A history of labor-law violations has not kept a major New York City-based general contractor from working on lucrative federal contracts in the city, according to reports.
Lettire Construction Corp. is currently managing two multimillion-dollar projects in the Bronx, following a July 26 settlement with the U.S. Department of Labor that required the company to guarantee payment of approximately $960,000 in back wages and fringe benefits for workers employed by its subcontractors.
|Lettire Construction is still working on federally funded projects in New York City. Shown here is Hobbs Court, an affordable housing project where Lettire and 16 subcontractors violated numerous federal labor laws.|
DOL initially sought to debar Lettire and its president, Nicholas Lettire, from bidding or working on federally funded projects for three years, but the final settlement did not call for that. Instead, three of the company’s subcontractors were debarred, and proceedings are pending against two others.
The company did not respond to requests for comment.
Under Close Watch
Now, Lettire Construction is handling two housing projects for the state’s Office of Mental Health, with price tags of $10.4 million and $11.6 million, reports relate.
Labor officials said working on the Bronx projects does not violate the terms of its settlement decree with the agency; however, the company is being watched closely.
“If they violate the terms of the settlement with the DOL, we can go back to court and seek debarment,” according to a DOL spokesperson.
Union officials also have their eyes on the general contractor; as some have criticized the firm for continuing to work on taxpayer-funded projects.
“Despite all the evidence of the irresponsible and illegal business practices that Lettire engages in, public money is still going its way,” Richard Weiss, communications director for the Mason Tenders District Council, told the New York Daily News.
“It is unconscionable that public money would be used in such a way,” he said.
‘Entirely in Compliance’
Despite the scrutiny, the company says it is fully abiding by the terms of the settlement with a “state-of-the-art” compliance program and labor monitoring, according to the Daily News.
“We have taken the steps necessary to ensure our compliance and that of our subcontractors,” the company told the news bureau. “We are not only entirely in compliance with the letter and spirit of all relevant laws and regulations, but also an industry model for compliance and transparency.”
For years, Lettire was the “go-to contractor” for the city’s Department of Housing Preservation and Development. Then, in 2009, the firm came under investigation.
Labor Violations Uncovered
The two-year investigation by DOL’s Wage and Hour Division at two federally funded housing projects in East Harlem concluded that Lettire and 16 of its subcontractors “willfully violated wage, benefit, certified payroll and other requirements.”
Specifically, DOL said it had found:
• Employees working more than 60 hours per week without proper payment;
• Contractors failing to pay required prevailing wages and overtime compensation;
• Inaccurate or falsified payroll records to the government;
• Inaccurate records of hours worked;
• Failure to pay for all hours worked; and
• Improperly classified workers, resulting in the underpayment of wages and fringe benefits.
As a result, the DOL initiated debarment proceedings against Lettire and his company, seeking a three-year ban on bidding or working on federally funded projects. The July settlement did not include debarment for Lettire, but several subcontractors who worked on the Hobbs Court and Ciena projects were not so lucky.
DOL obtained three-year debarments against Fairmont Industries, Sant-Tec Electric and Finest Security Service.
Other debarment actions are pending against Enviro & Demo Masters Inc. and Gladiators Contracting Corp. and their principals. The companies are owned by the same individual. A DOL spokesperson said post trial documents are due in October, but it could take the administrative law judge up to a year to make a final decision regarding debarment.
A Settlement and a Warning
In a statement, Secretary of Labor Hilda L. Solis said her agency would “not hesitate to pursue legal action, including debarment, to ensure employees working on federally funded projects are properly paid under the law.”
She also said the Wage and Hour Division’s NYC District Office had been investigating possible violations on a “project-wide basis,” focusing on the payment practices of contractors and subcontractors on given projects, rather than investigating individual companies.
The settlement requires Lettire and his company to, among other things:
• Take affirmative steps to ensure its own and its subcontractors’ future compliance, including investigating prospective subcontractors;
• Guarantee payment for some of its subcontractors’ violations as determined through administrative and court proceedings;
• Guarantee payment for any future violations committed by its subcontractors on federally funded local, state and federal prevailing-wage projects;
• Hire a monitor approved by the Wage and Hour Division for at least three years to conduct regular compliance reviews of the company and its subcontractors; and
• Establish internal controls for timekeeping and payroll.
“The settlement makes absolutely clear that responsibility for complying with the federal prevailing wage laws rests with Lettire Construction and Nicholas Lettire,” said Nancy J. Leppink, deputy administrator of the Wage and Hour Division.
“And the agreement requires them to take those actions that any ‘high road’ contractor should be taking to ensure its compliance and the compliance of its subcontractors with federal law on federal taxpayer funded projects.”