Dive Brief:
- New York City has fined New Jersey-based company KS Contracting Corporation $3.2 million for underpaying immigrant workers and has barred the company from ever bidding on state or city projects again, according to CBS New York.
- Comptroller Scott Stringer said the contractor underpaid workers by $1.2 million on prevailing wage projects, reporting that they were earning $50 an hour when they were really earning only $90 a day.
- Stringer alleged that the company would write checks to workers and then make them return the cash for disbursement among other employees, including those being paid under the table.
Dive Insight:
When some contractors try to cook up ways to increase their profit margins on projects, they often turn to employee pay and benefits to create that cushion. Whether it's not paying employee benefits or insurance, skimping on wages, or not paying workers at all, contractors are seeing authorities throw the book at them, resulting in massive fines and even jail time.
Last May, the New York City Comptroller's office also barred Beacon Restoration from taking part in state public works projects for five years after the company allegedly cheated 24 immigrant workers out of accurate wages and benefits. City officials said Beacon also doctored pay records during the Comptroller's investigation so that it would look like the company had paid the proper amounts. Just prior to the Beacon case, New York state prosecutors charged Long Island-based Arbor Concrete Corp. and owner Kenneth Padover with 139 counts of fraud for allegedly bilking employees out of union benefits on a project at John F. Kennedy International Airport.
And earlier this month, the Brooklyn District Attorney's office charged a local contractor with underreporting his company's income to get out of paying $64,000 in workers' compensation premiums to the New York State Insurance Fund. Prosecutors allege that Vasillios Georgiadis reported only $58,000 of company income for the policy period being audited when the company actually brought in more than $628,000. Georgiadis also allegedly failed to maintain coverage for his employees. He now faces up to 15 years in prison.
