A bill that would amend the the wage and hour requirements of the New York Labor Law was recently passed by the New York State Legislature and is expected to be signed by Governor Cuomo. Bill Number S2766C (the “Bill”) is intended to protect construction workers against wage theft. However, it places a heavy burden on contractors to police the payroll practices of its downstream subcontractors and exposes them to potentially significant liability for the wage and hour violations of their subcontractors.
The proposed Bill would make a contractor or upstream subcontractor jointly and severally liable for any wages owed to employees of their subcontractors. The Bill allows for a private right of action for such subcontractor’s employee (or such employee’s representative) to bring a civil or administrative action seeking payment of unpaid wages owed pursuant to Section 198 of the New York Labor Law. In such an action against a subcontractor for unpaid wages, the contractor or upstream subcontractor is not only jointly and severally liable for any unpaid wages, but also for the prevailing claimant’s reasonable attorney fees, prejudgment interest, and, absent a good faith defense, liquidated damages equal to the amount of the wages owed.