AG rules that Brooklyn warehouse owners pay $3 million in wage lawsuit

Stephon Johnson | 11/14/2019, 11:48 a.m.
Owners of a Brooklyn warehouse will have to pay out for wage theft.
Letitia James Contributed

Owners of a Brooklyn warehouse will have to pay out for wage theft.

New York Attorney General Letitia James and New York City Comptroller Scott Stringer announced a settlement of up to $3 million with developers and landlords of a luxury apartment building in Downtown Brooklyn for not following New York State prevailing wage requirements.

Mica Gabe Brooklyn LLC and Brooklyn Warehouse 180 LLC, owners of 180 Nassau Street in Brooklyn, will pay nearly $415,000 in back wages and interest to their building service employees and around $2.5 million in damages to the city and the state for obtaining a tax break under New York’s Section 421-a program under fraudulent pretenses. They also failed to follow the program’s prevailing wage requirement. A portion of the damages will go to 32BJ SEIU for blowing the whistle on the scandal.

Kyle Bragg, president of 32BJ SEIU, said that other employers should take notice to do right by their employees.

“This is a huge victory, not only for the hardworking men and women who have kept Brooklyn Warehouse clean, safe and functioning for tenants, but also for the families and communities that rely on them,” stated Bragg. “The back wages will help Brooklyn Warehouse’s concierge, superintendent, doormen, porters and other building service workers get back on their feet after being grossly underpaid.”

Section 421-a of the New York Real Property Tax Law grants tax breaks on certain new multi-family buildings. Section 421-a requires any project receiving the tax exemption to be subject to local rent stabilization laws and (when projects contain more than 50 units) requires developers to either pay building service employees prevailing wages or set aside affordable housing units.

“Swindling workers out of their hard-earned wages will never go unanswered by my office,” stated James. “Not only did these landlords fraudulently enrich themselves and steal from taxpayers, but did so while underpaying their workers. We are holding these defendants accountable and will continue to protect workers’ rights by making sure that developers and landlords who receive these specific tax incentives live up to their end of the bargain by paying workers what they’re owed.”

According to the Attorney General’s Office, Mica Gabe paid newly hired doormen a $12 hourly wage instead of the $17.58 prevailing wage, paid a newly hired superintendent a $17.50 hourly wage instead of a the $24.26 hourly wage, and underpaid and failed to provide supplemental benefits to building service employees since March 2016.

“An honest day’s work deserves an honest day’s pay, and across the city, our investigations have found employers who are receiving property tax exemptions without holding up their end of the bargain for their employees,” said Stringer in a statement.

Brooklyn Warehouse is also required to ensure the prevailing wage regulations are followed in the future and will provide annual wage reports to the Office of the Attorney General. They also must show that any subsequent purchaser agrees to comply with Section 421-a prevailing wage requirements.

“When buildings receive tax abatements in our city, there is a basic expectation that they will follow the law and respect their workers’ rights,” stated Bragg. “We hope this settlement serves as a warning to others in our city who would look to cut costs by undercutting workers’ wages. As building service workers across the state fighting to win expansions of the prevailing wage law, it’s important to hold contractors and building owners accountable to the existing laws that already guarantee some workers the living wages and benefits that they deserve.”