NEW YORK — A New York construction contractor, MDG Design & Construction LLC, has agreed to pay a total of $5 million to construction workers and other laborers. This payment is part of a settlement agreement related to numerous wage violations found during a federal investigation into the construction company’s subcontractors. If these violations are found again, it could result in MDG and its subcontractors’ debarment from future federal contracting projects.
The Settlement
The construction workers and laborers were working on New York City’s Grand Street Guild project, refurbishing three 26-story apartment complexes. The rehabilitation project receives federal assistance. One of the conditions of federal support for these construction projects is that contractors ensure their subcontractors follow all applicable state and federal wage laws. Federal investigators found MDG’s subcontractors violated federal labor laws in failing to pay prevailing wages and failing to record and keep accurate payroll records.
The improper record keeping and substandard wages presumably prevented the employees from receiving credit and payment they were entitled to for all of the hours they worked, including overtime. The construction workers employed through MDG’s subcontractors will receive $3.8 million, while the other laborers MDG employed will receive $1.1 million. The settlement amount covers the employees back wages and lost benefits.
In addition to the financial payout, MDG’s settlement states the company will take additional steps to safeguard against future subcontractor wage violations. And the company will be monitored for three years to ensure compliance with all local, state, and federal wage laws. MDG will also receive and provide additional training for its staff on issues related to prevailing wages. The company will also create a hotline for confidential reporting of violations. These additional conditions are typical for federal wage violation settlements.
Prevailing Wage
The Davis-Bacon and Related Acts (DBRA) is a federal law requiring public works projects receiving federal funds to include provisions for prevailing wages. A prevailing wage becomes the minimum wage for the project. The Wage and Hours Division of the U.S. Department of Labor surveys construction projects based on geographic area, type of construction project, and the various classifications of employees. The information from the survey is used to create a “general wage determination” that includes both the minimum hourly wages and fringe benefits construction project employers should pay their employees.
If you are part of a federal public works construction project and believe your employer is not paying prevailing wages or proper overtime, contact our experienced team of overtime pay lawyers today at (855) 754-2795 to discuss your situation. Or complete the Free Unpaid Overtime Case Review form and our knowledgeable legal team will evaluate your case. If we accept your case, we will represent you under our No Fee Promise. This means there are no legal fees or costs unless you receive a settlement.