NY Lab L § 235 (2021)
2021 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.