NYCHA firm in wage scam
THE HOUSING Authority is handing taxpayer dollars to a private contractor accused of allowing construction workers to be cheated out of millions of dollars, theDaily News has learned.
The U.S. Department of Labor in May charged MDG Design & Construction with violating a slew of wage and labor laws on a $60 million federal housing project on the Lower East Side, and moved to ban the company from bidding for federal jobs for up to three years.
Three workers on that project and others filed a class-action lawsuit against the firm in October. They told The News they were entitled to more than $50 an hour in wages and benefits, yet received as little as $50 a day and were told to hide from inspectors.
Yet the New York City Housing Authority last month proudly announced its selection of MDG to fix 874apartments citywide.
“We would hope that when a contractor is under investigation, there would be a heightened sense of scrutiny,” said Lloyd Ambinder of Virginia & Ambinder LLP, lawyer for the workers.
MDG principal Michael Rooney disputes the charges. He said alleged underpayments on the Grand Street Guild project were made by subcontractors without MDG’s knowledge, and pointed to a state-of-the-art compliance program the firm recently created.
“MDG has zero tolerance for labor law violations,” he said.
But the workers said MDG is part of an industrywide problem. Once, when inspectors visited the Grand Street Guild site, a supervisor locked workers in a room, they said. Another time, they said an MDG supervisor told them to leave for an hour.
“The supervisor told us to stop a moment because there were people asking about wages,” said plaintiff Miguel Cuaya, 33.
MDG and its subcontractors were required to pay prevailing wages because the project used taxpayer funds. But some workers were paid as little as $10 an hour, allowing subcontractors to pocket more than $5 million, federal investigators found.
NYCHA now says its selection of thecompany is not yet final.
MDG and its subcontractors have requested hearings with an judge to dispute the Department of Labor charges.