Photo Courtesy of the AG’s Office
Schneiderman said the defendants in the case were inspired by “pure greed.”
By Forum Staff
Three borough-based construction companies recently pleaded guilty to misclassifying more than 150 workers—including carpenters and painters—as independent contractors to avoid paying them overtime, according to State Attorney General Eric Schneiderman.
Lotus-C Corporation of Jackson Heights; Johnco Contracting, Inc., of Bayside; and RCM Painting Inc., operating out of Maspeth, each pleaded guilty to felony counts of fourth-degree grand larceny and first-degree falsifying business records. According to Schneiderman, the plea agreements mandated that the corporations pay a total of $371,447.01 for unpaid wages and $359,747.86 in unpaid unemployment contributions to the State Department of Labor. Queens Supreme Court sentenced each corporation to a conditional discharge, as full restitution has been made to the attorney general’s office.
According to Schneiderman, between 2012 and 2017, the corporations repeatedly failed to pay proper overtime wages to more than 150 total employees. Many of these workers, who were laborers, worked well over 40 hours in one week, but were only paid a standard time hourly wage, instead of the required time-and-one-half rate for hours worked over 40 hours in one week.
In furtherance of their scheme, each corporation had the employees sign a form stating that they were independent contractors, even though the workers were employees as defined by State labor law. The companies underreported the number of employees working at these corporations during this period to the State DOL, and instead falsified their State Quarterly Combined Withholding, Wage Reporting and Unemployment Insurance Return forms—resulting in significant underpayment of unemployment contributions to the DOL.
“Employee misclassification and records falsification are just some of the ways employers skirt their responsibilities to their workers and to the State,” said State Labor Commissioner Roberta Reardon. “I thank the dedicated Department of Labor investigators and our partners in law enforcement who work every day to ensure that this misconduct doesn’t go unpunished. I urge any worker who feels they’ve been cheated out of their rightful pay to contact the Department of Labor for assistance.”
Schniederman also noted that, as part of the plea agreements, the corporations will dissolve the businesses, and the principals of the corporations, Cesar Agudelo of Lotus-C Corp., and John Massino of RCM Painting Inc. and Johnco Contracting, Inc., will be barred for five years from bidding on public works contracts in New York.
“Led b
y 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,” the AG added.
