N.Y. Labor Law § 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

benefit of laborers. 1. In case any interested person shall have

previously filed a protest in writing objecting to the payment to any

contractor or subcontractor to the extent of the amount or amounts due

or to become due to him for daily or weekly wages or supplements for

labor performed on the public improvement for which such contract was

entered into, or if for any other reason it may be deemed advisable, the

comptroller of the state or the financial officer of the municipal

corporation or other officer or person charged with the custody and

disbursement of the state or corporate funds applicable to the contract

for such public improvement may deduct from the whole amount of any

payment on account thereof the sum or sums admitted by any contractor or

subcontractor in such statement or statements so filed to be due and

owing by him on account of labor performed on such public improvement

before making payment of the amount certified for payment in any

estimate or voucher, and may withhold the amount so deducted for the

benefit of the laborers, workmen or mechanics whose wages or supplements

are unpaid or not provided, as the case may be, as shown by the verified

statements filed by any contractor or subcontractor, and may pay

directly to any person the amount or amounts shown to be due to him or

his duly authorized collective bargaining labor organization, as the

case may be, for such wages or supplements by the statements filed as

hereinbefore required, thereby discharging the obligation of the

contractor or subcontractor to the person or his duly authorized

collective bargaining labor organization receiving such payment to the

extent of the amount thereof, or

2. a. (1) When any interested person shall file a written complaint

with the fiscal officer, as herein defined, alleging unpaid wages or

supplements due for labor performed on a public improvement for which a

contract has been entered into, and said labor is alleged to have been

performed within the two-year period immediately preceding the date of

the filing of said complaint, or if, on the fiscal officer's own

initiative, unpaid wages or supplements appear to be due, the fiscal

officer shall immediately so notify the financial officer of the civil

division interested, or, if there are insufficient moneys still due to

the contractor or subcontractor to satisfy said wages and supplements,

including interest and penalty, the financial officer of another civil

division which has entered or subsequently enters into a public

improvement contract with the contractor or subcontractor, who shall

withhold from any payment due or earned the contractor or subcontractor

executing any public improvements, sufficient moneys to satisfy said

wages and supplements, including interest at the rate provided herein,

and any civil penalty that may be assessed as provided herein, pending a

final determination. The financial officer shall immediately confirm in

writing to the fiscal officer the amount of money withheld.

(2) If there are still insufficient moneys due or earned to the

contractor or subcontractor, as a result of work performed, to satisfy

such wages and supplements, including interest and penalties, the

financial officer shall immediately notify the fiscal officer, who may

issue a notice of intent to withhold any of the following:

(i) any substantially-owned affiliated entity or any successor or

subsidiary of the contractor or subcontractor;

(ii) any of the partners, if the contractor or subcontractor is a

partnership, or any of the five largest shareholders of the contractor

or subcontractor, as determined by the fiscal officer; or

(iii) any officer of the contractor or subcontractor who knowingly

participated in the violation of this article.

(3) The notice of intent to withhold shall provide that the fiscal

officer intends to instruct the financial officer, not less than ten

days following service of the notice by mail, to withhold sufficient

moneys to satisfy unpaid wages and supplements, including interest at

the rate provided in this article, and any civil penalty that may be

assessed as provided in this article, from any payment due or earned the

notified party under any public improvement contract pending final

determination. The notice of withholding shall provide that within

thirty days following the date of the notice of withholding the notified

party may contest the withholding on the basis that the notified party

is not a partner or top five shareholder of the subcontractor or

contractor, an officer of the contractor or subcontractor who knowingly

participated in the violation of this article, a substantially-owned

affiliated entity, or successor. If the notified party fails to contest

the notice of withholding, or if the fiscal officer, after reviewing the

information provided by the notified party in such contest, determines

that the notified party is a partner or top five shareholder, any

officer of the contractor or subcontractor who knowingly participated in

the violation of this article, or a substantially-owned affiliated

entity, or successor, the fiscal officer may instruct the financial

officer to withhold sufficient moneys to satisfy said wages and

supplements, including interest at the rate provided in this article,

and any civil penalty that may be assessed as provided in this article

from any payment due the notified party under any public improvement

contract pending the final determination.

(4) The financial officer shall immediately implement the notice of

withholding and confirm in writing to the fiscal officer the amount of

money to be withheld. If the notified party contests the withholding

after a withholding has been effected, and if the fiscal officer

determines, that the notified party is not a partner or top five

shareholder, an officer of the contractor or subcontractor who knowingly

participated in the violation of this article, or a substantially-owned

affiliated entity or successor, the fiscal officer shall immediately

notify the financial officer to release all payments being withheld from

the notified party and the financial officer shall implement the notice.

b. Moneys withheld pursuant to this section shall be held by the

financial officer for the sole and exclusive benefit of the workers

employed on said public improvement and for payment of any civil penalty

that may be assessed as provided herein and shall not be used for any

other purpose except upon court order. Any person, partnership,

association, corporation or governmental body who files a lien or

commences a judicial proceeding with respect to any monies withheld

pursuant to this section shall notify the fiscal officer in writing of

the lien or claim on or before the date of filing of the lien or

commencement of the judicial proceeding. In any proceeding to obtain

moneys withheld pursuant to this section by any person, partnership,

association, corporation or governmental body, the fiscal officer shall

have the right to appear and be heard.

c. The fiscal officer shall cause an investigation to be made to

determine whether any amounts are due to the laborers, workmen or

mechanics, or on their respective behalves, on such public improvement,

for labor performed after the commencement of the three-year period

immediately preceding the filing of the complaint or the commencement of

the investigation on his own initiative, as the case may be, and shall

order a hearing thereon at a time and place to be specified and shall

give notice thereof, together with a copy of such complaint, or a

statement of the facts disclosed upon such investigation, which notice

shall be served personally or by mail on all interested persons,

including the person complained against and upon the financial officer

of the civil division interested; such person complained against shall

have an opportunity to be heard in respect to the matters complained of,

at the time and place specified in such notice, which time shall be not

less than five days from the service of said notice. The fiscal officer

in such an investigation shall be deemed to be acting in a judicial

capacity and shall have the rights to issue subpoenas, administer oaths

and examine witnesses. The enforcement of a subpoena issued under this

section shall be regulated by the civil practice law and rules. Such

investigation and hearing shall be expeditiously conducted, and upon

such hearing and investigation, the fiscal officer shall determine the

issues raised thereon and shall make and file an order in his office

stating such determination and forthwith serve a copy of such order,

either personally or by mail, together with notice of filing, upon the

financial officer of the civil division interested, and the parties to

such proceedings and, if the fiscal officer be the comptroller or other

analogous officer of a city, upon the commissioner. Such order shall

direct payment of wages or supplements found to be due, including

interest at the rate of interest then in effect as prescribed by the

superintendent of financial services pursuant to section fourteen-a of

the banking law per annum from the date of the underpayment to the date

of the payment.

d. In addition to directing payment of wages or supplements including

interest found to be due, the order of the fiscal officer may direct

payment of a further sum as a civil penalty in an amount not exceeding

twenty-five percent of the total amount found to be due. In assessing

the amount of the penalty, due consideration shall be given to the size

of the employer's business, the good faith of the employer, the gravity

of the violation, the history of previous violations of the employer or

any successor or substantially-owned affiliated entity or any of the

partners if the contractor or subcontractor is a partnership or any of

the five largest shareholders of the contractor or subcontractor, as

determined by the fiscal officer, and any officer of the contractor or

subcontractor who knowingly participated in the violation of this

article, and the failure to comply with recordkeeping or other non-wage

requirements. Upon the fiscal officer's determination of the penalty,

where the fiscal officer is the commissioner, the penalty shall be paid

to the commissioner for deposit in the state treasury. Where the fiscal

officer is a city comptroller or other analogous officer, the penalty

shall be paid to said officer for deposit in the city treasury.

e. Upon the entry and service of such order, the financial officer of

the civil division interested shall pay to the claimant, from the moneys

due to the contractor or subcontractor, the amount of the claim as

determined by the fiscal officer and the amount of the civil penalty, if

any, shall be paid as provided herein, provided that no proceeding

pursuant to article seventy-eight of the civil practice law and rules

for review of said order is commenced by any party aggrieved thereby

within thirty days from the date said order was filed in the office of

the fiscal officer. Said proceeding shall be commenced directly in the

appellate division of the supreme court. Where the fiscal officer is the

commissioner, the civil penalty shall be paid to the commissioner for

deposit in the state treasury; where the fiscal officer is a city

comptroller or other analogous officer, the penalty shall be paid to

said officer for deposit in the city treasury. In the event that such a

proceeding for review is instituted, moneys sufficient to satisfy the

claim and civil penalty shall be set aside by the financial officer

interested as provided in paragraph b of this subdivision, subject to

the order of the court.

f. If the financial officer of the civil division interested fails to

pay to the claimant the amount of the claim as determined by the fiscal

officer within ten days after the expiration of the contractor's time to

commence a proceeding for review of the fiscal officer's order or, if

such a proceeding has been commenced, within ten days after entry and

service of a court order confirming the fiscal officer's order, the

civil division interested shall pay to the claimant interest on the

claim at the rate of interest then in effect as prescribed by the

superintendent of financial services pursuant to section fourteen-a of

the banking law from the date the financial officer was required to pay

the claim as provided herein to the date of payment; provided, however,

this paragraph shall not apply if the failure of the financial officer

of the civil division interested to pay the amount of the claim is

pursuant to court order.

g. When a final determination has been made in favor of a complainant

and the contractor or subcontractor found violating this article has

failed to make payment as required by the order of the fiscal officer,

and provided that no relevant proceeding for judicial review shall then

be pending and the time for initiation of such proceeding shall have

expired, the fiscal officer may file a copy of the order of the fiscal

officer containing the amount found to be due with the county clerk of

the county of residence or place of business of any of the following:

(i) any substantially-owned affiliated entity or any successor of the

contractor or subcontractor;

(ii) any of the partners if the contractor or subcontractor is a

partnership or any of the five largest shareholders of the contractor or

subcontractor, as determined by the fiscal officer; or

(iii) any officer of the contractor or subcontractor who knowingly

participated in the violation of this article; provided, however, that

the fiscal officer shall within five days of the filing of the order

provide notice thereof to the partner or top five shareholders or

successor or substantially-owned affiliated entity or other entity

determined to have violated any provision of subdivision five of section

two hundred twenty of this article or this subdivision; the notified

party may contest the filing on the basis that it is not a partner or

top five shareholder, any officer of the contractor or subcontractor who

knowingly participated in the violation of this article, or successor or

substantially-owned affiliated entity. If, after reviewing the

information provided by the notified party in support of such contest,

the fiscal officer determines that the notified party is not subject to

the provision of this paragraph, the fiscal officer shall immediately

withdraw his filing of the order.

The filing of such order shall have the full force and effect of a

judgment duly docketed in the office of such clerk. The order may be

enforced by and in the name of the fiscal officer in the same manner,

and with like effect, as that prescribed by the civil practice law and

rules for the enforcement of a money judgment.

h. When a final determination has been made against a subcontractor in

favor of a complainant and the contractor has made payment to the

complainant of any wages and interest due the complainant and any civil

penalty that has been assessed, and providing that no relevant

proceeding for judicial review shall then be pending and the time for

initiation of such proceeding shall have expired, the contractor may

file a copy of the order of the fiscal officer containing the amount

found to be due with the county clerk of the county of residence or

place of business of the subcontractor. The filing of such order shall

have the full force and effect of a judgment duly docketed in the office

of such clerk. The judgment may be docketed in favor of the contractor

who may proceed as a judgment creditor against the subcontractor for the

recovery of all monies paid by the contractor under such order.

Provided that no proceeding for judicial review shall then be pending

and the time for initiation of such proceeding shall have expired, the

commissioner may file with the county clerk of the county where the

employer resides or has a place of business the order of the fiscal

officer containing the amount found to be due. The filing of such an

order shall have the full force and effect of a judgment duly docketed

in the office of such clerk. The order may be enforced by and in the

name of the commissioner in the same manner, and with like effect, as

that prescribed by the civil practice law and rules for the enforcement

of a money judgment.

2-a. The fiscal officer shall make an inquiry as to the willfulness of

the alleged violation which is the subject of an investigation pursuant

to subdivision two of this section. In the event a formal hearing is

held pursuant to this section, the fiscal officer, upon a review of the

entire record and a finding of credible evidence, must make a

determination, as to the willfulness of such violation. No finding of

willfullness made pursuant to the provisions of this subdivision shall

be dispositive for the purposes of section one hundred ninety-eight-a of

this chapter or of the last undesignated paragraph of subdivision three

of section two hundred twenty of this article.

3. a. When a final determination has been made and such determination

is in favor of the complainant, said complainant may in addition to any

other remedy provided by this article, institute an action in any court

of appropriate jurisdiction against the person or corporation found

violating this article, any substantially-owned affiliated entity or any

successor of the contractor or subcontractor, any officer of the

contractor or subcontractor who knowingly participated in the violation

of this article, and any of the partners if the contractor or

subcontractor is a partnership or any of the five largest shareholders

of the contractor or subcontractor, as determined by the fiscal officer,

for the recovery of the difference between the sum, if any, actually

paid to him by the aforesaid financial officer pursuant to said order

and the amount found to be due him as determined by said order. Such

action must be commenced within three years from the date of the filing

of said order, or if the said order is reviewed in a proceeding pursuant

to article seventy-eight of the civil practice law and rules, within

three years after the termination of such review proceeding.

b. (1) When two final determinations have been rendered against a

contractor, subcontractor, successor, or any substantially-owned

affiliated entity of the contractor or subcontractor, any of the

partners if the contractor or subcontractor is a partnership, any

officer of the contractor or subcontractor who knowingly participated in

the violation of this article, any of the shareholders who own or

control at least ten per centum of the outstanding stock of the

contractor or subcontractor or any successor within any consecutive

six-year period determining that such contractor, subcontractor,

successor, or any substantially-owned affiliated entity of the

contractor or subcontractor, any of the partners or any of the

shareholders who own or control at least ten per centum of the

outstanding stock of the contractor or subcontractor, any officer of the

contractor or subcontractor who knowingly participated in the violation

of this article has wilfully failed to pay the prevailing rate of wages

or to provide supplements in accordance with this article, whether such

failures were concurrent or consecutive and whether or not such final

determinations concerning separate public work projects are rendered

simultaneously, such contractor, subcontractor, successor, or any

substantially-owned affiliated entity of the contractor or

subcontractor, any of the partners if the contractor or subcontractor is

a partnership or any of the shareholders who own or control at least ten

per centum of the outstanding stock of the contractor or subcontractor,

any officer of the contractor or subcontractor who knowingly

participated in the violation of this article shall be ineligible to

submit a bid on or be awarded any public work contract or subcontract

with the state, any municipal corporation or public body for a period of

five years from the second final determination, provided, however, that

where any such final determination involves the falsification of payroll

records or the kickback of wages or supplements, the contractor,

subcontractor, successor, or any substantially-owned affiliated entity

of the contractor or subcontractor, any partner if the contractor or

subcontractor is a partnership or any of the shareholders who own or

control at least ten per centum of the outstanding stock of the

contractor or subcontractor, any officer of the contractor or

subcontractor who knowingly participated in the violation of this

article shall be ineligible to submit a bid on or be awarded any public

work contract with the state, any municipal corporation or public body

for a period of five years from the first final determination.

(2) When any person or corporation, or any officer or shareholder who

owns or controls at least ten per centum of the outstanding stock of

such corporation, has been convicted of a felony offense for conduct

relating to obtaining or attempting to obtain, or performing or

attempting to perform a public work contract with the state, any

municipal corporation, public benefit corporation or public body, and

such felony offense is a violation of:

(i) this chapter; or

(ii) coercion in the first degree as defined in section 135.65 of the

penal law, grand larceny in the fourth degree as defined in section

155.30 of the penal law, grand larceny in the third degree as defined in

section 155.35 of the penal law, grand larceny in the second degree as

defined in section 155.40 of the penal law, grand larceny in the first

degree as defined in section 155.42 of the penal law, forgery in the

second degree as defined in section 170.10 of the penal law, forgery in

the first degree as defined in section 170.15 of the penal law, criminal

possession of a forged instrument in the second degree as defined in

section 170.25 of the penal law, criminal possession of a forged

instrument in the first degree as defined in section 170.30 of the penal

law, criminal possession of forgery devices as defined in section 170.40

of the penal law, falsifying business records in the first degree as

defined in section 175.10 of the penal law, tampering with public

records in the first degree as defined in section 175.25 of the penal

law, offering a false instrument for filing in the first degree as

defined in section 175.35 of the penal law, issuing a false certificate

as defined in section 175.40 of the penal law, insurance fraud in the

fourth degree as defined in section 176.15 of the penal law, insurance

fraud in the third degree as defined in section 176.20 of the penal law,

insurance fraud in the second degree as defined in section 176.25 of the

penal law, insurance fraud in the first degree as defined in section

176.30 of the penal law, aggravated insurance fraud as defined in

section 176.35 of the penal law, commercial bribing in the first degree

as defined in section 180.03 of the penal law, commercial bribe

receiving in the first degree as defined in section 180.08 of the penal

law, bribing a labor official as defined in section 180.15 of the penal

law, bribe receiving by a labor official as defined in section 180.25 of

the penal law, criminal impersonation in the second degree as defined in

section 190.25 of the penal law, criminal impersonation in the first

degree as defined in section 190.26 of the penal law, criminal usury in

the second degree as defined in section 190.40 of the penal law,

criminal usury in the first degree as defined in section 190.42 of the

penal law, scheme to defraud in the first degree as defined in section

190.65 of the penal law, bribery in the third degree as defined in

section 200.00 of the penal law, bribery in the second degree as defined

in section 200.03 of the penal law, bribery in the first degree as

defined in section 200.04 of the penal law, bribe receiving in the third

degree as defined in section 200.10 of the penal law, bribe receiving in

the second degree as defined in section 200.11 of the penal law, bribe

receiving in the first degree as defined in section 200.12 of the penal

law, rewarding official misconduct in the second degree as defined in

section 200.20 of the penal law, rewarding official misconduct in the

first degree as defined in section 200.22 of the penal law, bribe giving

for public office as defined in section 200.45 of the penal law, or the

attempted commission of any of the offenses set forth in this paragraph,

provided that such offense constitutes a felony; or

(iii) criminal solicitation in the second degree as defined in section

100.10 of the penal law, conspiracy in the fourth degree as defined in

section 105.10 of the penal law, conspiracy in the second degree as

defined in section 105.15 of the penal law, or criminal facilitation in

the second degree as defined in section 115.05 of the penal law,

provided that such offense is a felony and was committed in connection

with one or more of the crimes listed in clause (ii) of this

subparagraph; or

(iv) article twenty-two of the general business law; or

(v) assault in the second degree as defined in section 120.05 of the

penal law, assault in the first degree as defined in section 120.10 of

the penal law, reckless endangerment in the first degree as defined in

section 120.25 of the penal law, criminally negligent homicide as

defined in section 125.10 of the penal law, manslaughter in the second

degree as defined in section 125.15 of the penal law, manslaughter in

the first degree as defined in section 125.20 of the penal law and

murder in the second degree as defined in section 125.25 of the penal

law, provided that the victim was an employee of such person or

corporation and further provided that such offense arose from actions or

matters related to the protection of the health or safety of employees

at a work site;

such person shall be ineligible to submit a bid on or be awarded any

public works contract with the state, any municipal corporation, public

benefit corporation or public body for a period of five years from the

date of conviction.

* (3)(i) When any contractor, subcontractor, or person is listed by

the federal government as excluded from receiving federal contracts and

certain subcontracts, assistance or benefits, pursuant to 48 C.F.R.

Subpart 9-4, such contractor, subcontractor, or person shall be

ineligible to submit a bid on or be awarded any public work contract

with the state, any municipal corporation, public benefit corporation or

public body during such period of exclusion, unless the department

having jurisdiction determines, after public notice and comment, that

there is a compelling reason, consistent with 48 C.F.R. § 9.405, to

allow such contractor, subcontractor, or person to submit a bid or to be

awarded a particular public work contract. Public notice shall include

notice provided to the department, which shall post such notice on its

website.

(ii) When the fiscal officer determines that a contractor,

subcontractor or person is a "substantially owned-affiliated entity," as

defined by paragraph g of subdivision five of section two hundred twenty

of this article, in relation to a contractor, subcontractor, or person

ineligible to submit a bid or be awarded a public work contract under

clause (i) of this subparagraph, such substantially owned-affiliated

entity shall be ineligible to submit a bid or be awarded any public work

contract with the state, any municipal corporation, public benefit

corporation for the duration of the remaining period of exclusion of the

contractor, subcontractor, or person under clause (i) of this

subparagraph. In order for a substantially owned-affiliated entity to be

debarred pursuant to this clause, such substantially owned-affiliated

entity must have had substantial involvement in the day to day

management of the contractor, subcontractor or person debarred under

clause (i) of this subparagraph. Such substantially owned-affiliated

entity shall be provided with written notice from the fiscal officer of

the proposed determination and shall be afforded an opportunity to be

heard regarding the ineligible determination by the fiscal officer

within thirty calendar days of the written notice. In addition, the

department having jurisdiction may determine, after public notice and

comment, that there is a compelling reason, consistent with 48 C.F.R. §

9.405, to allow such substantially owned-affiliated entity to submit a

bid or to be awarded a particular public work contract. Public notice

shall include notice provided to the department, which shall post such

notice on its website.

(iii) Any determinations made pursuant to this subparagraph shall be

subject to review pursuant to article seventy-eight of the civil

practice law and rules.

* NB Repealed March 18, 2027

c. Nothing in this subdivision shall be construed as affecting any

provision of any other law or regulation relating to the awarding of

public contracts except that the ineligibility for submission of any bid

or receipt of any award of public work set forth in this chapter shall

not be subject to any mitigation or judicial abatement, including, but

not limited to, the provisions of article twenty-three of the correction

law, and such ineligibility shall continue in full force and effect for

the entire period set forth above.