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Montis Construction and their primary contractor BLH Construction, as implied by this augmented image from their website, agreed to a 5-year ban on bidding for NYC public projects because they were caught stealing from their workers.

Earlier this year Bronx-based Montis Construction was banned from bidding on New York City public contracts after city officials said its management stole wages from their workers.

The New York City Comptroller, Brad Lander, said that Montis and their primary contractor BLH Construction falsified payroll records to illegally pocket tens of thousands of dollars in wages. In addition to the ban Montis and BLH must pay $70,000 in backpay, interest, and a penalty, according to the case settlement.

The ban on bidding is a new penalty and one that has not been levied often enough, according to one person engaged in the bidding of construction projects here. He spoke to Union-Built Matters on condition of anonymity because he must work with some of these companies. “Montis has been banned from bidding on public projects, which is great. But this is a unique settlement between the prosecutor and Montis. An automatic ban for being caught stealing wages is not currently the law, and it should be,” he said.

Wage Theft Pays

He explained, “Even though wage theft is now a felony, too many contractors are still stealing wages from workers. They still believe they make money by doing it, even when they’ve been caught and penalized. They still come out ahead. A ban is the best way to correct bad behavior.”

He ticked off several large builders who have a record of wage theft and other crimes who continue to operate on and bid for large projects in New York City. “Trident has been accused of wage theft, of visa fraud, of insurance fraud, of racial discrimination. They’re one of the largest builders operating in the city today. RNC, another big one, has paid hundreds of thousands in wage theft penalties and has been tied to extortion and bid rigging. And IBK has been fined hundreds of thousands of dollars for serious safety violations.”

He asked, “How are they allowed to keep bidding on big projects? Is this who we want building our city?”

“How are they allowed to keep bidding on big projects? Is this who we want building our city?”

The Legislature Acts

In response to this reality, New York lawmakers recently proposed three new bills that would hinder the ability of wage theft violators to continue to do business in the state. The legislation was prompted by reports of rampant wage theft against New York workers published by Documented and ProPublica. The stories revealed that more than 127,000 New Yorkers have been victims of wage theft during a recent five-year period, but that the New York State Department of Labor was unable to recover $79 million in back wages owed to the workers.

“We knew from our conversations with labor and from our constituent service caseload that wage theft is a chronic problem,” said the bill's sponsor, NY State Senator Jessica Ramos. “We did not have the data to understand the scale of the issue in New York state until the ProPublica and Documented series came out last year.”

The legislation includes three bills. The first is aimed at the restaurant industry and would empower the New York State Liquor Authority to suspend liquor licenses for bars and restaurants that the Department of Labor has determined owe more than $1,000 in back wages to their workers.

The second bill, aimed at wage thieving builders, would enable the Department of Labor to place a stop-work order on any business that has a wage theft claim of at least $1,000.

The third bill allows the New York State Department of Taxation and Finance to suspend a business’s certificate of authority — which allows it to conduct business — in cases where wage theft exceeds $1,000.

The Impact

“Each year, more than $1 billion is stolen from the pockets of hardworking New Yorkers by unscrupulous employers, often targeting the workers with the fewest resources to fight back,” said Assemblywoman and co-sponsor Linda Rosenthal. “If businesses refuse to do the right thing and pay their workers what they are owed, New York State should hold them to account.”

The bills were praised by worker advocates and urban studies academics, including James Parrott, director of economic and fiscal policies at The New School’s Center for New York City Affairs. “These bills are needed to put more teeth into New York’s enforcement efforts,” Parrott said. “We owe it to hard-working low-wage workers and law-abiding employers.”

Our insider praised the bills and pointed out that its effects could be far-reaching. “A lot of non-union contractors rely on wage theft to lower their project bids. That steals opportunities from the contractors who play by the rules. Particularly union contractors, who do better and more efficient work, by the way. We need to do all we can to take wage theft away from non-union. Whatever it takes.”

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