Settlement reached in wage theft case: Nearly $230,000 restitution for underpaid NYC condo security guards

New York Attorney General Letitia James
New York Attorney General Letitia James in Sept. 2022.
AP Photo/Brittainy Newman

New York Attorney General Letitia James and New York City Comptroller Brad Lander have announced a significant settlement totaling almost $230,000 with a contracting agency and the Board of Managers of a New York City condominium building for violating labor laws by failing to pay workers the prevailing wage required by New York law.

The settlement stems from a joint investigation conducted by the Office of the Attorney General (OAG) and the Office of the New York City Comptroller, which revealed that Allied Universal Security Services (Allied Universal) underpaid security guards it was contracted to provide at the 540 West 28th Street Condominium in Chelsea from 2016 to 2019. The underpayment resulted in some workers being deprived of almost $30,000 each in fair pay.

“Every New Yorker deserves to be compensated fairly and fully for their hard work,” said Attorney General James. “For years, Allied Universal swindled their workers out of their hard-earned wages while the owners of the building where they worked benefited from a lucrative tax break. Now, these workers will finally be paid what they are owed. I want to thank Comptroller Lander for his partnership in this investigation, and we will continue to hold employers accountable for wage theft to ensure all New Yorkers are paid fairly.”

The Condominium had received a Section 421-a tax break in 2011, which mandated that its owners pay building service employees prevailing wages. However, an agreement with Allied Universal, a private security and staffing company, led to the underpayment of security guards.

The investigation found that Allied Universal failed to pay the security guards the wages owed to them under prevailing wage rules from September 2016 to February 2019. Seven employees were affected, with some missing out on tens of thousands of dollars in fair pay.

As a result of the settlement, Allied Universal will pay restitution totaling $229,718.48, which will be distributed entirely to the affected employees. Additionally, Allied Universal must conduct an audit of its contracts at all other New York City buildings and certify annually to the OAG that all its employees are being paid the prevailing wage at properties benefitting from a 421-a tax break.

Attorney General James emphasized the importance of cracking down on wage theft and highlighted previous successful efforts, including recovering millions of dollars for various groups of workers, such as Uber and Lyft drivers, nail salon workers, and employees of other businesses who were victims of wage theft and other labor law violations.

New Yorkers who suspect they have been victims of wage theft or other labor law violations are encouraged to contact the OAG by filing a confidential complaint online or calling (212) 416-8700.

This settlement serves as a reminder to employers of the consequences of failing to adhere to labor laws and underscores the commitment of law enforcement agencies to ensure fair treatment and just compensation for workers across New York City.

“We take our responsibility to enforce prevailing wage laws seriously, to protect workers from companies that try to cheat them out of the wages they have earned,” said New York City Comptroller Brad Lander. “Today’s settlement proves that companies cannot escape accountability for exploiting their workers. I’m proud that our Bureau of Labor Law worked in partnership with Attorney General Letitia James’ team on this case to ensure the security guards at Allied Universal get the pay they deserved.”

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