Office of the Comptroller v. Colonial Roofing Company, Inc. OATH Index No. 632/13 (Aug. 22, 2013)*, subsequent settlement (Feb. 5, 2014), appended

In prevailing wage case, contractor alleged to have underpaid workers by failing to pay benefits, paying workers at incorrect rates, and omitting payment for days worked. Administrative law judge found that benefits were unpaid, that some workers were paid the incorrect rate, and that a new audit should be prepared based upon modified guidelines. Judge recommended a 20% civil penalty and that contractor, as well as officers, be barred from bidding on City contracts for five years. ______________________________________________________

NEW YORK CITY OFFICE OF

ADMINISTRATIVE TRIALS AND HEARINGS

In the Matter of OFFICE OF THE COMPTROLLER

Petitioner - against -

COLONIAL ROOFING COMPANY, INC., VEAP SELA, ADRIANA SELA, AND KATHLEEN SELA

Respondents ______________________________________________________

REPORT AND RECOMMENDATION

JOHN B. SPOONER, Administrative Law Judge

This is a prevailing wage proceeding brought by petitioner, the Office of the Comptroller,

pursuant to Section 220(8) of the Labor Law and Title 44, Chapter 2 of the Rules of the City of

New York. Petitioner alleges that respondent Colonial Roofing Company, Inc. willfully failed to

pay prevailing wages and benefits to workers on two contracts: one contract with the Manhattan

and Bronx Surface Transit Operating Authority (“MBSTOA”) for roof repair to an Amsterdam

Avenue bus depot and another contract with the New York City Transit Authority (“NYCTA”)

for repairs to 17 other bus depots. Respondents Veap Sela, Adriana Sela, and Kathleen Sela are

the officers and principal shareholders of Colonial. An answer was filed on October 20, 2012,

denying most of the allegations and asserting various affirmative defenses, including laches and

the statute of limitations.

Prior to the hearing, respondents filed a motion for summary judgment based upon the

passage of time since the investigation was commenced in 2004. On February 19, 2013, this

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tribunal denied this motion. See Office of the Comptroller v. Colonial Roofing Company, Inc.,

OATH Index No. 632/13 (Feb. 19, 2013).

At the hearing held on March 12, 13, 14, 15, and 18, 2013, petitioner presented a large

quantity of records from the projects and testimony from the workers and several Comptroller

employees. Respondents offered records and witnesses disputing petitioner’s analysis as to the

appropriate job classifications and hours worked and showing that some retirement benefits were

paid. Following the hearing, both parties submitted post-hearing memoranda on June 17, 2013.

For the reasons provided below, I find that the workers were not paid benefits as required

and were not paid at the appropriate rate according to the work they performed. I find that, based

upon the hearing evidence, the Comptroller’s audit should be modified and the violations

recalculated. I further find that a penalty of 20% should be assessed and that respondents should

be barred from bidding on City contracts for five years.

FACTUAL BACKGROUND

The background facts concerning the Amsterdam bus depot were provided in the pretrial

motion papers and at the hearing. Pursuant to a bidding process, Colonial submitted a bid of

$989,000 in 2001 for paint removal and repairs to the ceiling of the Amsterdam bus depot (Resp.

Ex. W), which was over 100 years old. Upon commencement of the job in June 2003, it became

clear to both Authority engineers and Colonial that the concrete ceiling had suffered worse water

damage than originally thought. The overall cost of the repair work was increased to $2,020,000

(Resp. Ex. FF). According to the payment certificate (Resp. Ex. FF) and the payroll records (Pet.

Ex. 13), the work on the depot was completed in approximately March or April 2005. Nine

workers, who had been employed as asbestos handlers, laborers, and metal sheet workers, filed

complaints in 2004, 2005, and 2006 with the Comptroller alleging they were not paid benefits

under the applicable prevailing wage schedule (see Pet. Exs. 2-10).

As part of its investigation, the Comptroller subpoenaed copies of certified payroll

records and daily inspection reports for the Amsterdam bus depot project in approximately June

2005. On May 1, 2006, the Comptroller served respondents with a notice to produce “all payroll

books and records” relating to the Amsterdam bus depot project as well as “[t]he cost of the

supplemental fringe benefit, if any, provided to the workers employed [on the Amsterdam bus

depot project], and all documents and plan descriptions thereof” (see Seidenberg Aff. in

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Opposition to Summary Judgment Motion at Ex. 4). On June 5, 2006, respondents produced

certified payroll records for the project, as well as cancelled pay checks and tax records.

By letter dated March 29, 2007, the Office of the Inspector General of the Metropolitan

Transit Authority referred the second case to the Comptroller concerning work done on 17 other

bus depots under a contract with the NYCTA (Seidenberg Aff. in Opposition to Summary

Judgment Motion at Ex. 8). According to the payroll records on these projects (Pet. Ex. 16), the

work on these other bus depots was completed in 2006.1 Neither party provided any other

information concerning the nature and scope of the work done at these other bus depots.

On July 6, 2011, petitioner mailed respondent a copy of the initial audit (Resp. Ex. H)

regarding the work performed on both the Amsterdam bus depot and the other bus depots. In

calculating the prevailing wages, the audit used the prevailing wage rate for most of the job

classifications indicated on the payroll records, with one exception. For those workers who were

classified as asbestos handlers and laborers, the audit found that their hours should have been

paid 20 per cent at the asbestos handler rate and 80 per cent at the mason tender rate. Using

these definitions, the audit found that 46 workers had been underpaid, resulting in compensation

owed of $371,704, interest of 16 per cent up to March 2011 of $390,803, and a 25 per cent civil

penalty of $190,626, for a total violation amount of $953,134.20.

A few months later, on October 1, 2012, the Comptroller filed the initial petition with this

tribunal. Prior to and during the hearing, the Comptroller’s audit was revised several times: to

alter the method under which the workers’ hours were calculated, to move back the interest

accrual date to two years after the wages should have been paid, and to credit Colonial for

retirement benefits shown to have been paid the workers. Following the hearing, a final audit

was submitted along with the petitioner’s post-hearing memorandum, and this is the audit used in

the analysis below.

1 The payroll records (Pet. Ex. 16) indicate that the other bus depot projects included: Gun Hill bus depot (Dec. 8, 2004, to Aug. 23, 2006), Manhattanville bus depot (Dec. 22, 2004), 126th Street bus depot (Jan. 5, 2005), East New York bus depot (Feb. 2, 2005, to Aug. 31, 2005), Jamaica bus depot (Mar. 9, 2005, to Sept. 20, 2006), Michael J. Quill bus depot (Mar. 9, 2005, to Feb. 1, 2006), Ulmer Park bus depot (June 15, 2005, to Aug. 9, 2006), Queens Village bus depot (Aug. 31, 2005, to Apr. 26, 2006), Castleton bus depot (Aug. 31, 2005, to Oct. 26, 2005), Livonia bus depot (Nov. 9, 2005, to Dec. 14, 2005), Mother Clara bus depot (Feb. 1, 2006), Zereda bus depot (Apr. 12, 2006), Flatbush bus depot (May 3, 2006, to July 19, 2006), College Point bus depot (May 31, 2006, to June 21, 2006), Kingsbridge bus depot (July 26, 2006), Baisley Park bus depot (Aug. 9, 2006, to Aug. 16, 2006), and Jackie Gleason bus depot (Aug. 23, 2006, to Aug. 30, 2006).

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The evidence presented at the hearing by petitioner included testimony from five of the

workers, the workers’ written complaints and accompanying pay stubs, certified payroll records,

and daily inspection reports concerning the work done at the Amsterdam bus depot, as well as

payroll records of the work done at the other bus depots. The payroll records from Colonial

included a check in a box indicating that benefits were paid, while the payroll details indicated

no payment of benefits to any of the workers. Petitioner also offered testimony from the analyst

who prepared the audit and a staff engineer supporting the appropriateness of the job

classifications reflected in the audit. Petitioner alleged that respondent Colonial underpaid

workers in three ways: (1) by failing to pay benefits required under the contracts and by the

Labor Law; (2) by improperly designating the workers as lower-paying worker classifications;

and (3) by failing to pay some of the workers for all of the days and hours they worked.

Respondents offered the testimony of owners Veap Sela and Adriana Sela and the

Colonial accountant to explain how the worker job classifications of laborer and asbestos handler

were chosen and how the payroll reports were prepared. Respondents also offered records

showing that, beginning in 2004, Colonial paid retirement benefits for some of the workers.

Near the end of the hearing, respondents obtained and provided over 1,000 pages of additional

records procured by subpoena from NYCTA regarding the Amsterdam bus depot project.

Complainants’ Testimony

Five of the workers, Hakan and Numan Korkut, Mr. Senturk, Mr. Ramlochan, and Mr.

Rispoli, testified at the hearing. All of the workers agreed that they generally worked together as

a team at the Amsterdam bus depot, performing all stages of the work from the initial scraping of

paint to the sealing of the new concrete (H. Korkut: Tr. 318-19; N. Korkut: Tr. 343; Senturk: Tr.

473; Ramlochan: Tr. 46-48; Rispoli: Tr. 399). The Korkut brothers and Mr. Ramlochan testified,

and stated in their complaints, that they also worked at other Colonial jobs during the same time

they worked at the Amsterdam bus depot, including projects like schools and Staten Island

College which were not part of the Comptroller investigation (H. Korkut: Tr. 241-45; N. Korkut:

Tr. 343; Ramlochan: Tr. 82).

Hakan Korkut testified that he worked full time for Colonial from June 11, 2003 until

August 16, 2006, and that he commuted from Staten Island with his brother Numan, his father

Nazif and his cousin Mr. Senturk (Tr. 318-19). He identified the complaint (Pet. Ex. 12) he filed

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in July 2004 along with many of his pay stubs. He worked at the Amsterdam bus depot almost

every day. He stated that there were often problems with his checks and that he would be paid

for only 14 hours or so even though he worked 40 hours. He asked Mr. Sela about this, and Mr.

Sela told him they would correct the problem (Tr. 232-33). Some pay stubs included a separate

line for 7 or 14 hours of work and he surmised that these items might reflect pay from the week

before (Tr. 232). Hakan Korkut’s testimony was largely consistent with his complaint (Pet. Ex.

3).

Numan Korkut, Hakan’s brother, testified that he began working for Colonial in 2000

(Tr. 342). From June 2003 through 2004 or 2005, he worked at the Amsterdam bus depot (Tr.

343). Numan Korkut identified the complaint (Pet. Ex. 4) he filed with the Comptroller on July

29, 2004, attaching his pay stubs (Tr. 348). He stated that during the entire time he worked on

the Amsterdam bus depot, he did not receive any benefits. After he left Colonial, in

approximately 2005, he was mailed a letter indicating that 401(k) benefits were being held for

him (Tr. 350).

Mr. Senturk, Hakan’s cousin, testified that he worked for Colonial from 1999 until late

2008 (Tr. 468). He worked at the Amsterdam bus depot from June 2003 through 2004 (Tr. 471;

Pet. Ex. 6). He identified the complaint (Pet. Ex. 5) he filed with the Office of the Comptroller

in August 2004. Although he did not receive benefits for much of the time he worked for

Colonial, at some point he did receive a check for benefits Colonial had contributed on his

behalf.

Mr. Ramlochan testified that he worked for Colonial Roofing from August 2001 until

May 12, 2005 (Tr. 20, 31). Mr. Ramlochan identified his complaint (Pet. Ex. 8) filed with the

Comptroller on January 6, 2006. The complaint included copies of Mr. Ramlochan’s pay stubs

and also an annotated calendar on which he recorded his work location and daily work hours for

2003, 2004, and part of 2005 (Tr. 22, 24, 28, 31-32, 37). Mr. Ramlochan also recorded on the

calendar any days he did not work. He stated that he kept the calendar to ensure that Colonial

paid him for all the days and hours that he worked (Tr. 24-27).

Mr. Ramlochan testified that, in 2001, shortly after he began working for Colonial, he

asked Mr. Sela why he was paid no benefits (Tr. 66). Mr. Sela replied, “Ram, why are you in a

rush? I'm going to give you benefits” (Tr. 66). Despite this promise, Mr. Ramlochan received no

benefits, health insurance, or retirement contributions while he worked for Colonial through

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2005 (Tr. 66). In June 2007, after Mr. Ramlochan left Colonial, he received a check for

$1,032.05 from the Boon Group and statement indicating that the benefits were contributed by

Colonial on his behalf for work he performed in December of 2004 and some periods during the

first part of 2005 (Tr. 77-78).

Mr. Rispoli testified that he was the working foreperson for Colonial at the Amsterdam

bus depot from July 2003 to the end of May 2004 and only worked at that location (Tr. 393-94,

401-03). He was hired for the position based upon prior experience with concrete repair and

building construction (Tr. 393). Mr. Rispoli worked under Frank Rosario and Annette Lentini,

the primary Colonial supervisors. Mr. Rosario was Mr. Rispoli’s direct supervisor as well as the

supervisor of all of the crews (Tr. 395, 893-95).

At the Amsterdam bus depot, Mr. Rispoli worked with a group of approximately ten

workers consisting of Nazif, Hakan, and Numan Korkut, Mr. Ramlochan, Mr. Senturk, and “and

two younger Polish guys” (Tr. 399). At the start of the job, Mr. Rispoli and Mr. Ramlochan

reviewed project plans and assisted in probing the condition of the cement on the ceiling to help

identify the scope of work (Tr. 394). Mr. Rispoli performed the same work done by the other

workers (Tr. 406-07, 915, 918, 927). He knew he was supposed to receive benefits and asked a

Colonial supervisor about them. The supervisor said that money was being put in an escrow

account for the workers, but, in fact, no benefits were ever provided (Tr. 417). In Mr. Rispoli’s

complaint (Pet. Ex. 6), submitted in February 2005, he indicated that he worked on only the

Amsterdam bus depot from July 2003 until May 2004.

Two workers submitted complaints but did not testify at the hearing. In Nazif Korkut’s

complaint (Pet. Ex. 2), submitted in July 2004, he indicated that he worked on the Amsterdam

bus depot as well as three other Colonial jobs from 2003 through 2004. The other projects

included P.S. 29, a high school on West 48th Street, and the College of Staten Island.

In Shkumbin Lleshi’s complaint (Pet. Ex. 9), submitted in March 2006, he indicated that

he worked on the Amsterdam bus depot from October 2004 to 2005 and was paid no benefits.

Although he indicated he worked on other projects prior to 2004, he did not indicate any other

projects worked on in 2004 and 2005.

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Amsterdam Bus Depot Work

The workers described in detail the conditions at the Amsterdam bus depot and the work

they performed. The years of roof leaks had caused portions of the depot ceiling to crumble and

the NYCTA had installed a steel cage just below the ceiling to protect equipment and personnel

from falling concrete (Rispoli: Tr. 397; Ramlochan: Tr. 49-50; H. Korkut: Tr. 214-15; N.

Korkut: Tr. 344-45). During the project, the depot continued to be used to garage NYCTA

vehicles, requiring that 50 by 50 foot sections where active work was being done be separated

from the rest of the depot by tarps (Rispoli: Tr. 398; H. Korkut: Tr. 215).

The first step, after separating off a section of the depot, was to cut down the metal cage

beneath the ceiling. Next the workers, wearing protective clothing and dust masks or respirators,

removed loose lead paint from the ceiling by power washing and scraping. The paint was placed

in 55-gallon hazardous waste containers (Rispoli: Tr. 400-01; Ramlochan: Tr. 53-54; H. Korkut:

Tr. 214; N. Korkut: Tr. 346; Senturk: Tr. 472-73).

Next the workers sounded the ceiling by pounding a hammer every foot or so in order to

locate hollow spots of spalled concrete (Rispoli: Tr. 401; N. Korkut: Tr. 347). They marked the

hollow areas and, using jack hammers and saw cutters, removed the concrete and rusted steel

supports, called rebar, from the area (Rispoli: Tr. 403; Ramlochan: Tr. 56-57; H. Korkut: Tr.

214-15; N. Korkut: Tr. 347). The next step involved installing new steel rebar, priming and

painting, and then shooting in new concrete, called shotcrete, to the exposed areas (Rispoli: Tr.

405; Ramlochan: Tr. 55, 58; H. Korkut: Tr. 221-23; N. Korkut: Tr. 348). Finally, the new

concrete would be painted and sealed (Rispoli: Tr. 406). The workers stated that they performed

all this work with the exception of shooting in the shotcrete, which was done by a subcontractor

(Rispoli: Tr. 406; Ramlochan: Tr. 55, 58; H. Korkut: Tr. 221-23; N. Korkut: Tr. 348).

Wages Paid

The certified payroll records from the Amsterdam bus depot (Pet. Ex. 13) indicate that

the project began around May 2003 and was completed in approximately March 2005. Petitioner

also submitted certified payroll reports from repair projects on the 17 other bus depots (Pet. Ex.

16), indicating work from 2004 through 2006. The two sets of payroll records show that, from

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2003 to 2006, the workers who filed complaints2 were paid wages from $28.74 to $31.29 per

hour to work as laborers and asbestos handlers. Mr. Rispoli was later paid $33.00 per hour as an

iron worker. The payroll records also show that none of the workers were paid supplemental

benefits.

The Comptroller’s investigation, described in more detail below, concluded that the

appropriate prevailing wage job classifications for the three groups of workers were asbestos

handler, mason tender, and metallic lather. Using these classifications, significant underpay-

ments were found as to the mason tenders and metallic lathers. Thus, according to the prevailing

wage schedules (Pet. Ex. 1), the combined hourly rate, including regular pay and benefits, for

asbestos handlers was $30.90 and for mason tenders was $42.49. Most of the hourly wages paid

by Colonial were higher than the prevailing hourly rates for asbestos handlers, but lower than the

hourly and benefits rates for mason tenders.3 Mr. Rispoli’s hourly rate of $33.00 was just below

the regular hourly prevailing rate for metallic lathers of $33.50, excluding benefits, but far below

the total hourly prevailing rate of $64.33, with benefits added.

Worker Classification

Paul Brumlik, a civil engineer and the assistant director of classifications in the Bureau of

Labor Law, testified concerning the appropriate job classifications for the work done in the

Amsterdam bus depot. Mr. Brumlik reviewed the complaints from the Colonial workers as well

as the certified payroll records (Tr. 595-96). Based upon this review, he concluded that the job

classifications of laborer and iron worker were inappropriate. Mr. Brumlik indicated that a

laborer is a “heavy construction” worker who works outside on building things such as bridges,

sewers, or roads (Tr. 594). This title is not appropriate for interior work repairing a ceiling.

Because the work for the Amsterdam bus depot was performed inside, “laborer” was not an

appropriate classification.

2 The Comptroller’s investigation and audit showed no prevailing wage violations for two of the nine workers who filed complaints. 3 For example, for 2003, the prevailing hourly rate for asbestos handlers was $23.85 plus $7.05 in benefits, for a total hourly pay of $30.90. The prevailing hourly rate for mason tenders was $27.55 plus $14.94 in benefits, for a total hourly pay of $42.49 (see Pet. Ex. 1). During 2003, Colonial paid its asbestos handlers and laborers $28.74 and $31.29, rates close to the total prevailing rate for asbestos handlers of $30.90, but well below the total prevailing rate for mason tenders of $42.49.

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Mr. Brumlik also concluded that only some of the Amsterdam bus depot work fell within

work done by an asbestos handler. Asbestos handlers are workers who remove lead paint, which

is considered a hazardous material (Tr. 598). However, only concrete with loose lead paint

would be considered hazardous; concrete with lead paint firmly attached would not be

hazardous. Chipping and saw cutting of concrete, where the lead paint is attached and is not

airborne, would not be classified as lead abatement (Tr. 612). The removal of concrete and other

concrete repairs would be an appropriate task for mason tenders, not asbestos handlers (Tr. 639-

40). Thus, Mr. Brumlik concluded that, when performing tasks such as chipping, cutting, and

removing concrete, the Colonial laborers should have been classified as mason tenders (Tr. 606-

07).

Based upon his review of the records, particularly the payroll records and the daily

inspection reports, Mr. Brumlik further concluded that the Colonial payroll records, which

reflected that most of the bus depot work was performed by asbestos handlers, were inaccurate.

He noted various discrepancies between the NYCTA daily inspection reports of work done,

which often indicated no lead paint removal, and Colonial’s certified payroll records, which

typically listed most of the workers as asbestos handlers (Tr. 613-14). In this regard, Mr.

Brumlik then used an industry formula to estimate the percentage of hours spent on lead

abatement versus concrete removal and repair. He testified that he used RS Means, a set of

engineering and construction guidelines, to estimate the work hours necessary to complete a

given type of task. For paint removal, RS Means indicates that .09 square feet of paint can be

removed by one worker in an hour (Tr. 599). Because there were 12,300 square feet of ceiling,

Mr. Brumlik calculated that about 2,250 man hours would be needed to perform the lead

abatement work. He compared this value to the total number of man hours for the Amsterdam

bus depot project and found that approximately 17 per cent of those man person hours would

have been used to perform the lead abatement, while the remaining man hours, would have been

used to remove and repair the concrete. He rounded the 17 per cent calculation up to 20 per cent

to be conservative and determined that 20 per cent of the work should be paid at the asbestos

handler rate, while 80 per cent should be paid at the mason tender rate (Tr. 599-601).

Finally, Mr. Brumlik stated that the correct classification for a person performing the

rebar repair, as was required at the Amsterdam bus depot, should correctly be classified as

metallic lather, not iron worker (Tr. 618).

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Comptroller Audit

Ms. Stadnicka, a management auditor with the Comptroller’s office, testified that she

performed initial and revised audits of the wages and benefits paid to the Colonial workers as

compared to those required under the Comptroller’s applicable prevailing wage rate schedule. In

preparing the initial audit, she reviewed records provided to her by the investigator, including the

complaints and the pay stubs submitted by the seven workers, the certified payroll records, and

the calendar maintained by Mr. Ramlochan.

Ms. Stadnicka was also provided with guidelines by the investigator and from staff

attorneys for preparing the audits. The least complicated portion of the audit was for the 30

workers who did not file complaints but were identified on Colonial’s payroll records as having

worked on the bus depot jobs. For these workers, Ms. Stadnicka used the hours and wages paid

from the certified payroll records and the classifications as explained by Mr. Brumlik above. For

the asbestos handlers and laborers, Ms. Stadnicka was instructed to use the 20/80 per cent split

between the asbestos handler rate and the mason tender rate, as described by Mr. Brumlik. For

Mr. Rispoli, Ms. Stadnicka used the rate for metallic lathers.

For the workers who filed complaints, Ms. Stadnicka utilized a more complex method of

determining the hours worked. The hours worked and wages paid were generally taken from pay

stubs where provided. If a single pay stub in a chronological sequence was missing, Ms.

Stadnicka derived the wages by calculating the difference between the year-to-date pay from the

preceding and succeeding pay stubs (Tr. 503).

She was also directed to use two overriding presumptions. First, for the period from July

30, 2003, to May 12, 2004, she was told to use the hours reported in Mr. Rispoli’s pay stubs for

Haman Korkut, Numan Korkut, Nazif Korkut, and Mr. Senturk, who all worked as part of Mr.

Rispoli’s team (Tr. 501, 510, 515) to override the hours reported on the workers’ pay stubs or in

the payroll records. For example, for Hakan Korkut for the week ending July 30, 2003, his pay

stub (Pet. Ex. 3) indicates he worked 35 hours. The payroll report (Pet. Ex. 13) for this week,

which appears to be incomplete, does not include his name. Per her instructions, Ms. Stadnicka

referred to the 21 hours worked by Mr. Rispoli for this week and indicated that Hakan Korkut

also worked 21 hours.

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Second, for the periods after May 12, 2004, from the time a worker appeared on the

payroll records, Ms. Stadnicka was told to assume the worker worked 35 hours per week for

weeks where there was no holiday, and reduce the hours to 21 hours per week for weeks where

there was a holiday (Tr. 502). For this period, the hours in the audit frequently differed greatly

from those in the payroll records. For example, for the week ending April 6, 2003, for which

Hakan Korkut did not produce a pay stub, the payroll records (Pet. Ex. 13) indicated he worked 5

hours. In her audit, Ms. Stadnicka indicated he worked 26 hours, a number never fully explained

in the record. The audit reflected similar increased hours worked for Hakan Korkut over the

hours reported in the payroll records for the week ending June 1, 2005.

Ms. Stadnicka indicated that she did not consider the inspection reports (Tr. 544). She

also apparently did not consider the additional site access records (Resp. Ex. L) submitted at the

close of the hearing.

Ms. Stadnicka indicated that, after her initial 2011 audit, she prepared a revised audit

(Pet. Ex. 18) in which she was instructed to compute 16 per cent interest only for two years from

the date the wages should have been paid (Tr. 508). She also revised the audit to credit Colonial

for most of the benefits based upon the Boone Group records submitted during the hearing.4 In

the final audit, submitted following the hearing, claims were withdrawn on behalf of nine

workers because there were no underpayments found or because the records otherwise did not

support a finding that the prevailing wage rate was required. Pet. Post-Hearing Mem. at 17 n. 12.

Respondents’ Evidence

Mr. Sela testified that Colonial, founded in 1970, performs roofing, sheet metal, concrete

work, masonry work, and brick work (Tr. 752). Far from conceding liability for underpayment,

Mr. Sela asserted that all of the workers, including Mr. Rispoli, were “overpaid” (Tr. 786, 837).

When asked repeatedly whether he was aware that the workers on the bus depot projects were

not being paid supplemental benefits, he insisted that he was unaware of this (Tr. 847).

Colonial’s certified payroll records (Pet. Ex. 13), signed by either Mr. Sela or his

daughter Adriana, indicated, with a check in a box on the form, that all “fringe” benefits were

4 According to petitioner’s post-hearing memorandum, the audit credited Colonial for benefits only where the worker appeared on a certified payroll report for the designated period. Pet. Post-Hearing Mem. at 23. The audit gave credit for benefits reflected in the remittance reports for September 2004 to May 2006 (Pet. Ex. 17) and benefits reflected in other records (Resp. Ex. F). Pet. Post-Hearing Mem. at 23.

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paid. Mr. Wilson, Colonial’s accountant since 1998, testified that he filled out the payroll

records for all of the work at issue and gave them to Mr. Sela or Ms. Sela to sign (Tr. 715-16).

When asked about why he checked the box indicating fringe benefits were paid, he stated he did

not remember but knew, “at one point, they were paying benefits to a company called the Boone

Group. I don’t know if it was at this period of time, but that would have been my reasoning for

that” (Tr. 716). He indicated that, after filling out the form at the beginning of a project, he

would photocopy the same form, with the benefits box checked, and use it for subsequent payroll

records (Tr. 717, 732).

Respondents also presented records (Resp. Ex. F) from a company called the Boone

Group showing that Colonial paid benefits on behalf of some 18 workers, beginning in August

2004 for employment periods from June 2004 to November 2006 (Tr. 682-83). These payments

are summarized in a spreadsheet (Resp. Ex. E) created by Adriana Sela. This spreadsheet shows

that Colonial paid a total of $158,189.11 into the Boone Group during this time for 18 workers,

including all of the complainants except Mr. Rispoli.

Pursuant to a subpoena from this tribunal, respondent obtained further additional records

from the Transit Authority. These records included correspondence, minutes of project

meetings, and daily reports for access to the Amsterdam bus depot job site (Resp. Exs. L-HH).

ANALYSIS

Section 220 of the Labor Law provides that entities that contract with the City under

public works contracts must pay their employees “not less than the prevailing rate of wages.”

Labor Law § 220(3)(a). See Erie County Industrial Development Agency v. Roberts, 94 A.D.2d

532 (4th Dep’t 1983), aff’d, 63 N.Y.2d 810 (1984); Office of the Comptroller v. Picone, OATH

Index No. 976-78/97 (Apr. 21, 1997), rev. and remanded, Comptroller’s Dec. (June 17, 1997).

The statute implements the constitutional mandate that contractors and subcontractors on public

works projects pay their workers, laborers, and mechanics no less than the rate of wages and

supplements prevailing for the applicable trade or occupation in the locality where the project is

located. N.Y. Const. art. I, § 17. The Comptroller, as “fiscal officer” for New York City,

determines the prevailing wage and supplements on an annual basis. Labor Law § 220(5)(e).

A few issues in the case were not disputed. As to the issue of benefits, I find that, as

shown by the payroll records and pay stubs, Colonial failed to pay any of its workers benefits in

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their weekly pay checks. I further find that, as to the classifications of carpenter, metallic lather,

roofer, and electrician, none of which respondents contested, the workers were entitled to the

prevailing wages and supplemental benefits for these job categories, as shown in the final

Comptroller audit. In addition, I find that Colonial should be given credit, as reflected in the

audit, for all retirement benefits paid into the Boone Group on behalf of workers who, according

to the payroll records, worked on the bus depot projects during the corresponding pay periods.

Respondents’ attorney raised general complaints about the investigation, none of which

were convincing. First, he contended once more that petitioner’s seven-year delay in bringing

the case to a hearing prevented Colonial from producing documents to support worker

classification, since the 2005 subpoena was only for payroll records. Respondents argued that

this delay prevented them from presenting evidence to defend themselves against the allegations

in the petition, particularly those regarding appropriate worker classification and the accuracy of

the payroll records as to hours worked.

Respondents’ argument as to the scarcity of evidence is undermined by the several

thousands of pages of documents placed into the record during the hearing, records which

included the certified payroll records, pay stubs, daily inspection reports, project meetings and

correspondence, and site access reports. In fact, the records submitted seemed to comprise

nearly all of the relevant documents which existed, particularly with regard to the Amsterdam

bus depot. At the hearing, respondents were not able to identify any specific items of proof

which were unavailable as a result of the seven years’ delay, with the possible exception of the

faded memories of those familiar with the Amsterdam bus depot work. And, as to this issue, it

was notable that, other than Mr. Rispoli’s status as a working foreperson or a supervisor, there

were no factual disputes as to the work details. The Comptroller’s audit assessed interest for the

violations only for two years, significantly reducing the most obvious financial impact that delay

might have caused to respondents. I therefore conclude that the delay in bringing the case to trial

caused no significant prejudice to respondents in offering evidence at the hearing as to any of the

issues raised by the petition or the Comptroller audit and should not be a basis for dismissing or

diminishing any of the claims.

Two contested issues remain as to the number of work hours and the appropriate

classification for the asbestos handlers and laborers. As reflected in the final audit and as

explained at the hearing, petitioner asserted that (1) the number of work hours for some of the

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employees were understated on the payroll reports and (2) the appropriate prevailing rate for the

laborers and asbestos handlers should be a 20/80 per cent combination of the prevailing rates for

asbestos handlers and cement masons. Respondents objected to both of these assertions and

presented some proof in support of an alternative result. Resolution of these issues thus requires

further discussion and a closer examination of the evidence.

Calculation of Work Hours

The audit assessed Colonial for additional work hours for four workers, Hakan Korkut,

Nazif Korkut, Numan Korkut, and Mr. Senturk, based upon two different theories. First,

petitioner assumed that, for the period from July 2003 through May 2004, these workers all

worked exactly the same hours as the foreman, Mr. Rispoli, who submitted pay stubs up to May

12, 2004. Second, for the time period after May 12, 2004, when Mr. Rispoli ceased working for

Colonial, petitioner assumed that the four workers worked 35 hours per week, except holidays.

Both theories rested upon the premise that both the payroll records and the pay stubs were too

inaccurate to be relied upon and that the workers should therefore be credited for working.

The evidence in support of the first theory consisted of the workers’ testimony that a

core group of workers worked together on most days and that the work days reported on the

certified payroll records (Pet. Ex. 13), showing only a few workers on some days, seemed

suspect. Mr. Rispoli testified that he worked alongside the same crew on a full-time basis, five

days a week, for nearly every day of the twelve months he worked there (Tr. 416-17, 895, 908).

He generally worked a 40-hour week and kept track of his hours to make sure he was paid

correctly because he had heard of others who had problems with their checks (Tr. 412). When

shown a copy of the certified payroll for the week of December 10, 2003, that reflected Mr.

Rispoli working 40 hours, Hakan Korkut working 16 hours and Nazif Korkut working 8 hours,

Mr. Rispoli stated that those hours did not make sense because he and the others “almost always”

worked together as a crew (Tr. 416-17). When shown the same payroll, showing he worked only

16 hours that week, Hakan Korkut testified that this must be inaccurate (Tr. 239).

Numan Korkut, stated that when the other workers were working, he was working as well

(Tr. 324, 340, 352-53). Mr. Senturk testified that Hakan and Numan were at the work site “99%

of the time” when Mr. Senturk was there (Tr. 475).

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Petitioner’s theory that the four workers should be found to have worked exactly the

same hours as Mr. Rispoli from June 2003 through May 2004 was unpersuasive. First, it seemed

unlikely that none of the workers were absent or left work early for these 11 months. While I

found the five workers generally credible, their uncorroborated statements that they recalled

working together nearly every day for five consecutive months nine or ten years ago seemed of

questionable reliability. The reliability of these accounts seemed particularly suspect where the

workers were aware that they stood to collect considerable additional wages by having the

number of work hours increased. It seemed notable that Mr. Ramlochan, the only worker who

kept a log of his work hours, did not assert that Colonial failed to pay him for all the hours he

worked. In fact, Mr. Ramlochan’s calendar and the workers’ pay stubs indicated that there were

many weeks when Mr. Rispoli worked either more or fewer hours than Mr. Ramlochan and the

other workers. In addition, the payroll records indicate that Mr. Rispoli, the foreman assigned

only to the Amsterdam bus depot, worked more hours than the other workers.

The primary reasoning underlying the investigation’s reliance upon worker statements, in

preference to Colonial’s certified payroll records, was due to the false certification in the payroll

records that benefits were paid. This rationale relies upon the holding in Mid Hudson Pam Corp.

v. Hartnett, 156 A.D.2d 818 (3d Dep’t 1989):

When an employer fails to keep accurate records as required by statute, the Commissioner is permitted to calculate back wages due to employees by using the best available evidence and to shift the burden of negating the reasonableness of the Commissioner’s calculations to the employer. In such a situation the amount and extent of underpayment is a matter of just and reasonable inference and may be based upon the testimony of employees.

Id. at 821 (citations omitted).

I find that totally discounting the information contained in Colonial’s certified payroll

records would be inappropriate here. Even though the checking of the payroll form box

indicating benefits were paid was admittedly inaccurate, there was no evidence to show that the

hours recorded on the payroll records were deliberately falsified or otherwise inaccurate. In fact,

there were numerous indications that the entries on the payroll records were correct. As shown

by respondents’ post-hearing memorandum, the certified payroll records closely matched the

workers’ pay stubs as well as Mr. Ramlochan’s calendar. The records reflected that no benefits

were paid, a significant admission which suggests accuracy. See generally Health and Hospitals

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Corp. (Woodhull Medical and MentalHealth Ctr.) v. Powell, OATH Index No. 1688/06 at 3

(July 7, 2006) (admission to making false statement held to enhance credibility). Several

workers indicated that, where workers reported underpayments for past work weeks, Colonial

rectified the errors by adding pay to subsequent pay checks, as reflected by a second itemized

pay line on many of the workers’ pay stubs. This strongly suggested that hours reported on the

payroll records were generally accurate and that, where the workers noted errors, appropriate and

timely payment adjustments were made by Colonial.

The reliability of the payroll records as to hours worked is borne out by comparison of

the payroll records (Pet. Ex. 13) with the access reports (Resp. Ex. L). For example, for the work

week ending September 17, 2003, the payroll records show that Hakan Korkut did not work on

September 15 and worked only 32 hours that week, while Mr. Rispoli worked on September 15

and worked a total of 40 hours. Mr. Rispoli’s pay stub for this date also indicates he worked 40

hours. The audit credited Hakan Korkut for working 40 hours this week. However, the access

report for September 15 shows that Hakan Korkut was not scheduled to work on that day,

although Mr. Rispoli was. Similarly, for the week ending October 8, 2003, the payroll records

show that Hakan Korkut did not work on October 2 and worked only 32 hours that week, while

Mr. Rispoli worked on October 2 and worked a total of 40 hours that week. The audit again

credited Hakan Korkut for working 40 hours, even though the access report for October 2 shows

that Hakan Korkut was not scheduled to work that day.

For these reasons, I find that the preponderance of the evidence does not support a fact-

finding that four workers all worked the same hours as Mr. Rispoli in 2003 and 2004, but find

instead that the workers worked the hours shown in the payroll records.

After Mr. Rispoli no longer appeared on the payroll records, petitioner used another

theory to determine the hours of the four workers. As to work done in 2005 and 2006, for which

these workers lacked pay stubs, the audit reflected that they generally worked 35-hour weeks,

with the exception of weeks containing a holiday, where they should be found to have worked

21- or 28-hour weeks, even though there were neither pay stubs nor payroll records showing that

they worked on bus depot projects on all of these days.

Once again, petitioner’s methodology of rejecting the hours reported in the payroll

reports based upon the fact that the reports were falsely certified does not seem reasonable

because the evidence suggested that the information in the reports as to hours worked and wages

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paid was generally accurate. For the purpose of estimating the number of hours worked on the

bus depot projects, the payroll records seemed reliable.

In fact, in this case, the payroll records were shown to be more reliable than the workers’

pay stubs of these four workers because other non-prevailing rate projects were being worked on

at the same time. Five workers testified that, from 2003 through 2005, they were working on

other Colonial projects at public schools and at Staten Island College,5 projects which were

either not covered by the prevailing rates or were part of the previous settlement Colonial

reached concerning its work in City schools (see Pet. Ex. 19). This left open the possibility that

some of the hours included on the workers’ pay stubs may have been for Colonial projects other

than the bus depots. It was apparent that none of the workers had any memory as to where they

worked or the quantity of hours they worked in any given pay week during this time. The

payroll records showed that, for the earlier period, the workers frequently worked less than a full

week and it seemed likely that this pattern would have continued. For this reason, the most

reliable evidence to determine the hours worked on the bus depots were the payroll records.

I therefore find that, in the new audit, the hours for Hakan Korkut, Nazif Korkut, Numan

Korkut, and Mr. Senturk should be derived first from the payroll records showing that the

employees worked at either the Amsterdam bus depot or one of the other bus depots covered by

the NYCTA contract. For any days on which the payroll records show an employee was absent,

the access reports (Resp. Ex. L) should be consulted. If the access reports indicate the employee

was scheduled to work, the worker should be credited for working that day at the prevailing

wage. In the absence of payroll records or access reports indicating the employee was present,

no additional hours should be included because there is insufficient proof to support such a

finding.

Work Classification of Ceiling Repair Work

Petitioner asserted that the proper prevailing rates for the work done at the Amsterdam

bus depot should have been asbestos handler and mason tender, but not laborer. In this regard,

petitioner relied upon the testimony of Mr. Brumlik to demonstrate that, while the work of paint

5 Ms. Stadnicka stated that she understood that work on the Staten Island College project was only in May 2003 and therefore would not have been active during most of the Amsterdam bus depot project (Tr. 573). She did not identify the source for this belief and this tribunal’s review of the record failed to discover any. Although Mr. Ramlochan’s calendar showed that he worked on Staten Island College for only a few days around April and May 2003, there was no evidence of the exact dates the Staten Island College project was active.

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removal was appropriate for asbestos handlers, the work of cement removal, surface preparation,

rebar repair, shotcreting, and repainting was not. Petitioner also relied upon Mr. Brumlik’s

explanation of a formula, referred to as RS Means and utilized in preparation of bids on

construction contacts, to estimate the number of hours needed for paint removal based upon the

square footage of the bus depot ceiling. The number of paint removal hours was then compared

to the total work hours for the project, resulting in an estimate of 20 per cent for lead paint

removal at the asbestos handler rate and 80 per cent for masonry work at the mason tender rate.

For their part, respondents contended that the lead abatement work included tasks beyond

paint removal and should also include the removal of the wire mesh and the removal of the

concrete with lead paint on it. In support of this contention, respondent offered a letter (Resp.

Ex. K), dated June 17, 2003, from the NYCTA indicating that the “sounding” for hollow areas

and the removal of spalled concrete in those areas “should also be treated as lead abatement.” In

a follow-up letter, the NYCTA indicated that the “chipping of exposed concrete in the spalled

areas is not considered to be lead abatement” and that this work could be done “by your

laborers” (Resp. Ex. J).

Respondents argued that several other documents obtained from the NYCTA suggested

that the lead abatement work, particularly where the concrete removal work was included,

constituted more than 20 per cent of the overall project. In a spreadsheet breakdown of

Colonial’s bid proposal (Resp. Ex. W), submitted in May 2003 to the NYCTA, the project was

broken down into eight stages, each consisting of wire mesh removal, lead abatement, concrete

removal, rebar preparation and bonding, shotcrete, beam repairs, crack repairs, and ferrogard.

The total cost of wire mesh removal was $37,820, the cost of lead abatement was $132,930, and

the cost of concrete removal was $295,720. The total for all three of these types of work would

have been $466,470, or roughly 47 per cent of the total bid price of $985,000.

Respondents’ argument that the RS Means estimate used by Mr. Brumlik failed to

account for all of the lead abatement work actually performed by Colonial was persuasive. On

this particular job, lead paint chips and concrete with lead paint chips, were being handled during

at least three phases of the work: in removing the wire mesh below the ceiling, in scraping and

power washing the surface of the ceiling, and in drilling, sawing, and disposing of the spalled

concrete which had loose lead paint on it. The bid proposal clarifications supplied by Colonial in

2003 seem sufficiently reliable to support a finding that the entirety of the lead abatement work,

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including all stages of the project where the workers came into contact with loose lead paint, was

45 per cent, rather than 20 per cent. Thus, in the revised audit to be prepared, the prevailing

wage rates for the asbestos handlers and laborers who worked at the Amsterdam bus depot

should be split between 45 per cent asbestos handler rates and 55 per cent mason tender rates.

For the work done on the bus depots other than the Amsterdam bus depot, no proof was

submitted as to the nature of the work. There is thus no basis to dispute the accuracy of the work

classifications used by Colonial in its payroll records. In the revised audit, the Colonial

classifications should be used for all of the workers, with the exception that the mason tender

classification should be substituted for laborer.

Working Foreperson vs. Supervisor

Mr. Rispoli testified that he was the working foreman at the Amsterdam bus depot and, in

petitioner’s audit, Mr. Rispoli was classified as a worker, entitled to prevailing wages at the

appropriate rate. It is well settled that working foremen on public works projects are entitled to

prevailing wages and supplements under Section 220 of the New York Labor Law. Austin v.

City of New York, 258 N.Y. 113, 115-17 (1932); Tenlap Constr. Corp. v. Roberts, 141 A.D.2d 81

(2d Dep’t 1988). Mr. Brumlik explained that, in engineering terms, a working foreperson is a

worker who is working as well as supervising the rest of the crew, as necessary, and directing

them to do whatever is required to complete the work (Tr. 620). If the person is working and

performing construction duties, that person is entitled to prevailing wage if the work is

performed (Tr. 620).

At the hearing, respondent contended that Mr. Rispoli was a supervisor and manager, not

a worker. In support of this argument, Mr. Sela testified that Mr. Rispoli was hired as a

supervisor, not a working foreman (Tr. 786). Mr. Sela insisted Mr. Rispoli had supervisory

duties to oversee workers but was not required to perform the physical labor involved with

removing and repairing the bus depot ceiling (Tr. 787, 869-71). Although Mr. Rispoli produced

pay stubs through May 14, 2004, his name does not appear in the Colonial payroll records after

January 14, 2004. Mr. Sela indicated that Mr. Rispoli’s name was removed from the payroll

reports because “he was not a worker” (Tr. 869). Respondent also noted that various records

(Resp. Ex. P) showed that Mr. Rispoli represented Colonial at project meetings in 2003. An

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organization chart dated December 22, 2003 (Resp. Ex. Z) showed Mr. Rispoli as the supervisor

of three crews.

There was a great deal of evidence that Mr. Rispoli was a working foreman, not a

supervisor. The payroll reports classify Mr. Rispoli first as an asbestos handler, receiving the

same pay as the other asbestos handlers, and then as an iron worker, at a higher hourly rate of

pay. None of the payroll records show that Mr. Rispoli was a supervisor. The payroll records

and Mr. Rispoli’s pay stubs show that he was paid at an hourly rate, although in the last months

the quantity of hours was not reported. Mr. Rispoli and the other workers credibly testified that

Mr. Rispoli was the foreman who worked alongside the other workers (Senturk: Tr. 475) and that

the onsite supervisors were Mr. Rosario and Ms. Lentini, whose presence at the work site was

confirmed by the daily inspection reports. The presence of a foreman at the Amsterdam bus

depot is confirmed by the daily inspection reports (Resp. Ex. 14) from August 2003 through May

2004. This was the same period that Mr. Rispoli was employed by Colonial.

After obtaining additional NYCTA records, respondents were permitted to recall Mr.

Rispoli to testify about his job responsibilities as reflected in the newly obtained records. Mr.

Rispoli stated that, as part of his job duties as foreman, he would, at times, be asked by Colonial

supervisors to accompany them to meetings with the MTA (Tr. 913, 927). Mr. Rispoli testified

that he was never a salaried employee and was paid by the hour. If he missed an hour or a day,

he was not paid this time (Tr. 932). Mr. Rispoli never noticed that, beginning with his pay stub

dated February 18, 2004, no hours were set forth on his pay stub (Tr. 930-31). Because the

check was for $1,320.00, his normal weekly pay, he did not inquire (Tr. 931). Respondents did

not dispute Mr. Rispoli’s statements that he did not assist in maintaining Colonial employee

records or in filling out daily reports or certified payrolls (Tr. 415).

The evidence relied upon by respondents to establish that Mr. Rispoli was a supervisor

was, at best, equivocal. The fact that Mr. Rispoli ceased to be listed on the payroll records after

January 14, 2004, proved little. Nor was Mr. Rispoli’s occasional presence at project meetings

with NYCTA inconsistent with his testimony that, at the bus depot, he performed the same work

as the other employees.

Based upon this evidence, I find that Mr. Rispoli was a working foreman, entitled to the

same prevailing rate as the other asbestos handlers for period that he was classified as an

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asbestos handler and entitled to the prevailing rate for metallic lathers for the period that he was

classified as an iron worker.

Penalty and Debarment

Petitioner requested that respondents’ violation be found to be “willful” under Section

235(7) of the Labor Law. A violation is willful where an employer “knew or should have

known” of the violation. Hull-Hazard, Inc. v. Roberts, 129 A.D.2d 348, 352 (3d Dep’t 1987),

aff’d, 72 N.Y.2d 900 (1988). At the hearing, respondents conceded that they were aware that

they were obliged to pay the prevailing wage rates and that the checking of the box on the

payroll reports indicating benefits were paid was inaccurate. This is sufficient to show a willful

violation of the prevailing wage law with regard to the failure to pay benefits. See Office of the

Comptroller v. Abbey Painting Corp., OATH Index No. 2544/11 at 31-32 (June 26, 2012),

adopted, Comptroller’s Dec. (July 2, 2012); Office of the Comptroller v. A & R Paterno

Construction, Inc., OATH Index No. 2248/00 (Oct. 19, 2000).

Petitioner included a 16 per cent interest charge in the audit, the maximum allowed by

Section 220(8) of the Labor Law, set by section 14-a of the Banking Law. Because of the delay

in bringing this matter to hearing, petitioner calculated the interest only for two years from the

time the wages were owed. Based on the severity of the violation with regard to the failure to

pay benefits, the maximum 16 per cent interest is appropriate. Abbey Painting Corp., OATH

2544/11 at 32; Office of the Comptroller v. Jet Stream Maintenance Corp., OATH Index No.

997/11 (Jan. 24, 2011), adopted, Comptroller’s Dec. (Apr. 28, 2011).

Petitioner also requested a 25 per cent civil penalty. Labor Law Section 220(8) permits a

civil penalty of up to 25 per cent of the total underpayment to be imposed for prevailing wage

violations. The factors to be considered are “the size of the employer’s business, the good faith

of the employer, the gravity of the violation, the history of previous violations and the failure to

comply with recordkeeping or other non-wage requirements.” Lab. Law § 220(8) (Lexis 2013).

As to this penalty, there are a number of factors to consider. First, Mr. Sela

acknowledged that, in settlement of a case involving underpayment of workers on a School

Construction Authority project, in August 2005, he, his wife, and his daughter all signed a

stipulation (Pet. Ex. 19) agreeing to create an escrow account for funding unpaid supplemental

benefits (Tr. 837-38). He insisted, however, that the attorney for the Authority “lied” to him to

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induce him to sign the document (Tr. 840). The amount of the wage violations found to have

occurred here under two different contracts for 37 workers is considerable.

Nonetheless, a few factors should serve to mitigate the penalty. Midway through the

project, in 2004, Colonial apparently recognized its error in failing to pay benefits and created

retirement accounts on behalf of the workers. In addition, even though the checking of the

benefits box on the payroll reports was false, the hours and itemized wage amounts reflected in

the reports appear to have been completed accurately. Colonial also responded, albeit somewhat

belatedly, to the Comptroller’s requests for records and generally cooperated with the

investigation. Considering all of these factors, I recommend a penalty of 20 per cent rather than

the maximum penalty of 25 per cent. See Office of the Comptroller v. Uddin USA Corp., OATH

Index No. 741/07 at 7-8 (Mar. 19, 2007); Office of the Comptroller v. Excalibur Protective

Services, OATH Index No. 1647/95 at 3-4 (Aug. 29, 1995); Office of the Comptroller v. R. D.

Mortman & Co., OATH Index No. 584/92 (May 22, 1992).

Finally, petitioner has sought a finding that the individual respondents, Veap Sela,

Adriana Sela, and Kathleen Sela, be debarred for five years from bidding on future public work

contracts within New York State. That request is also appropriate. Section 220-b(3)(b)(1) of the

Labor Law provides two separate and independent bases for debarment: willful violations on one

or more public work projects and falsification of payroll records. Here, respondents were shown

to have willfully underpaid prevailing wages and benefits on multiple public work projects and

made false certifications on payroll records. Thus, all of the respondents should be barred from

bidding on future public work contracts within New York State for five years. See Abbey

Painting Corp., OATH 2544/11 at 33.

FINDINGS AND CONCLUSIONS

1. Respondents violated Labor Law Section 220 by willfully failing to pay workers the prevailing rate of supplementary benefits on multiple bus depot projects as set forth above.

2. Respondents violated Labor Law Section 220 by failing to pay

workers the appropriate prevailing hourly rate for the type of work performed on the Amsterdam bus depot, as set forth above.

3. Petitioner should complete a new audit with the following

modifications. The hours worked for Hakan Korkut, Nazif Korkut,

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Numan Korkut, and Bayram Senturk should be taken from the payroll records. For days on which the payroll records show an employee was absent, the access reports should be consulted. If the access reports indicate the employee was scheduled to work, the worker should be credited for working that day. In the absence of payroll records or access reports indicating the employee was present, no additional hours should be included. The prevailing wage rates for the asbestos handlers and laborers who worked at the Amsterdam bus depot should be split between 45% asbestos handler rates and 55% mason tender rates.

4. The complainants are entitled to maximum interest, at the annual

rate of 16%, for two years from the date the wages and benefits were payable.

5. Respondents’ should be assessed a civil penalty of 20% of the total

violation.

6. For their willful nature of underpayment and the falsification of payroll records, respondents should be debarred from all governmental contracts within New York State for five years.

RECOMMENDATION

I recommend that the petition be granted, that respondents be found to have violated

Section 220 of the Labor Law. I also recommend that a new audit be prepared, in accordance

with the above findings, to determine the amount of the violation.

John B. Spooner Administrative Law Judge August 22, 2013 SUBMITTED TO: JOHN C. LIU Comptroller APPEARANCES: DEBORAH E. SEIDENBERG, ESQ. Attorney for Petitioner

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KING & KING, LLP Attorneys for Respondents BY: PETER KUTIL, ESQ.

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THE OFFICE OF THE COMPTROLLER OF THE CITY OF NEW YORK --------------------------------------------------------------------}( In the matter of the Complaint -against- COLONIAL ROOFING COMPANY, INC., Contractor Stipulation of Settlement Labor Law File No. 20040607 247 48th Street, Brooklyn, NY 11220 VEAP SELA, Shareholder/Officer 115 Meade Loop, Staten Island, NY 10309 ADRIANA SELA, Shareholder/Officer 115 Meade Loop, Staten Island, NY 10309 KATHLEEN SELA, Shareholder/Officer 115 Meade Loop, Staten Island, NY 10309 for a violation of New York State Labor Law§ 220.

---~----------------------------------------------------------------}( IT HEREBY IS STIPULATED AND AGREED by and between Colonial Roofing Company, Inc. ("Colonial"), Veap Sela, Adriana Sela, Kathleen Sela, and the Office of the Comptroller of the City of New York ("Comptroller") that: 1. Following a hearing and a report and recommendation from the New York City Office of Administrative Trials and Hearings pursuant to Section 220 (8) and Section 220-b (2-c) of the New York State Labor Law, Colonial, Veap Sela, Adriana Sela, Kathleen Sela hereby consent and agree that an Order be made and filed by the Comptroller with the following findings: a. The Manhattan and Bronx Surface Transit Operating Authority awarded Colonial contract number C-33050, which required structural roof repair at the Eastern Building of Amsterdam Bus Depot in the borough of Manhattan (hereinafter referred to as the “MaBSTOA Contract"). b. The New York City Transit Authority awarded Colonial contract number 03C8631, which required roof repairs at various bus depots within the City of New York (hereinafter referred to as the "NYCTA Contract"). c. Pursuant to the MaBSTOA Contract and the NYCTA Contract, Colonial performed roof repairs at the Amsterdam Bus Depot and various other bus depots from May 2003 through September 2006. d. Colonial failed to pay prevailing wages and supplements to its employees, classified as asbestos handlers, mason tenders, carpenters (building commercial), electricians A, and roofers and employed on the MaBSTOA Contract and the NYCTA Contract, resulting in a total underpayment in the amount of $85,034.01 as set forth in the attached Summary of Underpayment.

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e. Colonial owes interest to said employees in the amount of $10,204.08 as set forth in the attached Summary of Underpayment. f. Colonial owes the further sum of $4,761.90 as a civil penalty, at the rate of five percent of the total underpayment and interest. g. The failure of Colonial to pay prevailing wages and supplements was a willful violation and involved the falsification of payroll records for the purposes of subdivision 3(b) of New York State Labor Law § 220-b. h. Veap Sela, Adriana Sela, and Kathleen Sela are either officers of Colonial who knowingly participated in the willful failure to pay prevailing wages and supplements and the falsification of payroll records, or are one of the five largest shareholders of Colonial who own or control at least ten percent of the outstanding stock of Colonial, for the purposes of subdivisions 2(g) and 3(b) of New York State Labor Law § 220-b. 2. This determination involves the falsification of payroll records and, pursuant to subdivision 3(b) of New York State Labor Law § 220-b, Colonial, its successor, or any substantially owned affiliated entity of Colonial, any of the partners of Colonial if Colonial is a partnership, any officer of Colonial who knowingly participated in this violation and any shareholder who owns or controls at least ten percent of the outstanding stock of Colonial, including Veap Sela, Adriana Sela, and Kathleen Sela, are barred from submitting a bid on, or from being awarded, any public work contract, or subcontract, with the state, any municipal corporation or public body for a period of five years from the date of this determination. 3. Upon execution of this Stipulation of Settlement, Colonial agrees to pay the Comptroller the sum of $60,000.00, by certified or cashier's check payable to the "New York City Comptroller." Colonial agrees to pay the Comptroller the additional sum of $40,000.00, by certified or cashier's check payable to the "New York City Comptroller,'' by July I, 2014. 4. Upon receipt by the Comptroller of payment in full as set forth in Paragraph 3, Colonial, Veap Sela, Adriana Sela, Kathleen Sela, and their sureties shall have no further liability to the Comptroller under Article 8 of the New York State Labor Law regarding work performed by the employees listed in the attached Summary of Underpayment pursuant to the MaBSTOA Contract and the NYCTA Contract. 5. If Colonial fails to make payment in full to the Comptroller by July I, 2014, Colonial, Veap Sela, Adriana Sela, and Kathleen Sela agree that they shall owe additional interest to each employee listed in the attached Summary of Underpayment at the rate of sixteen percent per annum on the full amount of the underpayment from June 8, 2006 until the date of payment. Colonial Roofing Company, Inc: By: Veap Sela, President Veap Sela, Individually Kathleen Sela, Individually Adriana Sela, Individually Office of the Comptroller: By: Constantine P. Kokkoris, Chief, Bureau of Labor Law Michael Turilli, Counsel, Bureau of Labor Law

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SO ORDERED AND DETERMINED New York City Comptroller Dated: 2/5/14

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SUMMARY OF UNDERPAYMENT COLONIAL ROOFING CO, INC.

FILE#: 20040607

UNDERPAYMENT INTEREST TOTAL THROUGH 06/08/06 UNDERPAYMENT WITH INTEREST $481.87 $57.82 $539.69 $437.11 $52.45 $489.56 $210.79 $25.29 $236.08 $3,522.35 $422.68 $3,945.03 $10,603.98 $1,272.48 $11,876.46 $2,178.41 $261.41 $2,439.82 $724.47 $86.94 $811.41 $626.41 $75.17 $701.58

$569.13 $68.30 $637.43 $481.87 $57.82 $539.69 $4,062.02 $487.44 $4,549.46 $11.88 $1.43 $13.31 $6,894.72 $827.37 $7,722.09 $188.63 $22.64 $211.27 $29.71 $3.56 $33.27 $2,583.70 $310.04 $2,893.74 $1,891.22 $226.95 $2,118.17 $1,747.56 $209.71 $1,957.27 $1,062.99 $127.56 $1,190.55 $269.02 $32.28 $301.30 $956.13 $114.74 $1,070.86 $18.58 $2.23 $20.81 $3,041.17 $364.94 $3,406.11 $1,245.79 $149.49 $1,395.28 $63.69 $7.64 $71.33 $4,417.51 $530.10 $4,947.61 $61.63 $7.40 $69.02 $4,748.68 $569.84 $5,318.52 $19,962.49 $2,395.50 $22,357.99 $11.88 $1.43 $13.31 $1,148.33 $137.80 $1,286.13 $3,480.45 $417.65 $3,898.10 $1,704.42 $204.53 $1,908.95 $1,962.99 $235.56 $2,198.55 $1,963.58 $235.63 $2,199.21 $23.77 $2.85 $26.62 $1,645.10 $197.41 $1,842.52 $85,034.01 $10,204.08 $95,238.10 Civil Penalty 5% $4,761.90 $100,000.00 (each row represents an underpaid employee – there are 37 rows/underpaid employees in all).