New York City Comptroller Sued Again For Allegedly Setting Wage Rates Too High

New York Employment Defense │ Wage and Hour │ NYS Supreme Court Decision

The Wall Street Journal reports that the Metropolitan Movers Association (MMA), a moving & storage industry trade organization is suing NYC Comptroller John Liu for the second time in the last year for allegedly discharging his duties improperly in setting the prevailing wage rate for movers who perform work on contracts with the City. In a March 2011 decision, NYS Supreme Court Justice Alice Schlesinger ruled in the first lawsuit, that Mr. Liu “failed to fulfill his responsibility” under the New York Labor Law when his 2010 annual schedule of prevailing wages set rates of $30.63 to $38.90 for workers employed by moving companies on City contracts. Judge Schlesinger found that in setting the abnormally high wage rates, Comptroller Liu essentially disregarded his own office’s survey results which “reveal that workers in the moving industry, on average, receive a much lower wage of $19.19 per hour.” According to the Judge, such a substantial difference inevitably leads to “absurd results,” since workers would receive such staggeringly different pay on private jobs versus City jobs.

In the wake of the decision in the first lawsuit, which is currently being appealed, Mr. Liu has faced criticism from many quarters alleging that his actions in setting such high wage rates are harming City taxpayers, since higher wages cause contractors to increase their bids accordingly and the City winds up footing the bill. Many have also questioned whether Mr. Liu’s close relationships with unions played a role in his decision to set such high rates. Indeed, Judge Schlesinger remarked in her decision that “he simply adopted the rates from [the union local’s] collective bargaining agreement without any further inquiry as to whether these rates accurately reflected the actual prevailing wage.”

Mr. Liu, however, does not appear to have been deterred by the Court’s March ruling against him. Indeed, the MMA, the same trade organization that successfully sued him the first time, has just filed a second lawsuit against Mr. Liu in response to the release of the Comptroller’s 2011 prevailing wage schedule. Although the new wage schedule drastically lowered the rates for lowest-paid or “casual” worker classification, bringing such workers in line with the actual prevailing rates throughout the City, the wage rates for the other worker classifications remains nearly unchanged – still above $35 per hour for assistants and above $37 per hour for drivers. We will continue to monitor developments in the new lawsuit as well as the result of the appeal in the prior case.

For assistance with any prevailing wage issues, including litigation or government investigations, please call our law firm at (718) 275-6700 or email us to arrange a consultation to find out how our attorneys can help you.

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