickback  of  wages,   the
contractor,  subcontractor,  successor,  substantially-owned  affiliated
entity of the contractor or subcontractor, any partner if the contractor
or  subcontractor  is  a  partnership  or  any  of  the   five   largest
shareholders  of  the  contractor  or  subcontractor, any officer of the
contractor or subcontractor who knowingly participated in the  violation
of this article shall be ineligible to submit a bid on or be awarded any
public  building  service  contract  or  subcontract with the state, any
municipal corporation or public body for a period of five years from the
date of the first final order. Nothing  in  this  subdivision  shall  be
construed  as  affecting  any  provision  of any other law or regulation
relating to the awarding of public contracts.
  8. a. When  a  final  determination  has  been  made  in  favor  of  a
complainant  and  the  contractor  or subcontractor found violating this
article has failed to make payment as  required  by  the  order  of  the
fiscal  officer,  and  provided that no relevant proceeding for judicial
review shall then be  pending  and  the  time  for  initiation  of  such
proceeding shall have expired, the fiscal officer may file a copy of the
order  of  the fiscal officer containing the amount found to be due with
the county clerk of the county of residence or place of business of  any
of the following:
  (i)  any substantially-owned affiliated entity or any successor of the
contractor or subcontractor;
  (ii) any of the partners if  the  contractor  or  subcontractor  is  a
partnership or any of the five largest shareholders of the contractor or
subcontractor, as determined by the fiscal officer; or
  (iii)  any  officer  of  the contractor or subcontractor who knowingly
participated in the violation of this article; provided,  however,  that
the  fiscal  officer  shall  within five days of the filing of the order
provide notice thereof  to  the  partner  or  top  five  shareholder  or
successor  or  substantially-owned affiliated entity. The notified party
may contest the filing on the basis that it is not  a  partner  or  five
largest  shareholders, an officer of the contractor or subcontractor who
knowingly participated in the violation of this  article,  successor  or
substantially-owned   affiliated   entity.   If,   after  reviewing  the
information provided by the notified party in support of  such  contest,
the  fiscal officer determines that the notified party is not within the
definitions described  herein,  the  fiscal  officer  shall  immediately
withdraw his filing of the order.
  b.  The filing of such order shall have the full force and effect of a
judgment duly docketed in the office of such clerk.  The  order  may  be
enforced  by  and  in the name of the fiscal officer in the same manner,
and with like effect, as that prescribed by the civil practice  law  and
rules for the enforcement of a money judgment.

  9. When a final determination has been made against a subcontractor in
favor  of  a  complainant  and  the  contractor  has made payment to the
complainant of any wages and interest due the complainant and any  civil
penalty,  and  providing that no relevant proceeding for judicial review
shall  then  be  pending  and the time for initiation of such proceeding
shall have expired, the contractor may file a copy of the order  of  the
fiscal  officer  containing  the  amount found to be due with the county
clerk  of  the  county  of  residence  or  place  of  business  of   the
subcontractor.  The  filing  of such order shall have the full force and
effect of a judgment duly docketed in the  office  of  such  clerk.  The
judgment may be docketed in favor of the contractor who may proceed as a
judgment  creditor  against  the  subcontractor  for the recovery of all
monies paid by the contractor under such order.