| Matter of A. Uliano & Son. Ltd. v New York State Dept. ofLabor |
| 2012 NY Slip Op 05514 [97 AD3d 664] |
| July 11, 2012 |
| Appellate Division, Second Department |
| In the Matter of A. Uliano & Son. Ltd. et al.,Petitioners, v New York State Department of Labor et al.,Respondents. |
—[*1] Eric T. Schneiderman, Attorney General, New York, N.Y. (Patricia Kakalec, SethKupferberg, and Terri Gerstein of counsel), for respondents.
Proceeding pursuant to CPLR article 78 and Labor Law § 220 (8) to review adetermination of the New York State Department of Labor and Colleen Gardner, Commissionerof Labor, dated February 23, 2011, which adopted findings of fact and conclusions of law of ahearing officer also dated February 23, 2011, after a hearing, inter alia, finding that thepetitioners willfully failed to pay prevailing wages and supplements to certain employees on apublic work project and falsified payroll records, and directed the petitioners, among otherthings, to pay the principal sum of $825.96 to their employee John Bradley for underpayment ofwages and supplemental benefits.
Adjudged that the petition is granted to the extent that the provision of the determinationdirecting the petitioners to pay the principal sum of $825.96 to their employee John Bradley forunderpayment of wages and supplemental benefits is annulled, the petition is otherwise denied,the determination is otherwise confirmed, and the proceeding is otherwise dismissed on themerits, without costs or disbursements, and the matter is remitted to the respondents for thecomputation of the amount of the petitioners' underpayments to John Bradley in accordanceherewith.
Judicial review of an administrative determination made after a hearing required by law, andat which evidence is taken, is limited to whether that determination is supported by substantialevidence (see CPLR 7803 [4]; 300 Gramatan Ave. Assoc. v State Div. of HumanRights, 45 NY2d 176, 179 [1978]). "[A] determination is regarded as being supported bysubstantial evidence when the proof is so substantial that from it an inference of the existence ofthe fact found may be drawn reasonably" (300 Gramatan Ave. Assoc. v State Div. of HumanRights, 45 NY2d at 179 [internal quotation marks omitted]). "[I]t is not the function of thereviewing court to weigh the evidence or substitute its own judgment for that of anadministrative body to whose expertise a subject matter has been entrusted, but rather todetermine whether there is a reasonable fulcrum of support in the record to sustain the body'sfindings" (Matter of Furey v County of Suffolk, 105 AD2d 41, 43-44 [1984] [internalquotation marks omitted]; see Matter ofR.I., Inc. v New York State Dept. of Labor, 72 AD3d 1098, 1098-1099 [2010]).[*2]
While Labor Law § 220 "provides a specificprocess for calculating the 'prevailing rate of wage' (see Labor Law § 220 [5] [a]),it does not require a specific procedure for the Commissioner [of Labor] to use in evaluating theappropriate trade or occupation to assign to particular work" (Matter of Lantry v State of New York, 6 NY3d 49, 55 [2005]). Inthe absence of such a statutory directive, a reviewing court "will uphold the Commissioner'smethodology as long as it is not unreasonable" (id. at 55). Moreover, "tradeclassifications 'are a matter given to the expertise of the Department [of Labor] and courts arestrongly disinclined to disturb them, absent a clear showing that a classification does not reflectthe nature of the work actually performed' " (id., quoting Matter of General Elec. Co.v New York State Dept. of Labor, 154 AD2d 117, 120 [1990], affd 76 NY2d 946[1990] [some internal quotation marks and citations omitted]; see Matter of R.I., Inc. v NewYork State Dept. of Labor, 72 AD3d at 1099).
Here, it was permissible for the respondents to determine that the petitioners' employees,including John Bradley, should have been classified as "laborers" for work on the subject publicworks project on certain days, and as "operators" for work on other days. However, therespondents failed to offer any explanation for adopting the daily classifications set forth in theaudit that was prepared by an investigator from the respondent New York State Department ofLabor (hereinafter the DOL). In classifying Bradley's work as that of an "operator" on certaindays and that of a "laborer" on other days, the investigator ignored his own observation ofBradley's work, and selectively and indiscriminately used information from several unioncontribution forms (cf. Matter of D.D.G. Gen. Contr. Corp. v Hartnett, 149 AD2d 819,820-821 [1989]). As Bradley's classification on each day was relevant to the calculation of theunderpayment of the wages and supplemental benefits to which he was due, the respondents'determination that Bradley was underpaid in the principal sum of $825.96 for all of his work onthe project was not supported by substantial evidence. This determination must, therefore, beannulled and the matter remitted to the respondents for a new determination of the dailyclassification of Bradley's work, and a reassessment thereafter of the amount of wages andsupplemental benefits owed by the petitioners to Bradley.
However, the respondents' determination regarding the number of hours worked by each ofthe subject employees, including Bradley, was supported by substantial evidence. "When anemployer fails to keep accurate records as required by statute, the Commissioner [of Labor] ispermitted to calculate back wages due to employees by using the best available evidence and toshift the burden of negating the reasonableness of the Commissioner's calculations to theemployer" (Matter of Mid Hudson Pam Corp. v Hartnett, 156 AD2d 818, 821 [1989];see Matter of Hy-Tech Coatings v New York State Dept. of Labor, 226 AD2d 378, 379[1996]; see also Anderson v Mt. Clemens Pottery Co., 328 US 680, 687-688 [1946]). Asthe enforcement provision of the prevailing wage statute is remedial in nature, and since itspublic purpose is to protect workers, the New York State Commissioner of Labor is entitled "tomake just and reasonable inferences in awarding damages to employees even while the resultsmay be approximate" (Matter of Mid Hudson Pam Corp. v Hartnett, 156 AD2d at 820;see Matter of Hy-Tech Coatings v New York State Dept. of Labor, 226 AD2d at 379;Matter of L & M Co. v New York State Dept. of Labor, 171 AD2d 795 [1991]).Nevertheless, "the approximation must at least have some rational basis" in the record(Matter of John Schepanski Roofing & Gutters v Roberts, 133 AD2d 757, 758 [1987];see Matter of D.D.G. Gen. Contr. Corp. v Hartnett, 149 AD2d at 821).
In light of the petitioners' failure to produce complete and accurate payroll records, therespondents were entitled to adopt the figures set forth in the audit, which used informationobtained from investigatory interviews with the employees, as well as information contained in awage claim form filed with the DOL (see Matter of Emes Heating & Plumbing Contrs. vMcGowen, 279 AD2d 819 [2001]; Matter of Agency Constr. Corp. v Hudacs, 205AD2d 980 [1994]; Matter of Mid Hudson Pam Corp. v Hartnett, 156 AD2d at 820).Insofar as the petitioners contend that the respondents should have credited the evidence whichthey produced at the hearing regarding the number of hours worked by each employee, "[t]he lawis well settled that when there is conflicting testimony and questions of credibility, the reviewingcourt may not weigh the evidence or reject the administrative agency's determination ofcredibility" (Matter of Saitanis Enters. v Hines, 201 AD2d 738, 738-739 [1994]; seeMatter of Nicoletta v Hartnett, 157 AD2d [*3]922 [1990];Matter of Mid Hudson Pam Corp. v Hartnett, 156 AD2d at 820). Accordingly, thepetitioners failed to satisfy their burden of demonstrating that the method used to calculate thenumber of hours worked by each employee was unreasonable (see Matter of D & D Mason Contrs., Inc. vSmith, 81 AD3d 943, 944 [2011]; Matter of Hy-Tech Coatings v New York StateDept. of Labor, 226 AD2d at 379; Matter of Mid Hudson Pam Corp. v Hartnett, 156AD2d at 820).
Additionally, there was substantial evidence to support the respondents' determination thatthe petitioners willfully violated Labor Law § 220 by failing to pay prevailing wages andsupplements. All that is required in order to demonstrate a willful violation is proof that theemployer knew, or should have known, that it was violating the prevailing wage laws (seeMatter of R.I., Inc. v New York State Dept. of Labor, 72 AD3d at 1099; Matter of Nash v New York State Dept. ofLabor, 34 AD3d 905, 907 [2006]; Matter of Consolidated Masonry Contrs. v Angello, 2 AD3d 997[2003]). Here, the evidence in the record established a willful violation, in that it revealed thatthe petitioners were experienced contractors who were aware that the project was subject to theprevailing wage law, and that they had a prior history of underpayments (see Matter of R.I.,Inc. v New York State Dept. of Labor, 72 AD3d at 1099; Matter of Nash v New YorkState Dept. of Labor, 34 AD3d at 907; Matter of Sarco Indus. v Angello, 23 AD3d 715, 716 [2005]; Matter of Consolidated Masonry Contrs. vAngello, 2 AD3d 997 [2003]; Matter of Baywood Elec. Corp. v New York StateDept. of Labor, 232 AD2d 553, 555 [1996]).
Furthermore, there was substantial evidence to support the respondents' determination thatthe petitioners falsified payroll records (see Matter of Alca Indus. v McGowan, 258AD2d 704, 705 [1999]; Matter of Lapeka Constr. Corp. v Sweeney, 236 AD2d 538[1997]; Matter of Hy-Tech Coatings v New York State Dept. of Labor, 226 AD2d 378[1996]).
The petitioners' remaining contentions are without merit. Mastro, A.P.J., Angiolillo, Austinand Sgroi, JJ., concur.