Effective January 4, 2022, New York amended its Wage Theft Protection Act to enable a subcontractor’s employees to obtain judgment for unpaid wages directly against the general contractor.
What’s the Purpose of New York’s Wage Theft Law?
The new law aims to combat wage theft by making prime contractors (general contractors or construction mangers; whoever reports directly to the owner/developer) jointly and severally liable for NY “wage theft claims” from any employee of any subcontractor at any level. The law applies to private and public work.
What’s the Risk with the Wage Theft Law?
There can be significant penalties for noncompliance. Penalties include: 100% of the total amount of unpaid wages; costs and attorney’s fees; treble damages for willful violations; and prejudgment interest.
How do Contractors control the Risk?
To mitigate the increased risk of NY’s new law General Contractors need to be proactive.
To help avoid issues General Contractors should:
By Jaime Paoletti, Garcia & Milas, P.C.
Jaime Paoletti is an attorney at Garcia & Milas, P.C. who represents contractors, owners, developers, subcontractors, and design professionals. She routinely drafts and negotiates construction contracts to meet the needs of each project and helps her clients navigate key contractual provisions.
This publication is for general information purposes only and is not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader’s specific circumstances.