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General Contractor Responsible for Labor Law Violations of Subcontractors

There’s a major shift in the way the federal government is enforcing labor laws.  The United States Department of Labor isn’t just making sure general contractors follow the law, but those companies have now been put on notice that they’ll be held accountable for the actions of the subcontractors as well.

The Labor Department has announced a settlement with Lettire Construction Corporation and its President and Chief Executive Officer, New York contractor Nicholas Lettire, who are going to have to pay out about $960,000 in back wages and benefits for workers employed by subcontractors.  A lengthy investigation showed that many of those workers were not being paid prevailing wages, overtime they should have received, or benefits.

In a press release from the Department of Labor’s Wage and Hour Division, deputy administrator Nancy J. Leppink said:

“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.”

Effectively that means that the general contractor is responsible for making sure their subcontractors follow the law.

The federal government is able to drop the hammer on this general contractor because the projects in question were receiving federal money.  Two affordable housing projects in New York were among some of the first to receive money from the stimulus program in 2009.

The attorney for Lettire, Allan Bahn, told the New York Times that the company was committed to “doing the right thing”.

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