NY Lab L § 220-B (2021)
2021 New York Laws LAB - Labor Article 8 - Public Work 220-B - Amounts Due for Wages and Supplements May Be Withheld for Benefit of Laborers.

§  220-b.  Amounts  due  for wages and supplements may be withheld for benefit of laborers.  1.  In  case  any  interested  person  shall  have previously  filed  a  protest in writing objecting to the payment to any contractor or subcontractor to the extent of the amount or  amounts  due or  to  become  due  to him for daily or weekly wages or supplements for labor performed on the public improvement for which  such  contract  was entered into, or if for any other reason it may be deemed advisable, the comptroller  of  the  state  or  the  financial officer of the municipal corporation or other officer or person  charged  with  the  custody  and disbursement  of the state or corporate funds applicable to the contract for such public improvement may deduct from  the  whole  amount  of  any payment on account thereof the sum or sums admitted by any contractor or subcontractor  in  such  statement  or statements so filed to be due and owing by him on account of labor performed on  such  public  improvement before  making  payment  of  the  amount  certified  for  payment in any estimate or voucher, and may withhold the amount  so  deducted  for  the benefit of the laborers, workmen or mechanics whose wages or supplements are unpaid or not provided, as the case may be, as shown by the verified statements  filed  by  any  contractor  or  subcontractor,  and  may pay directly to any person the amount or amounts shown to be due to  him  or his  duly  authorized  collective  bargaining labor organization, as the case may be, for such wages or supplements by the  statements  filed  as hereinbefore   required,  thereby  discharging  the  obligation  of  the contractor or  subcontractor  to  the  person  or  his  duly  authorized collective  bargaining  labor organization receiving such payment to the extent of the amount thereof, or   2. a. (1) When any interested person shall file  a  written  complaint with  the  fiscal  officer,  as herein defined, alleging unpaid wages or supplements due for labor performed on a public improvement for which  a contract  has  been entered into, and said labor is alleged to have been performed within the two-year period immediately preceding the  date  of the  filing  of  said  complaint,  or  if,  on  the fiscal officer's own initiative, unpaid wages or supplements appear to  be  due,  the  fiscal officer  shall  immediately so notify the financial officer of the civil division interested, or, if there are insufficient moneys still  due  to the  contractor  or subcontractor to satisfy said wages and supplements, including interest and penalty, the financial officer of  another  civil division  which  has  entered  or  subsequently  enters  into  a  public improvement contract with the contractor  or  subcontractor,  who  shall withhold  from any payment due or earned the contractor or subcontractor executing any public improvements, sufficient  moneys  to  satisfy  said wages  and  supplements, including interest at the rate provided herein, and any civil penalty that may be assessed as provided herein, pending a final determination. The financial officer shall immediately confirm  in writing to the fiscal officer the amount of money withheld.  (2)  If  there  are  still  insufficient  moneys  due or earned to the contractor or subcontractor, as a result of work performed,  to  satisfy such  wages  and  supplements,  including  interest  and  penalties, the financial officer shall immediately notify the fiscal officer,  who  may issue a notice of intent to withhold any of the following:  (i)  any  substantially-owned  affiliated  entity  or any successor or subsidiary 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.  (3)  The  notice  of  intent to withhold 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 satisfy unpaid wages and supplements,  including  interest  at the  rate  provided  in  this article, and any civil penalty that may be assessed as provided in this article, from any payment due or earned the notified party under  any  public  improvement  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  top  five  shareholder  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  top  five  shareholder,  any officer of the contractor or subcontractor who knowingly participated in the  violation  of  this  article,  or  a substantially-owned affiliated entity, or successor, the fiscal  officer  may  instruct  the  financial officer  to  withhold  sufficient  moneys  to  satisfy  said  wages  and supplements, including interest at the rate provided  in  this  article, and  any  civil penalty that may be assessed as provided in this article from any payment due the notified party  under  any  public  improvement contract pending the final determination.  (4)  The  financial  officer shall immediately implement the notice of withholding and confirm in writing to the fiscal officer the  amount  of money  to  be  withheld.  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 top five shareholder, an officer of the contractor or subcontractor who knowingly participated in the violation of this article, or a  substantially-owned affiliated  entity  or  successor,  the fiscal officer shall immediately notify the financial officer to release all payments being withheld from the notified party and the financial officer shall implement the notice.   b. Moneys withheld pursuant to this  section  shall  be  held  by  the financial  officer  for  the  sole  and exclusive benefit of the workers employed on said public improvement and for payment of any civil penalty that may be assessed as provided herein and shall not be  used  for  any other   purpose  except  upon  court  order.  Any  person,  partnership, association, corporation or  governmental  body  who  files  a  lien  or commences  a  judicial  proceeding  with  respect to any monies withheld pursuant to this section shall notify the fiscal officer in  writing  of the  lien  or  claim  on  or  before  the  date of filing of the lien or commencement of the judicial proceeding. In  any  proceeding  to  obtain moneys  withheld  pursuant  to  this section by any person, partnership, association, corporation or governmental body, the fiscal officer  shall have the right to appear and be heard.   c.  The  fiscal  officer  shall  cause  an investigation to be made to determine whether any amounts  are  due  to  the  laborers,  workmen  or mechanics,  or on their respective behalves, on such public improvement, for labor performed after the  commencement  of  the  three-year  period immediately preceding the filing of the complaint or the commencement of the  investigation  on his own initiative, as the case may be, and shall order a hearing thereon at a time and place to be  specified  and  shall give  notice  thereof,  together  with  a  copy  of such complaint, or a statement of the facts disclosed upon such investigation,  which  notice shall  be  served  personally  or  by  mail  on  all interested persons,  including the person complained against and upon the  financial  officer of  the  civil division interested; such person complained against shall have an opportunity to be heard in respect to the matters complained of, at  the time and place specified in such notice, which time shall be not less than five days from the service of said notice. The fiscal  officer in  such  an  investigation  shall  be deemed to be acting in a judicial capacity and shall have the rights to issue subpoenas, administer  oaths and  examine  witnesses. The enforcement of a subpoena issued under this section shall be regulated by the civil practice  law  and  rules.  Such investigation  and  hearing  shall  be expeditiously conducted, and upon such hearing and investigation, the fiscal officer shall  determine  the issues  raised  thereon  and  shall make and file an order in his office stating such determination and forthwith serve a  copy  of  such  order, either  personally  or by mail, together with notice of filing, upon the financial officer of the civil division interested, and the  parties  to such  proceedings and, if the fiscal officer be the comptroller or other analogous officer of a city, upon the  commissioner.  Such  order  shall direct  payment  of  wages  or  supplements  found  to be due, including interest at 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 date of the underpayment to the  date of the payment.   d.  In addition to directing payment of wages or supplements including interest found to be due, the 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 or any successor or substantially-owned affiliated entity  or  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 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. Upon the fiscal officer's determination  of  the  penalty, 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.   e. Upon the entry and service of such order, the financial officer  of the civil division interested shall pay to the claimant, from the moneys due  to  the  contractor  or  subcontractor,  the amount of the claim as determined by the fiscal officer and the amount of the civil penalty, if any, shall be paid as  provided  herein,  provided  that  no  proceeding pursuant  to  article  seventy-eight of the civil practice law and rules for review of said order is commenced by  any  party  aggrieved  thereby within  thirty  days from the date said order was filed in the office of the fiscal officer. Said proceeding shall be commenced directly  in  the appellate division of the supreme court. Where the fiscal officer is the commissioner,  the  civil  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. In the event that such  a proceeding  for  review  is instituted, moneys sufficient to satisfy the claim and civil penalty shall be set  aside  by  the  financial  officer interested  as  provided  in paragraph b of this subdivision, subject to the order of the court.    f. If the financial officer of the civil division interested fails  to pay  to the claimant the amount of the claim as determined by the fiscal officer within ten days after the expiration of the contractor's time to commence a proceeding for review of the fiscal officer's  order  or,  if such  a  proceeding  has been commenced, within ten days after entry and service of a court order confirming  the  fiscal  officer's  order,  the civil  division  interested  shall  pay  to the claimant interest on the claim at the rate of interest  then  in  effect  as  prescribed  by  the superintendent  of  financial services pursuant to section fourteen-a of the banking law from the date the financial officer was required to  pay the  claim as provided herein to the date of payment; provided, however, this paragraph shall not apply if the failure of the  financial  officer of  the  civil  division  interested  to  pay the amount of the claim is pursuant to court order.   g. 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  shareholders  or successor  or  substantially-owned  affiliated  entity  or  other entity determined to have violated any provision of subdivision five of section two hundred twenty of this article or  this  subdivision;  the  notified party  may  contest  the filing on the basis that it is not a partner or top five shareholder, any officer of the contractor or subcontractor who knowingly participated in the violation of this article, or 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 subject  to the  provision  of  this paragraph, the fiscal officer shall immediately withdraw his filing of the order.   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.   h. 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  that  has  been  assessed,  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.   Provided  that no proceeding for judicial review shall then be pending and the time for initiation of such proceeding shall have  expired,  the commissioner  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 an 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 commissioner 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.   2-a. The fiscal officer shall make an inquiry as to the willfulness of the alleged violation which is the subject of an investigation  pursuant to  subdivision  two  of  this section. In the event a formal hearing is held pursuant to this section, the fiscal officer, upon a review of  the entire   record  and  a  finding  of  credible  evidence,  must  make  a determination, as to the willfulness of such violation.  No  finding  of willfullness  made  pursuant to the provisions of this subdivision shall be dispositive for the purposes of section one hundred ninety-eight-a of this chapter or of the last undesignated paragraph of subdivision  three of section two hundred twenty of this article.   3.  a. When a final determination has been made and such determination is in favor of the complainant, said complainant 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 violating 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.   b. (1) When two final determinations  have  been  rendered  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 officer of the contractor or subcontractor who knowingly participated in the violation of this article,  any  of  the  shareholders  who  own  or control  at  least  ten  per  centum  of  the  outstanding  stock of the contractor or subcontractor or  any  successor  within  any  consecutive six-year   period   determining  that  such  contractor,  subcontractor, successor,  or  any  substantially-owned  affiliated   entity   of   the contractor  or  subcontractor,  any  of  the  partners  or  any  of  the shareholders who  own  or  control  at  least  ten  per  centum  of  the outstanding stock of the contractor or subcontractor, any officer of the contractor  or subcontractor who knowingly participated in the violation of this article has wilfully failed to pay the prevailing rate of  wages or  to provide supplements in accordance with this article, whether such failures were concurrent or consecutive and whether or  not  such  final determinations  concerning  separate  public  work projects are rendered simultaneously,  such  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 shareholders who own or control at least ten per  centum of the outstanding stock 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 work  contract  or  subcontract with the state, any municipal corporation or public body for a period of five  years from the second final determination, provided, however, that where any such final determination involves the falsification of payroll records or  the  kickback  of  wages  or  supplements,  the  contractor, subcontractor,  successor,  or any substantially-owned affiliated entity of the contractor or subcontractor, any partner  if  the  contractor  or subcontractor  is  a  partnership  or any of the shareholders who own or control at least  ten  per  centum  of  the  outstanding  stock  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 work contract with the state, any municipal corporation or  public  body for a period of five years from the first final determination.  (2)  When any person or corporation, or any officer or shareholder who owns or controls at least ten per centum of  the  outstanding  stock  of such  corporation,  has  been  convicted of a felony offense for conduct relating  to  obtaining  or  attempting  to  obtain,  or  performing  or attempting  to  perform  a  public  work  contract  with  the state, any municipal corporation, public benefit corporation or  public  body,  and such felony offense is a violation of:  (i) this chapter; or  (ii)  coercion in the first degree as defined in section 135.65 of the penal law, grand larceny in the fourth  degree  as  defined  in  section 155.30 of the penal law, grand larceny in the third degree as defined in section  155.35  of the penal law, grand larceny in the second degree as defined in section 155.40 of the penal law, grand larceny in  the  first degree  as  defined  in  section 155.42 of the penal law, forgery in the second degree as defined in section 170.10 of the penal law, forgery  in the first degree as defined in section 170.15 of the penal law, criminal possession  of  a  forged  instrument in the second degree as defined in section 170.25 of  the  penal  law,  criminal  possession  of  a  forged instrument in the first degree as defined in section 170.30 of the penal law, criminal possession of forgery devices as defined in section 170.40 of  the  penal  law,  falsifying business records in the first degree as defined in section 175.10  of  the  penal  law,  tampering  with  public records  in  the  first degree as defined in section 175.25 of the penal law, offering a false instrument for  filing  in  the  first  degree  as defined  in section 175.35 of the penal law, issuing a false certificate as defined in section 175.40 of the penal law, insurance  fraud  in  the fourth  degree  as defined in section 176.15 of the penal law, insurance fraud in the third degree as defined in section 176.20 of the penal law, insurance fraud in the second degree as defined in section 176.25 of the penal law, insurance fraud in the first degree  as  defined  in  section 176.30  of  the  penal  law,  aggravated  insurance  fraud as defined in section 176.35 of the penal law, commercial bribing in the first  degree as  defined  in  section  180.03  of  the  penal  law,  commercial bribe receiving in the first degree as defined in section 180.08 of the  penal law,  bribing a labor official as defined in section 180.15 of the penal law, bribe receiving by a labor official as defined in section 180.25 of the penal law, criminal impersonation in the second degree as defined in section 190.25 of the penal law, criminal  impersonation  in  the  first  degree  as defined in section 190.26 of the penal law, criminal usury in the second degree as  defined  in  section  190.40  of  the  penal  law, criminal  usury  in the first degree as defined in section 190.42 of the penal  law,  scheme to defraud in the first degree as defined in section 190.65 of the penal law, bribery in  the  third  degree  as  defined  in section 200.00 of the penal law, bribery in the second degree as defined in  section  200.03  of  the  penal  law, bribery in the first degree as defined in section 200.04 of the penal law, bribe receiving in the third degree as defined in section 200.10 of the penal law, bribe receiving in the second degree as defined in section 200.11 of the penal  law,  bribe receiving  in the first degree as defined in section 200.12 of the penal law, rewarding official misconduct in the second degree  as  defined  in section  200.20  of  the penal law, rewarding official misconduct in the first degree as defined in section 200.22 of the penal law, bribe giving for public office as defined in section 200.45 of the penal law, or  the attempted commission of any of the offenses set forth in this paragraph, provided that such offense constitutes a felony; or  (iii) criminal solicitation in the second degree as defined in section 100.10  of  the penal law, conspiracy in the fourth degree as defined in section 105.10 of the penal law, conspiracy  in  the  second  degree  as defined  in section 105.15 of the penal law, or criminal facilitation in the second degree as  defined  in  section  115.05  of  the  penal  law, provided  that  such offense is a felony and was committed in connection with  one  or  more  of  the  crimes  listed  in  clause  (ii)  of  this subparagraph; or  (iv) article twenty-two of the general business law; or  (v)  assault  in the second degree as defined in section 120.05 of the penal law, assault in the first degree as defined in section  120.10  of the  penal  law, reckless endangerment in the first degree as defined in section 120.25 of  the  penal  law,  criminally  negligent  homicide  as defined  in  section 125.10 of the penal law, manslaughter in the second degree as defined in section 125.15 of the penal  law,  manslaughter  in the  first  degree  as  defined  in  section 125.20 of the penal law and murder in the second degree as defined in section 125.25  of  the  penal law,  provided  that  the  victim  was  an  employee  of  such person or corporation and further provided that such offense arose from actions or matters related to the protection of the health or safety  of  employees at a work site; such  person  shall  be  ineligible to submit a bid on or be awarded any public works contract with the state, any municipal corporation,  public benefit  corporation  or public body for a period of five years from the date of conviction.   * (3)(i) When any contractor, subcontractor, or person  is  listed  by the  federal government as excluded from receiving federal contracts and certain subcontracts, assistance or  benefits,  pursuant  to  48  C.F.R. Subpart   9-4,  such  contractor,  subcontractor,  or  person  shall  be ineligible to submit a bid on or be awarded  any  public  work  contract with the state, any municipal corporation, public benefit corporation or public  body  during  such  period  of  exclusion, unless the department having jurisdiction determines, after public notice  and  comment,  that there  is  a  compelling  reason,  consistent with 48 C.F.R. § 9.405, to allow such contractor, subcontractor, or person to submit a bid or to be awarded a particular public work contract. Public notice  shall  include notice  provided  to the department, which shall post such notice on its website.  (ii)  When  the  fiscal  officer   determines   that   a   contractor, subcontractor or person is a "substantially owned-affiliated entity," as defined by paragraph g of subdivision five of section two hundred twenty  of  this  article, in relation to a contractor, subcontractor, or person ineligible to submit a bid or be awarded a public  work  contract  under clause  (i)  of  this  subparagraph, such substantially owned-affiliated entity shall be ineligible to submit a bid or be awarded any public work contract  with  the  state,  any  municipal  corporation, public benefit corporation for the duration of the remaining period of exclusion of the contractor,  subcontractor,  or  person  under  clause   (i)   of   this subparagraph. In order for a substantially owned-affiliated entity to be debarred  pursuant  to  this clause, such substantially owned-affiliated entity  must  have  had  substantial  involvement  in  the  day  to  day management  of  the  contractor,  subcontractor or person debarred under clause (i) of this  subparagraph.  Such  substantially  owned-affiliated entity  shall be provided with written notice from the fiscal officer of the proposed determination and shall be afforded an  opportunity  to  be heard  regarding  the  ineligible  determination  by  the fiscal officer within thirty calendar days of the  written  notice.  In  addition,  the department  having  jurisdiction  may determine, after public notice and comment, that there is a compelling reason, consistent with 48 C.F.R.  § 9.405,  to  allow such substantially owned-affiliated entity to submit a bid or to be awarded a particular public work  contract.  Public  notice shall  include  notice provided to the department, which shall post such notice on its website.  (iii) Any determinations made pursuant to this subparagraph  shall  be subject  to  review  pursuant  to  article  seventy-eight  of  the civil practice law and rules.   * NB Repealed March 18, 2024   c. Nothing in this subdivision shall be  construed  as  affecting  any provision  of  any  other  law or regulation relating to the awarding of public contracts except that the ineligibility for submission of any bid or receipt of any award of public work set forth in this  chapter  shall not  be  subject to any mitigation or judicial abatement, including, but not limited to, the provisions of article twenty-three of the correction law, and such ineligibility shall continue in full force and effect  for the entire period set forth above.