A.G. Schneiderman Announces General Contractor To Pay More Than $500k To Workers For Hurricane Sandy Cleanup Work At New York City Hospitals

General Contractor Signal Restoration Services To Compensate Hundreds Of Workers Who Were Underpaid While Performing Post-Hurricane Sandy Recovery Work At Three Hospitals Owned By NYC Health And Hospitals Corporation

NEW YORK - Attorney General Eric T. Schneiderman today announced the resolution of an investigation into the labor practices of public-works contractor Signal Restoration Services for underpayments made by subcontractors during the cleanup and reconstruction of three HHC hospitals following Hurricane Sandy. The Attorney General's agreement requires Signal to pay back wages to hundreds of workers totaling $512,026 based on violations by their subcontractors, who paid well below the mandated prevailing wage rates and some of whom failed to pay overtime. The company will also pay $25,000 in costs to the Attorney General's Office.

"Employees who worked long hours to rebuild New York after Hurricane Sandy deserve fair wages and the fullest protection of the labor law," Attorney General Schneiderman said. "In this case and many others, my office is taking aggressive action to ensure that workers are paid the wages they've earned. Disaster recovery contractors, who play a critical role for our state, should review their legal obligations before the next emergency occurs to ensure that they are not only disaster-ready but also legally compliant."

In November 2012, Hurricane Sandy caused significant damage to Bellevue Hospital Center, Coney Island Hospital, and Coler-Goldwater Memorial Hospital. Signal was hired to perform cleanup work at the hospitals and in turn brought in subcontractors, some of whom hired additional subcontractors, to assist in the work. Workers on these projects should have been paid prevailing wage rates of at least $16.99 for regular hours and $25 to $49 for overtime hours, but many were paid just $10 to $12 per hour, with no overtime pay despite working long shifts - sometimes through the night - that far exceeded 40 hours per week.

New York City Comptroller John C. Liu said, "The aftermath of Superstorm Sandy was a time when the vast majority of New Yorkers showed their strength by leaning on one another for support and working together to rebuild. Sadly, there were some who attempted to use the crisis to their advantage in hopes of turning a quick buck. Thanks to our Bureau of Labor Law and the Attorney General's office, they were stopped cold. This half-million dollar settlement sends a loud and clear message to contractors seeking to do work with the City that our office will uphold local wage standards. We will not tolerate prevailing wage violations in any form."

Robert Bonanza, Business Manager of the Mason Tenders District Council of Greater New York, said, "The action taken today by Attorney General Schneiderman, and his office, once again sends a clear message to anyone who wants to do public construction work in New York State - play by the rules, don't break the laws and don't exploit your workers. Otherwise you will face the consequences. Exploiting workers is always wrong, but doing so during a natural disaster like Hurricane Sandy is especially offensive. Honest, hardworking New Yorkers have a true ally in Attorney General Schneiderman."

Deborah Axt, Co-Executive Director for Make the Road New York, said, "We applaud Attorney General Schneiderman for investigating and prosecuting businesses that victimize our communities and fail to pay their workers the wages required by law. We especially need increased oversight during the rebuilding efforts post-Sandy. Make the Road New York will continue to partner with the Attorney General's Office to fight wage theft in New York State."

Federal and state prevailing wage laws seek to ensure that government contractors pay wages and benefits that are comparable to the local norms for a given trade, typically well above the state and federal minimum wage of $7.25 per hour. They also hold general contractors responsible for underpayments by their subcontractors. The settlement contains measures to ensure that Signal and its subcontractors will comply with the law in the future.

The Attorney General thanked the Office of the New York City Comptroller for assisting in the investigation. The Attorney General also thanked the advocacy group Make the Road New York and Mason Tenders District Council of Greater New York for playing a part in bringing the case to the Attorney General's attention.

In another post-Hurricane Sandy labor case, last month, the Attorney General announced a settlement for $65,000 with Instar, a contractor whose subcontractors underpaid workers in cleanup work at several large box stores in New York City and Nassau County.

The investigation of Signal was conducted by New York Attorney General Investigator Bradford Farrell under the supervision of Supervising Investigator Louis Carter, Supervising Investigator Kenneth Morgan, and Deputy Chief Vito Spano.

The case was handled by Assistant Attorney General Benjamin Holt, under the supervision of Labor Bureau Section Chief Andrew Elmore, Bureau Chief Terri Gerstein, Executive Deputy Attorney for Social Justice Alvin Bragg and First Deputy of Affirmative Litigation Janet Sabel.

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