§ 220-B — Amounts due for wages and supplements may be withheld for benefit of laborers

§ 220-b. Amounts due for wages and supplements may be withheld for\nbenefit of laborers. 1. In case any interested person shall have\npreviously filed a protest in writing objecting to the payment to any\ncontractor or subcontractor to the extent of the amount or amounts due\nor to become due to him for daily or weekly wages or supplements for\nlabor performed on the public improvement for which such contract was\nentered into, or if for any other reason it may be deemed advisable, the\ncomptroller of the state or the financial officer of the municipal\ncorporation or other officer or person charged with the custody and\ndisbursement of the state or corporate funds applicable to the contract\nfor such public improvement may deduct from the whole amount of any\npayment on account thereof the sum or sums admitted by any contractor or\nsubcontractor in such statement or statements so filed to be due and\nowing by him on account of labor performed on such public improvement\nbefore making payment of the amount certified for payment in any\nestimate or voucher, and may withhold the amount so deducted for the\nbenefit of the laborers, workmen or mechanics whose wages or supplements\nare unpaid or not provided, as the case may be, as shown by the verified\nstatements filed by any contractor or subcontractor, and may pay\ndirectly to any person the amount or amounts shown to be due to him or\nhis duly authorized collective bargaining labor organization, as the\ncase may be, for such wages or supplements by the statements filed as\nhereinbefore required, thereby discharging the obligation of the\ncontractor or subcontractor to the person or his duly authorized\ncollective bargaining labor organization receiving such payment to the\nextent of the amount thereof, or\n 2. a. (1) When any interested person shall file a written complaint\nwith the fiscal officer, as herein defined, alleging unpaid wages or\nsupplements due for labor performed on a public improvement for which a\ncontract has been entered into, and said labor is alleged to have been\nperformed within the two-year period immediately preceding the date of\nthe filing of said complaint, or if, on the fiscal officer's own\ninitiative, unpaid wages or supplements appear to be due, the fiscal\nofficer shall immediately so notify the financial officer of the civil\ndivision interested, or, if there are insufficient moneys still due to\nthe contractor or subcontractor to satisfy said wages and supplements,\nincluding interest and penalty, the financial officer of another civil\ndivision which has entered or subsequently enters into a public\nimprovement contract with the contractor or subcontractor, who shall\nwithhold from any payment due or earned the contractor or subcontractor\nexecuting any public improvements, sufficient moneys to satisfy said\nwages and supplements, including interest at the rate provided herein,\nand any civil penalty that may be assessed as provided herein, pending a\nfinal determination. The financial officer shall immediately confirm in\nwriting to the fiscal officer the amount of money withheld.\n (2) If there are still insufficient moneys due or earned to the\ncontractor or subcontractor, as a result of work performed, to satisfy\nsuch wages and supplements, including interest and penalties, the\nfinancial officer shall immediately notify the fiscal officer, who may\nissue a notice of intent to withhold any of the following:\n (i) any substantially-owned affiliated entity or any successor or\nsubsidiary of the contractor or subcontractor;\n (ii) any of the partners, if the contractor or subcontractor is a\npartnership, or any of the five largest shareholders of the contractor\nor subcontractor, as determined by the fiscal officer; or\n (iii) any officer of the contractor or subcontractor who knowingly\nparticipated in the violation of this article.\n (3) The notice of intent to withhold shall provide that the fiscal\nofficer intends to instruct the financial officer, not less than ten\ndays following service of the notice by mail, to withhold sufficient\nmoneys to satisfy unpaid wages and supplements, including interest at\nthe rate provided in this article, and any civil penalty that may be\nassessed as provided in this article, from any payment due or earned the\nnotified party under any public improvement contract pending final\ndetermination. The notice of withholding shall provide that within\nthirty days following the date of the notice of withholding the notified\nparty may contest the withholding on the basis that the notified party\nis not a partner or top five shareholder of the subcontractor or\ncontractor, an officer of the contractor or subcontractor who knowingly\nparticipated in the violation of this article, a substantially-owned\naffiliated entity, or successor. If the notified party fails to contest\nthe notice of withholding, or if the fiscal officer, after reviewing the\ninformation provided by the notified party in such contest, determines\nthat the notified party is a partner or top five shareholder, any\nofficer of the contractor or subcontractor who knowingly participated in\nthe violation of this article, or a substantially-owned affiliated\nentity, or successor, the fiscal officer may instruct the financial\nofficer to withhold sufficient moneys to satisfy said wages and\nsupplements, including interest at the rate provided in this article,\nand any civil penalty that may be assessed as provided in this article\nfrom any payment due the notified party under any public improvement\ncontract pending the final determination.\n (4) The financial officer shall immediately implement the notice of\nwithholding and confirm in writing to the fiscal officer the amount of\nmoney to be withheld. If the notified party contests the withholding\nafter a withholding has been effected, and if the fiscal officer\ndetermines, that the notified party is not a partner or top five\nshareholder, an officer of the contractor or subcontractor who knowingly\nparticipated in the violation of this article, or a substantially-owned\naffiliated entity or successor, the fiscal officer shall immediately\nnotify the financial officer to release all payments being withheld from\nthe notified party and the financial officer shall implement the notice.\n b. Moneys withheld pursuant to this section shall be held by the\nfinancial officer for the sole and exclusive benefit of the workers\nemployed on said public improvement and for payment of any civil penalty\nthat may be assessed as provided herein and shall not be used for any\nother purpose except upon court order. Any person, partnership,\nassociation, corporation or governmental body who files a lien or\ncommences a judicial proceeding with respect to any monies withheld\npursuant to this section shall notify the fiscal officer in writing of\nthe lien or claim on or before the date of filing of the lien or\ncommencement of the judicial proceeding. In any proceeding to obtain\nmoneys withheld pursuant to this section by any person, partnership,\nassociation, corporation or governmental body, the fiscal officer shall\nhave the right to appear and be heard.\n c. The fiscal officer shall cause an investigation to be made to\ndetermine whether any amounts are due to the laborers, workmen or\nmechanics, or on their respective behalves, on such public improvement,\nfor labor performed after the commencement of the three-year period\nimmediately preceding the filing of the complaint or the commencement of\nthe investigation on his own initiative, as the case may be, and shall\norder a hearing thereon at a time and place to be specified and shall\ngive notice thereof, together with a copy of such complaint, or a\nstatement of the facts disclosed upon such investigation, which notice\nshall be served personally or by mail on all interested persons,\nincluding the person complained against and upon the financial officer\nof the civil division interested; such person complained against shall\nhave an opportunity to be heard in respect to the matters complained of,\nat the time and place specified in such notice, which time shall be not\nless than five days from the service of said notice. The fiscal officer\nin such an investigation shall be deemed to be acting in a judicial\ncapacity and shall have the rights to issue subpoenas, administer oaths\nand examine witnesses. The enforcement of a subpoena issued under this\nsection shall be regulated by the civil practice law and rules. Such\ninvestigation and hearing shall be expeditiously conducted, and upon\nsuch hearing and investigation, the fiscal officer shall determine the\nissues raised thereon and shall make and file an order in his office\nstating such determination and forthwith serve a copy of such order,\neither personally or by mail, together with notice of filing, upon the\nfinancial officer of the civil division interested, and the parties to\nsuch proceedings and, if the fiscal officer be the comptroller or other\nanalogous officer of a city, upon the commissioner. Such order shall\ndirect payment of wages or supplements found to be due, including\ninterest at the rate of interest then in effect as prescribed by the\nsuperintendent of financial services pursuant to section fourteen-a of\nthe banking law per annum from the date of the underpayment to the date\nof the payment.\n d. In addition to directing payment of wages or supplements including\ninterest found to be due, the order of the fiscal officer may direct\npayment of a further sum as a civil penalty in an amount not exceeding\ntwenty-five percent of the total amount found to be due. In assessing\nthe amount of the penalty, due consideration shall be given to the size\nof the employer's business, the good faith of the employer, the gravity\nof the violation, the history of previous violations of the employer or\nany successor or substantially-owned affiliated entity or any of the\npartners if the contractor or subcontractor is a partnership or any of\nthe five largest shareholders of the contractor or subcontractor, as\ndetermined by the fiscal officer, and any officer of the contractor or\nsubcontractor who knowingly participated in the violation of this\narticle, and the failure to comply with recordkeeping or other non-wage\nrequirements. Upon the fiscal officer's determination of the penalty,\nwhere the fiscal officer is the commissioner, the penalty shall be paid\nto the commissioner for deposit in the state treasury. Where the fiscal\nofficer is a city comptroller or other analogous officer, the penalty\nshall be paid to said officer for deposit in the city treasury.\n e. Upon the entry and service of such order, the financial officer of\nthe civil division interested shall pay to the claimant, from the moneys\ndue to the contractor or subcontractor, the amount of the claim as\ndetermined by the fiscal officer and the amount of the civil penalty, if\nany, shall be paid as provided herein, provided that no proceeding\npursuant to article seventy-eight of the civil practice law and rules\nfor review of said order is commenced by any party aggrieved thereby\nwithin thirty days from the date said order was filed in the office of\nthe fiscal officer. Said proceeding shall be commenced directly in the\nappellate division of the supreme court. Where the fiscal officer is the\ncommissioner, the civil penalty shall be paid to the commissioner for\ndeposit in the state treasury; where the fiscal officer is a city\ncomptroller or other analogous officer, the penalty shall be paid to\nsaid officer for deposit in the city treasury. In the event that such a\nproceeding for review is instituted, moneys sufficient to satisfy the\nclaim and civil penalty shall be set aside by the financial officer\ninterested as provided in paragraph b of this subdivision, subject to\nthe order of the court.\n f. If the financial officer of the civil division interested fails to\npay to the claimant the amount of the claim as determined by the fiscal\nofficer within ten days after the expiration of the contractor's time to\ncommence a proceeding for review of the fiscal officer's order or, if\nsuch a proceeding has been commenced, within ten days after entry and\nservice of a court order confirming the fiscal officer's order, the\ncivil division interested shall pay to the claimant interest on the\nclaim at the rate of interest then in effect as prescribed by the\nsuperintendent of financial services pursuant to section fourteen-a of\nthe banking law from the date the financial officer was required to pay\nthe claim as provided herein to the date of payment; provided, however,\nthis paragraph shall not apply if the failure of the financial officer\nof the civil division interested to pay the amount of the claim is\npursuant to court order.\n g. When a final determination has been made in favor of a complainant\nand the contractor or subcontractor found violating this article has\nfailed to make payment as required by the order of the fiscal officer,\nand provided that no relevant proceeding for judicial review shall then\nbe pending and the time for initiation of such proceeding shall have\nexpired, the fiscal officer may file a copy of the order of the fiscal\nofficer containing the amount found to be due with the county clerk of\nthe county of residence or place of business of any of the following:\n (i) any substantially-owned affiliated entity or any successor of the\ncontractor or subcontractor;\n (ii) any of the partners if the contractor or subcontractor is a\npartnership or any of the five largest shareholders of the contractor or\nsubcontractor, as determined by the fiscal officer; or\n (iii) any officer of the contractor or subcontractor who knowingly\nparticipated in the violation of this article; provided, however, that\nthe fiscal officer shall within five days of the filing of the order\nprovide notice thereof to the partner or top five shareholders or\nsuccessor or substantially-owned affiliated entity or other entity\ndetermined to have violated any provision of subdivision five of section\ntwo hundred twenty of this article or this subdivision; the notified\nparty may contest the filing on the basis that it is not a partner or\ntop five shareholder, any officer of the contractor or subcontractor who\nknowingly participated in the violation of this article, or successor or\nsubstantially-owned affiliated entity. If, after reviewing the\ninformation provided by the notified party in support of such contest,\nthe fiscal officer determines that the notified party is not subject to\nthe provision of this paragraph, the fiscal officer shall immediately\nwithdraw his filing of the order.\n The filing of such order shall have the full force and effect of a\njudgment duly docketed in the office of such clerk. The order may be\nenforced by and in the name of the fiscal officer in the same manner,\nand with like effect, as that prescribed by the civil practice law and\nrules for the enforcement of a money judgment.\n h. When a final determination has been made against a subcontractor in\nfavor of a complainant and the contractor has made payment to the\ncomplainant of any wages and interest due the complainant and any civil\npenalty that has been assessed, and providing that no relevant\nproceeding for judicial review shall then be pending and the time for\ninitiation of such proceeding shall have expired, the contractor may\nfile a copy of the order of the fiscal officer containing the amount\nfound to be due with the county clerk of the county of residence or\nplace of business of the subcontractor. The filing of such order shall\nhave the full force and effect of a judgment duly docketed in the office\nof such clerk. The judgment may be docketed in favor of the contractor\nwho may proceed as a judgment creditor against the subcontractor for the\nrecovery of all monies paid by the contractor under such order.\n Provided that no proceeding for judicial review shall then be pending\nand the time for initiation of such proceeding shall have expired, the\ncommissioner may file with the county clerk of the county where the\nemployer resides or has a place of business the order of the fiscal\nofficer containing the amount found to be due. The filing of such an\norder shall have the full force and effect of a judgment duly docketed\nin the office of such clerk. The order may be enforced by and in the\nname of the commissioner in the same manner, and with like effect, as\nthat prescribed by the civil practice law and rules for the enforcement\nof a money judgment.\n 2-a. The fiscal officer shall make an inquiry as to the willfulness of\nthe alleged violation which is the subject of an investigation pursuant\nto subdivision two of this section. In the event a formal hearing is\nheld pursuant to this section, the fiscal officer, upon a review of the\nentire record and a finding of credible evidence, must make a\ndetermination, as to the willfulness of such violation. No finding of\nwillfullness made pursuant to the provisions of this subdivision shall\nbe dispositive for the purposes of section one hundred ninety-eight-a of\nthis chapter or of the last undesignated paragraph of subdivision three\nof section two hundred twenty of this article.\n 3. a. When a final determination has been made and such determination\nis in favor of the complainant, said complainant may in addition to any\nother remedy provided by this article, institute an action in any court\nof appropriate jurisdiction against the person or corporation found\nviolating this article, any substantially-owned affiliated entity or any\nsuccessor of the contractor or subcontractor, any officer of the\ncontractor or subcontractor who knowingly participated in the violation\nof this article, and any of the partners if the contractor or\nsubcontractor is a partnership or any of the five largest shareholders\nof the contractor or subcontractor, as determined by the fiscal officer,\nfor the recovery of the difference between the sum, if any, actually\npaid to him by the aforesaid financial officer pursuant to said order\nand the amount found to be due him as determined by said order. Such\naction must be commenced within three years from the date of the filing\nof said order, or if the said order is reviewed in a proceeding pursuant\nto article seventy-eight of the civil practice law and rules, within\nthree years after the termination of such review proceeding.\n b. (1) When two final determinations have been rendered against a\ncontractor, subcontractor, successor, or any substantially-owned\naffiliated entity of the contractor or subcontractor, any of the\npartners if the contractor or subcontractor is a partnership, any\nofficer of the contractor or subcontractor who knowingly participated in\nthe violation of this article, any of the shareholders who own or\ncontrol at least ten per centum of the outstanding stock of the\ncontractor or subcontractor or any successor within any consecutive\nsix-year period determining that such contractor, subcontractor,\nsuccessor, or any substantially-owned affiliated entity of the\ncontractor or subcontractor, any of the partners or any of the\nshareholders who own or control at least ten per centum of the\noutstanding stock of the contractor or subcontractor, any officer of the\ncontractor or subcontractor who knowingly participated in the violation\nof this article has wilfully failed to pay the prevailing rate of wages\nor to provide supplements in accordance with this article, whether such\nfailures were concurrent or consecutive and whether or not such final\ndeterminations concerning separate public work projects are rendered\nsimultaneously, such contractor, subcontractor, successor, or any\nsubstantially-owned affiliated entity of the contractor or\nsubcontractor, any of the partners if the contractor or subcontractor is\na partnership or any of the shareholders who own or control at least ten\nper centum of the outstanding stock of the contractor or subcontractor,\nany officer of the contractor or subcontractor who knowingly\nparticipated in the violation of this article shall be ineligible to\nsubmit a bid on or be awarded any public work contract or subcontract\nwith the state, any municipal corporation or public body for a period of\nfive years from the second final determination, provided, however, that\nwhere any such final determination involves the falsification of payroll\nrecords or the kickback of wages or supplements, the contractor,\nsubcontractor, successor, or any substantially-owned affiliated entity\nof the contractor or subcontractor, any partner if the contractor or\nsubcontractor is a partnership or any of the shareholders who own or\ncontrol at least ten per centum of the outstanding stock of the\ncontractor or subcontractor, any officer of the contractor or\nsubcontractor who knowingly participated in the violation of this\narticle shall be ineligible to submit a bid on or be awarded any public\nwork contract with the state, any municipal corporation or public body\nfor a period of five years from the first final determination.\n (2) When any person or corporation, or any officer or shareholder who\nowns or controls at least ten per centum of the outstanding stock of\nsuch corporation, has been convicted of a felony offense for conduct\nrelating to obtaining or attempting to obtain, or performing or\nattempting to perform a public work contract with the state, any\nmunicipal corporation, public benefit corporation or public body, and\nsuch felony offense is a violation of:\n (i) this chapter; or\n (ii) coercion in the first degree as defined in section 135.65 of the\npenal law, grand larceny in the fourth degree as defined in section\n155.30 of the penal law, grand larceny in the third degree as defined in\nsection 155.35 of the penal law, grand larceny in the second degree as\ndefined in section 155.40 of the penal law, grand larceny in the first\ndegree as defined in section 155.42 of the penal law, forgery in the\nsecond degree as defined in section 170.10 of the penal law, forgery in\nthe first degree as defined in section 170.15 of the penal law, criminal\npossession of a forged instrument in the second degree as defined in\nsection 170.25 of the penal law, criminal possession of a forged\ninstrument in the first degree as defined in section 170.30 of the penal\nlaw, criminal possession of forgery devices as defined in section 170.40\nof the penal law, falsifying business records in the first degree as\ndefined in section 175.10 of the penal law, tampering with public\nrecords in the first degree as defined in section 175.25 of the penal\nlaw, offering a false instrument for filing in the first degree as\ndefined in section 175.35 of the penal law, issuing a false certificate\nas defined in section 175.40 of the penal law, insurance fraud in the\nfourth degree as defined in section 176.15 of the penal law, insurance\nfraud in the third degree as defined in section 176.20 of the penal law,\ninsurance fraud in the second degree as defined in section 176.25 of the\npenal law, insurance fraud in the first degree as defined in section\n176.30 of the penal law, aggravated insurance fraud as defined in\nsection 176.35 of the penal law, commercial bribing in the first degree\nas defined in section 180.03 of the penal law, commercial bribe\nreceiving in the first degree as defined in section 180.08 of the penal\nlaw, bribing a labor official as defined in section 180.15 of the penal\nlaw, bribe receiving by a labor official as defined in section 180.25 of\nthe penal law, criminal impersonation in the second degree as defined in\nsection 190.25 of the penal law, criminal impersonation in the first\ndegree as defined in section 190.26 of the penal law, criminal usury in\nthe second degree as defined in section 190.40 of the penal law,\ncriminal usury in the first degree as defined in section 190.42 of the\npenal law, scheme to defraud in the first degree as defined in section\n190.65 of the penal law, bribery in the third degree as defined in\nsection 200.00 of the penal law, bribery in the second degree as defined\nin section 200.03 of the penal law, bribery in the first degree as\ndefined in section 200.04 of the penal law, bribe receiving in the third\ndegree as defined in section 200.10 of the penal law, bribe receiving in\nthe second degree as defined in section 200.11 of the penal law, bribe\nreceiving in the first degree as defined in section 200.12 of the penal\nlaw, rewarding official misconduct in the second degree as defined in\nsection 200.20 of the penal law, rewarding official misconduct in the\nfirst degree as defined in section 200.22 of the penal law, bribe giving\nfor public office as defined in section 200.45 of the penal law, or the\nattempted commission of any of the offenses set forth in this paragraph,\nprovided that such offense constitutes a felony; or\n (iii) criminal solicitation in the second degree as defined in section\n100.10 of the penal law, conspiracy in the fourth degree as defined in\nsection 105.10 of the penal law, conspiracy in the second degree as\ndefined in section 105.15 of the penal law, or criminal facilitation in\nthe second degree as defined in section 115.05 of the penal law,\nprovided that such offense is a felony and was committed in connection\nwith one or more of the crimes listed in clause (ii) of this\nsubparagraph; or\n (iv) article twenty-two of the general business law; or\n (v) assault in the second degree as defined in section 120.05 of the\npenal law, assault in the first degree as defined in section 120.10 of\nthe penal law, reckless endangerment in the first degree as defined in\nsection 120.25 of the penal law, criminally negligent homicide as\ndefined in section 125.10 of the penal law, manslaughter in the second\ndegree as defined in section 125.15 of the penal law, manslaughter in\nthe first degree as defined in section 125.20 of the penal law and\nmurder in the second degree as defined in section 125.25 of the penal\nlaw, provided that the victim was an employee of such person or\ncorporation and further provided that such offense arose from actions or\nmatters related to the protection of the health or safety of employees\nat a work site;\nsuch person shall be ineligible to submit a bid on or be awarded any\npublic works contract with the state, any municipal corporation, public\nbenefit corporation or public body for a period of five years from the\ndate of conviction.\n * (3)(i) When any contractor, subcontractor, or person is listed by\nthe federal government as excluded from receiving federal contracts and\ncertain subcontracts, assistance or benefits, pursuant to 48 C.F.R.\nSubpart 9-4, such contractor, subcontractor, or person shall be\nineligible to submit a bid on or be awarded any public work contract\nwith the state, any municipal corporation, public benefit corporation or\npublic body during such period of exclusion, unless the department\nhaving jurisdiction determines, after public notice and comment, that\nthere is a compelling reason, consistent with 48 C.F.R. § 9.405, to\nallow such contractor, subcontractor, or person to submit a bid or to be\nawarded a particular public work contract. Public notice shall include\nnotice provided to the department, which shall post such notice on its\nwebsite.\n (ii) When the fiscal officer determines that a contractor,\nsubcontractor or person is a "substantially owned-affiliated entity," as\ndefined by paragraph g of subdivision five of section two hundred twenty\nof this article, in relation to a contractor, subcontractor, or person\nineligible to submit a bid or be awarded a public work contract under\nclause (i) of this subparagraph, such substantially owned-affiliated\nentity shall be ineligible to submit a bid or be awarded any public work\ncontract with the state, any municipal corporation, public benefit\ncorporation for the duration of the remaining period of exclusion of the\ncontractor, subcontractor, or person under clause (i) of this\nsubparagraph. In order for a substantially owned-affiliated entity to be\ndebarred pursuant to this clause, such substantially owned-affiliated\nentity must have had substantial involvement in the day to day\nmanagement of the contractor, subcontractor or person debarred under\nclause (i) of this subparagraph. Such substantially owned-affiliated\nentity shall be provided with written notice from the fiscal officer of\nthe proposed determination and shall be afforded an opportunity to be\nheard regarding the ineligible determination by the fiscal officer\nwithin thirty calendar days of the written notice. In addition, the\ndepartment having jurisdiction may determine, after public notice and\ncomment, that there is a compelling reason, consistent with 48 C.F.R. §\n9.405, to allow such substantially owned-affiliated entity to submit a\nbid or to be awarded a particular public work contract. Public notice\nshall include notice provided to the department, which shall post such\nnotice on its website.\n (iii) Any determinations made pursuant to this subparagraph shall be\nsubject to review pursuant to article seventy-eight of the civil\npractice law and rules.\n * NB Repealed March 18, 2027\n c. Nothing in this subdivision shall be construed as affecting any\nprovision of any other law or regulation relating to the awarding of\npublic contracts except that the ineligibility for submission of any bid\nor receipt of any award of public work set forth in this chapter shall\nnot be subject to any mitigation or judicial abatement, including, but\nnot limited to, the provisions of article twenty-three of the correction\nlaw, and such ineligibility shall continue in full force and effect for\nthe entire period set forth above.\n