US Department of Labor resolves action holding Lettire Construction Corp. responsible for labor violations

Landmark enhanced compliance measures also secured covering company and its subcontractors on federal prevailing wage construction projects

NEW YORK — The U.S. Department of Labor sent a strong message today that it will seek to hold general contractors responsible not only for their own violations of federal labor law, but also for those committed by their subcontractors, when it filed consent findings and an order against Lettire Construction Corp. The consent findings and order were filed today with the department's Office of Administrative Law Judges against Lettire Construction Corp., an industry leader in affordable housing construction, and its president, Nicholas Lettire, a New York general contractor.

The filing follows a project-based investigation conducted by the department's Wage and Hour Division that found Lettire Construction and 16 of its subcontractors had violated provisions of the federal Davis-Bacon and Related Acts as well as the Contract Work Hours and Safety Standards Act. The consent findings and order must be approved by the chief administrative law judge.

This filing resolves an action brought by the department against Lettire Construction and its president claiming that the company and its subcontractors had committed numerous violations of federal law while constructing Hobbs Court and Ciena, two federally funded affordable housing developments in East Harlem, N.Y.

"The settlement makes absolutely clear that responsibility for complying with the federal prevailing wage laws rests with Lettire Construction and Nicholas Lettire, and the agreement requires them to take those actions that any 'high road' contractor should be taking to ensure its compliance and the compliance of its subcontractors with federal law on federal taxpayer funded projects," said Nancy J. Leppink, deputy administrator of the Wage and Hour Division. "If Lettire Construction and Mr. Lettire fail to comply with the full terms of the agreement, there should be no doubt that the Wage and Hour Division will take action seeking to prohibit the company from bidding on future federal taxpayer funded projects. This action will help ensure that local prevailing wages and working conditions are not undercut by contractors who violate the law, and employers who play by the rules can compete on a level playing field for government contracts."

Solicitor of Labor M. Patricia Smith added, "This action should serve as a warning to other contractors that the department's Wage and Hour Division has many enforcement tools available, including surveillance of workers moving on and off project sites, withholding of contract funds, litigation and debarment, to hold all parties from the top of the contract chain to the bottom accountable for compliance with the law."

The Hobbs and Ciena projects were part of the Metro North Rehabilitation and Redevelopment Program, which was funded in part by the U.S. Department of Housing and Urban Development under the American Recovery and Reinvestment Act of 2009 through the New York State Division of Housing and Community Renewal and the New York City Department of Housing Preservation and Development.

The Wage and Hour Division's project-based investigation, which included several days of surveillance, found numerous violations of the DBRA and CWHSSA by Lettire Construction and 16 of its subcontractors. The investigation found some employees working more than 60 hours per week without proper payment. Violations included contractors failing to pay required prevailing wages and overtime compensation, providing inaccurate or falsified payroll records to the government, failing to keep accurate records of hours employees worked, failing to pay for all hours employees worked and improperly classifying employees who performed work on the projects, resulting in the underpayment of wages and fringe benefits. To protect the rights of workers on these projects, upon finding these violations, the Wage and Hour Division secured the withholding of project funds sufficient to pay the back wages owed.

The settlement agreement calls for Lettire Construction to take affirmative steps to ensure its own and its subcontractors' future compliance, to guarantee payment for some of its subcontractors' violations as determined through administrative and court proceedings, and to guarantee payment for any future violations committed by its subcontractors on federally funded local, state and federal prevailing wage projects. Lettire Construction has agreed to hire a monitor approved by the Wage and Hour Division for at least three years to conduct regular compliance reviews of the company and its subcontractors on Davis-Bacon and other federally funded projects with the terms of the consent findings and order, as well as applicable federal and state laws. The monitor will provide training to Lettire Construction's staff and to its subcontractors, and will set up a hotline to collect confidential reports of noncompliance. The monitor will regularly report to the Wage and Hour Division the findings of all reviews, conduct reviews at the request of the division and provide notice to the division of all complaints received from workers on the hotline. Lettire Construction will be required to make corrections in response to the monitor's findings.

Under the consent findings and order, Lettire Construction will be required to investigate prospective subcontractors. This requirement includes assessing subcontractors' bids on federal prevailing wage projects to determine whether they are adequate to ensure financial compliance with the law and taking this information into consideration when selecting subcontractors. The company must establish internal controls, including an electronic timekeeping system and electronic certified payrolls, to ensure accuracy and timeliness of certified payroll submissions, and will assign dedicated supervisors to oversee compliance on prevailing wage projects. In addition, the order will require Lettire Construction and its subcontractors to provide employees notice of their job classifications, wage and fringe benefit rates, and the hotline number. The notice also must advise workers of their rights to file a complaint without retaliation.

The Wage and Hour Division resolved matters involving 14 of Lettire Construction's subcontractors on the Hobbs and Ciena projects that included the payment of $142,345 in DBRA back wages and fringe benefits to 85 mechanics and laborers.

The division also has obtained debarments for a period of three years of three of Lettire Construction's subcontractors on the projects: Fairmont Industries, Sant-Tec Electric and Finest Security Service. A case against Lettire Construction subcontractors Enviro & Demo Masters Inc. and Gladiators Contracting Corp. and their principals, which seeks debarment and approximately $815,638 in additional DBRA back wages and fringe benefits for 40 mechanics and laborers, has been tried and is currently pending before an administrative law judge.

The Davis-Bacon Act requires all contractors and subcontractors performing work on federal and certain federally funded projects to pay their laborers and mechanics the proper prevailing wage rates and fringe benefits as determined by the secretary of labor. The Contract Work Hours and Safety Standards Act applies to contractors and subcontractors with federal service contracts and federally funded and assisted construction contracts exceeding $100,000.

For more information on the DBRA, CWHSSA and other federal wage laws, contact the Wage and Hour Division's New York City District Office at 212-264-8185 or its toll-free helpline at 866-4US-WAGE (487-9243). Information also is available at http://www.dol.gov/whd/.