ABC
MEMORANDUM OF OPPOSITION
S.4473 Ramos / A.5000 Bronson
S.4473 Ramos / A.5000 Bronson
The Empire State Chapter of Associated Builders and Contractors (“ABC”), representing hundreds of merit-shop construction contractors employing hundreds of thousands of workers across New York State, opposes this bill which would create the
Labor Law Enforcement Parity Act (LLEPA).
The LLEPA would allow liquidated and statutory damage claims for certain wage violations to be filed in New York State Court. This legislation would also allow class action lawsuits for wages and impose an additional 100% penalty, doubling the penalty and extending that calculation to large class action suits, tripling the employers’ exposure from alleged unpaid wages. These changes will effectively mean that an unpaid wage allegation can bankrupt companies with otherwise flawless records.
It will also allow plaintiffs’ attorneys to file class action lawsuits in state and federal court to include a wage theft notice and pay stub penalties to increase the monetary damages recoverable. These proposed changes will lead to a surge in plaintiffs’ attorneys’ lawsuits over wage theft notice and pay stub violations, not actual wage theft. This legislation also allows claims for record-keeping violations to be brought as class action lawsuits. This means a clerical issue like an employer fails to give a proper wage notification form at hiring, or if a pay stub is not compliant (wrong address or phone number), the damages can be up to $5K. These kinds of mistakes happen and are easily fixed, this bill will ensure employers are fined for them instead. While larger companies may be able to afford these fines it will be devastating for smaller contractors across the state; many of them are already struggling with rising material costs and the overall cost of doing construction in the state.
The NYS courts have held that while penalties are appropriate in certain circumstances, they are excessive and destructive when applied in the context of a class action for these types of violations. These cases are easy to allege and win, and extremely attractive for plaintiff’s attorneys attempting to create a new “cash cow” by filing class action lawsuits in State Court. This class action culture is already rampant across the state with things like staged construction accidents, auto insurance fraud and fake workers comp claims. This will be another opportunity for these predatory attorneys to sue first and ask questions later and the smaller contractors will be the most damaged by this.
For the above reasons, ABC strongly opposes this legislation.