View OATH decision

-- Integrity lacking in HPD building renovation;
Company debarred from government contracts in the State --

Comptroller William C. Thompson, Jr. today announced that his office debarred Integrity Construction & Consulting Services from doing business with the City and State after it failed to pay seven workers almost $280,000 in prevailing wages and benefits for work they performed on a City of New York Department of Housing Preservation and Development project.

“While most contractors obey prevailing wage laws, there are those who willfully violate the laws and deny workers the wages and benefits they are entitled to receive,” Thompson said. “Integrity Construction violated the law, and now it, and the construction manager responsible for hiring it to perform work on this public works project, must right this wrong.”

As part of its Tenant Interim Lease program, the Department of Housing Preservation and Development (HPD) contracted with Melcara Corporation to serve as construction manager for repairs and renovations at 536-38 West 163rd Street in Manhattan. Melcara hired Integrity Construction to act as general contractor on the project. Integrity Construction, however, failed to pay the workers the legally required wages and benefits for work they performed during October 2003 to July 2004.

After conducting an investigation, the Comptroller’s Bureau of Labor Law commenced a proceeding before the City’s Office of Administrative Trials and Hearings. As a result, an Administrative Law Judge (ALJ) determined that Integrity Construction underpaid four carpenters, two laborers and one bricklayer.

The ALJ found that Integrity Construction falsified its certified payroll reports by understating the number of hours its employees worked and reporting payments for supplemental benefits not made. The two laborers, for example, received only $10 an hour in wages with no benefits and the three carpenters were paid $20 an hour with no benefits, despite the fact that during construction the prevailing wage for laborers was $28.05 an hour and $15.19 an hour in supplemental benefits and for carpenters, $38.78 an hour in wages and $26.31 in benefits.

Integrity Construction further concealed its violation by omitting from its payroll records two laborers who assisted in the demolition and removal of materials and the carrying of supplies. 

In his report to the Comptroller, the ALJ found that Integrity Construction had underpaid workers by a total of $189,633.22, with as much as $47,763.96 due to one carpenter. 

In addition, due to its willful underpayment of workers and submission of false payroll records, Integrity Construction is now ineligible to bid for or receive a government contract in New York State for five years. Additionally, Integrity Construction was assessed a civil penalty of $69,927.05, which represents 25% of the total violation.

Further, since Melcara supervised the construction project and was obliged to ensure that Integrity Construction paid lawful wages, the ALJ found that Melcara is financially liable for the underpayments, interests, and civil penalty assessed against Integrity Construction.

“My office works vigilantly to protect workers’ rights by enforcing prevailing wage laws,” Thompson said. “We will continue to work aggressively to prevent companies from breaking the law and will continue to crack down on lawbreakers when they don’t obey the law.”

The Comptroller enforces New York State laws that require private sector contractors engaged in City public work projects to pay no less than the prevailing wages and supplemental benefits to their employees. The Comptroller also issues prevailing wage schedules, which list the wage rates and supplemental benefits required for the trades and occupations covered under prevailing wage laws.  

Over the last five years, the Bureau of Labor Law has resolved 745 prevailing and living wage cases, assessed $11,566,394 in underpayments for workers and assessed more than $1,175,422 in fines against contractors. Since taking office, Thompson also has debarred 20 contractors from doing business with the City because of labor law violations.

You can view the court decision at www.comptroller.nyc.gov.