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Three NYC Contractors Ordered to Pay 150 Workers $400K in Owed Overtime

Companies intentionally misclassified 150 workers as independent contractors in scheme to avoid paying overtime wages

February 08, 2018
Three companies pleaded guilty to felony charges in their efforts to defraud workers

The New York State Attorney General's office announced Thursday that Cesar Agudelo of Lotus-C Corporation and John Massino of RCM Painting, Inc. and Johnco Contracting, Inc. and RCM Painting, Inc., all from Queens, New York, have been ordered to pay 150 workers $371,447.01 in owed overtime, then come up with another $359,747.86 in unpaid unemployment contributions to the Department of Labor.

The three companies pleaded guilty to felony charges of grand larceny and falsifying business records in their efforts to defraud the workers from 2012 to 2017.

According to New York Attorney General Eric Schneiderman, the three companies required the workers to sign a form stating they were independent contractors, despite that they were classified as employees as defined by New York labor law. Many of the employees worked more than 40 hours a week but were not paid the required time-and-one-half overtime rate.

The companies also underreported the number of staff on their payrolls, resulting in major underpayment of unemployment contributions to the state.

“Led by 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,” Schneiderman said. “My office will continue to crack down on those who seek to steal from their workers in order to line their own pockets.”

The Queens County Supreme Court sentenced the companies to a conditional discharge, meaning that no punishment has been imposed as long as no other offenses are committed in the future, since restitution was paid to the Attorney General’s office.

Agudelo and Massino have agreed to dissolve their businesses as part of their plea agreement and will be barred from bidding on any public works contracts in New York for five years.

 

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