A New York City construction company has agreed to pay more than $6m to resolve criminal charges that it underpaid nearly 500 welders and ironworkers.
The deal with steel fabricator AGL Industries was announced on Tuesday, 13 August, by Andrew Cuomo, the governor of New York state, as the largest single wage recovery in the 115 year history of the New York Labour Department.Â
Queens-based AGL had been charged with grand larceny after a complaint by the Ironworkers Local 361 union resulted in a prosecution by the Labour Department and the Manhattan District Attorney’s Construction Fraud Task Force.
According to the plea agreement, the company cheated 499 workers out of overtime and other wages between 2013 and 2017, and underreported its payroll to the state labour department.
AGL Industries and its principal, Dominick LoFaso, 41, will pay back the wages over five years, starting with an immediate $1.5m payment. In return, the DA is recommending a conditional discharge for LoFaso.
New York authorities have taken the lead in prosecuting firms that fail to pay their workers. Previously, failure to pay the correct wage was treated as a civil matter, putting the onus on the worker to bring a suit against their employer. But now state prosecutors in New York and California have begun treating the issue as a violation of criminal law.
Diana Florence, an assistant district attorney in Manhattan, said the aim was to stop companies in industries that rely on lots of low paid workers from "institutionalising theft as a business model".
Image: Authorities in Manhattan have taken the lead in prosecuting companies for wage theft (Pixabay)