Comptroller Sues Contractor for 421-a Wage Violations

Building service employees missed out on over $140,000 in pay.

NYC Comptroller’s Bureau of Labor Law recently filed lawsuits against divisions of Planned Companies for failure to pay prevailing wage and supplemental benefits to building service employees at two 421-a buildings. The lawsuits allege that the company owes a total of $145,331.81 in back wages, interest, and civil penalties.

The 421-a program, which expired in June 2022, requires that owners receiving the tax break pay building service workers prevailing wages and benefits, which are minimum rates set annually by the city. The tax break’s replacement program, 485-x, also requires such wage standards for building service workers and mandates new wage requirements for construction workers on various projects. Prevailing wage rates for building service work are required by New York State Labor Law Article Nine for contracts with New York City government agencies and by New York State Real Property Tax Law Section 421-a for certain buildings receiving tax exemption benefits. These rates are contained in the Building Service Employee Schedule.

The owner of the buildings hired Planned Companies to provide services such as cleaners, doorpersons, and security guards at their respective buildings. Based on complaints filed by employees at both buildings, the Bureau of Labor Law conducted two investigations that found that employees missed out on over $140,000 in pay. Both the owner and the building services contractor, Planned Companies, are liable.

In an earlier investigation from January 2020 into Planned Companies and the building owner revealed that Planned Companies didn’t pay prevailing wages as required by law at the same building. The owner was jointly and severally liable for any wage underpayment and, as a result, the owner agreed to pay over $450,000 in lost wages to the building service employees at that time.