AG investigation convicts Queens construction companies of ripping off employees

AG investigation convicts Queens construction companies of ripping off employees
Photo by Christina Santucci
By Mark Hallum

State Attorney General Eric Schneiderman announced the conviction of three Queens construction companies after they pleaded guilty to misclassifying employees as independent contractors to avoid paying overtime.

Lotus-C Corporation of Jackson Heights, Johnco Contracting Inc. of Bayside, and RCM Painting Inc. of Maspeth were all convicted of felony counts of grand larceny and falsifying business records in Queens Supreme Court on Feb. 7 and will pay over $730,000 in restitution for missed wages and unpaid taxes.

“Led by pure greed, the defendants in this case attempted to sidestep the law — misclassifying their employees as a way to stiff them on the overtime pay they rightfully earned,” Schneiderman said. “My office will continue to crack down on those who seek to steal from their workers in order to line their own pockets.”

The investigation by the attorney general’s office revealed the defendant corporations failed to properly pay employees — usually carpenters and painters — for overtime by falsely filing them as independent contractors. Over 150 workers were affected and did not receive the time and half pay for working over 40 hours a week required by law.

The companies also under-reported the number of employees they actually had to the state Dept. of Labor during this time, the AG said, and falsified their state Quarterly Combined Withholding, Wage Reporting and Unemployment Insurance Return forms.

“Under Gov. Andrew Cuomo, New York state is committed to exposing bad actors who steal wages from hard-working men and women,” said State Labor Commissioner Roberta Reardon. “Employee misclassification and records falsification are just some of the ways employers skirt their responsibilities to their workers and to the State … I urge any worker who feels they’ve been cheated out of their rightful pay to contact the Department of Labor for assistance.”

As part of the plea deal, the three corporations will be dissolved and Cesar Agudelo of Lotus-C and John Massino of RCM Painting and Johnco will be barred from bidding on public works contracts for up to five years.

About $371,000 will go to the workers as restitution while another $360,000 from the defendants will go to unpaid unemployment insurance contributions.

Schneiderman boasted a record of reclaiming $30 million for over 21,000 construction workers across the state and offered a reminder that employees can file complaints against employers through the AG’s Labor Bureau at 212-416-8700 or visit www.ag.ny.gov/labor/complaint-form.

Reach reporter Mark Hallum by e-mail at mhallum@cnglocal.com or by phone at (718) 260–4564.