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EMPLOYEES OF SUBCONTRACTOR CAN SUE FOR THE PREVAILING WAGE REQUIRED BY LABOR LAW 220 AS THIRD PARTY BENEFICIARIES OF THE PRIME CONTRACT (FIRST DEPT).

The First Department affirmed the denial of defendant employer’s (SLSCO’s) motion to dismiss the plaintiff employees’ breach of contract complaint. The complaint alleged that SLSCO and the subcontractor, PMJ, which employed plaintiffs, breached the prime employment contract by failing to pay the prevailing wage for work done for the Department of Environmental Protection (DEP). The court noted the employees were third party beneficiaries of the contract and the clause in the contract which purported to prohibit third-party actions seeking the prevailing wage would be void as against public policy:

Plaintiffs are employees of PMJ. They commenced this action for breach of contract against PMJ and SLSCO, predicated upon a third-party contract beneficiary theory, alleging that PMJ failed to pay them prevailing wages as required by the terms of the prime contract … . …

Labor Law § 220(3) provides, in pertinent part, that wages paid to laborers, workers, or mechanics on a public works project shall be the prevailing rate of wages in that locality, and that the public works contracts, including subcontracts thereunder “shall contain a provision that each laborer, workman or mechanic, employed by such contractor, subcontractor or other person about or upon such public work shall be paid the wages herein”. This statute “has as its entire aim the protection of workingmen against being induced, or obliged, to accept wages below the prevailing rate” and “must be construed with the liberality needed to carry out its beneficent purposes”… . In keeping with this liberal reading of the statute, the courts of this state have consistently held that, in public works contracts, a subcontractor’s employees have both an administrative remedy under the statute as well as a third-party right to make a breach of contract claim for underpayment against the general contractor … . Wroble v Shaw Envtl. & Infrastructure Eng’g of N.Y., P.C., 2018 NY Slip Op 08061, First Dept 11-27-18

EMPLOYMENT LAW (LABOR LAW, PREVAILING WAGE, EMPLOYEES OF SUBCONTRACTOR CAN SUE FOR THE PREVAILING WAGE REQUIRED BY LABOR LAW 220 AS THIRD PARTY BENEFICIARIES OF THE PRIME CONTRACT (FIRST DEPT))/LABOR LAW (PREVAILING WAGE, PREVAILING WAGE, EMPLOYEES OF SUBCONTRACTOR CAN SUE FOR THE PREVAILING WAGE REQUIRED BY LABOR LAW 220 AS THIRD PARTY BENEFICIARIES OF THE PRIME CONTRACT (FIRST DEPT))/CONTRACT LAW (EMPLOYMENT LAW, THIRD PARTY BENEFICIARIES, LABOR LAW, EMPLOYEES OF SUBCONTRACTOR CAN SUE FOR THE PREVAILING WAGE REQUIRED BY LABOR LAW 220 AS THIRD PARTY BENEFICIARIES OF THE PRIME CONTRACT (FIRST DEPT))/THIRD PARTY BENEFICIARIES (CONTRACT LAW, EMPLOYMENT LAW, LABOR LAW, EMPLOYEES OF SUBCONTRACTOR CAN SUE FOR THE PREVAILING WAGE REQUIRED BY LABOR LAW 220 AS THIRD PARTY BENEFICIARIES OF THE PRIME CONTRACT (FIRST DEPT))

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