The Cost For Wage Theft Just Went Up
New York Governor Kathy Hochul holds the newly signed the Wage Theft Accountability Act which increases the penalties against businesses caught stealing wages from their employees, along with additional worker protections. With her are Mario Cilento, President of the New York State AFL-CIO, Vincent Alvarez, President of the New York City Central Labor Council AFL-CIO, and the bill sponsors, Bronx Assembly member Latoya Joyner, NY State Sen. Jessica Ramos, and Queens Assembly member Catalina Cruz.
New York has taken a groundbreaking step forward in its fight against wage theft, a deplorable practice rampant in the non-union construction sector. Legislation S2832-A/A154-A (The Wage Theft Accountability Act), part of a larger legislative package signed into law by Governor Kathy Hochul last week, will bring about stricter penalties for employers who fail to justly compensate their workers. Onlookers in the unionized construction industry, who have long advocated for adding teeth to New York’s wage theft laws, applaud it as a step towards leveling the project bidding playing field.
Effective immediately, the state's penal code has been revised to define wage theft as a form of larceny, ushering in harsher consequences against perpetrators. This legal paradigm shift dovetails with actions taken by Manhattan District Attorney Alvin J. Bragg earlier this year, when he partnered with the New York State Department of Labor to establish the Worker Protection Unit. This dedicated group zeroes in on employers guilty of wage theft, with a special focus on industries notorious for such violations, like the non-union construction sector.
The implications of equating wage theft with larceny are immense. The only recourse previously available to wage theft victims was to initiate (prohibitively costly) lawsuits or report violations to the Department of Labor. However, the consequences to offending employers often amounted to a slap on the wrist and a small fine — penalties they happily write off as a cost of doing business. With this new legislation, prosecutors now have the authority to press felony criminal charges against unscrupulous employers, which include the possibility of prison time (4 - 25 years). The hope is that stiffer penalties will finally make stealing from workers more trouble than it is worth for fat cat construction bosses.
"I don’t know any [contractors] who are willing to factor jail time into [their wage theft] equation. That’s not an acceptable price for getting caught skimming.”
— Construction company estimator
One construction estimator told Union-Built Matters, “I know some contractors might factor in the cost of financial penalties as part of their profit/loss consideration when they’re thinking about something like wage theft. But I don’t know any of them who are willing to factor jail time into that equation. That’s not an acceptable price for getting caught skimming.”
In a press release on Governor Hochul’s website, Attorney General Letitia James hailed the new laws, spotlighting the protection it will bring to immigrants exploited by nefarious construction bosses. Assemblymember Catalina Cruz laid it bare: wage theft takes a staggering $3.2 billion from 2 million New Yorkers every year. She implied that The Wage Theft Accountability Act isn't just a law; it's a warning to shady employers that New York won't stand for theft. State Senator Jessica Ramos praised the courageous workers who fought for this legislation, citing their refusal to be intimidated by powerful interests. Gary LaBarbera, chief of the NY Building & Construction Trades Council, sees the legislation as a game-changer for the construction industry, and an example of how the building trades continue to fight for the rights of union and non-union workers alike.
With sharper legal tools, New York is ready to strike at the wage thieves draining billions from hard working residents. Union construction is already more cost-effective than non-union construction, despite all of the corner-cutting and illegal practices that take place on non-union job sites. With the passage of this bill, we can expect that cost gap to grow, as the vast majority of wage theft occurs on non-union projects. The choice should be a no-brainer for real estate shoppers, contractors and developers alike: choose union-built.
Mark Colangelo is a writer and blogger.
Get Our Monthly Newsletter
Stay up to date on what's happening in New York construction. Our news comes from major media publishers, real estate and construction trade insiders, and the people involved in the industry every day. And it's free.