NY Wage Theft Law Amended for Contractors and Subcontractors

Greater accountability through the amended law

Effective in January, 2022 the amended NY wage theft law gave workers hired by  subcontractors more legal recourse. It bolstered their ability to recover unpaid wages.

Under the amended wage theft law, they are able to obtain judgements against the general contractor. A general contractor typically has more financial resources than a subcontractor. Furthermore, the law gives general contractors more incentive to directly manage subcontractors and ensure their subcontractors’ compliance with wage laws.

Details of the amended NY Wage Theft Law

Previously, courts did not hold general contractors liable for workers under a subcontractor. This meant freedom from responsibility for unpaid:

• Wages
• Benefits
• Wage supplements

Who can bring legal actions for the above? An employee, a union, another representative on the employee’s behalf or the attorney general can file a claim.

The only exception that could waive this liability is a “collective bargaining agreement with a bona fide building and construction trade labor organization.”

The Contractor’s Protection Under This Law

The contractor has the right to require that the subcontractor fulfill certain duties upon request:

• Providing certified payroll records for all workers on a project
• Names of all the subcontractor’s employees, including any sub-subcontractors or independent contractors
• The name of each sub-subcontractor
• Anticipated contract start date of each sub-subcontractor
• Duration scheduled for each contractor’s work
• Local union names for subcontractors and sub-subcontractors
• Sub-subcontractor addresses and contact information

Failure to comply with the above enables the contractor to withhold payment for wages owed.

Steps contractors should take

With these legal changes, it is vital for contractors to use subcontractors they can rely on, both financially and otherwise. Otherwise, the contractor could end up paying the unpaid wages.

If you’re a contractor, there are legal steps you can take to protect your rights. One step is to ensure all subcontract agreements have provisions requiring indemnification from a subcontractor and sub-subcontractor for statute violations. Otherwise, contractors need a collective bargaining agreement since the law does not enable them to obtain a release or waiver. You should gather all records and information on a monthly basis.

As an employer or contractor, do you have questions or concerns about legal issues?

If you have employment law questions, seek legal help. Discuss your concerns with an attorney at Stephen D. Hans & Associates, P.C. Call (718) 275-6500.