Dive Brief:

• The potential fine for criminally negligent contractors in New York state got a lot higher last month. Carlos’ Law, signed by New York Gov. Kathy Hochul in late December, increases the penalty by 50 times (at a minimum) the judge can levy on an employer as a result of a worker's death or injury. 
• The $10,000 fine for a felony has increased to a minimum of $500,000 and a maximum of $1 million, and the $5,000 fine for a misdemeanor has increased to a minimum of $300,000 and a maximum of $500,000. The legislation also expands the definition of employees to include subcontractors and day laborers.
• The higher fine should only pose a concern to contractors who are negligent or reckless with worker safety, said attorney Elisa Gilbert, managing partner at The Gilbert Firm in New York City. Those with a strong safety culture likely won’t face criminal charges, and therefore shouldn’t fear the higher penalties, she said.

Dive Insight:

Under the new legislation, a contractor is guilty of criminal corporate liability for the death or injury of a worker when it negligently, recklessly, intentionally or knowingly causes the death or serious physical injury of its employees while they are on the job. The law is named for Carlos Moncayo, a 22-year-old undocumented worker who died in a 2015 trench collapse.

Following the collapse, a police officer with a construction background noticed that the trench had not been properly reinforced. Justice Kirke Bartley Jr. of the State Supreme Court in Manhattan found New York City general contractor Harco Construction guilty of second-degree manslaughter, criminally negligent homicide and reckless endangerment. 

Harco was fined $10,000, which Cyrus R. Vance Jr., then-district attorney, referred to as “Monopoly money.” The low penalty caused an outcry among workers’ advocates groups.

“Construction workers are the engine that keeps our economy moving, and they deserve strong protections under the law," Hochul said in announcing the law. "This legislation will add a new layer of accountability for safety protocols and will establish important protections for the individuals who do this vital, difficult, and often dangerous work.”

What it means for New York contractors

Mike Elmendorf, president and CEO of Associated General Contractors’ New York State chapter, said the employer group shares the goal of the bill, which is “making sure truly bad actors are punished.” 

Nevertheless, Elmendorf said AGC NYS had concerns about the law, to which Hochul was responsive. An agreed-upon amendment will change the wording to apply to an injury of an “employee” rather than “worker,” Elmendorf said. That change will likely broaden the interpretation of the bill, so each employer and subcontractor is responsible for their own employees, as opposed to the liability falling solely on the GC. It will also change the law from cases involving “injury” to those with “serious physical injury.”

Should your average New York contractor be ringing the alarm bells? Not according to Gilbert.

“The impact of this on the average contractor should be no different than the current state of the law,” she said.