City Sues Owners Over 421a Wages

City officials are going after two building owners who allegedly failed to pay building service workers prevailing wages despite receiving the property tax break 421a.

Comptroller Brad Lander’s office filed a complaint against LLCs tied to Midwood Management and Texas-based Patrinely, and a firm they both hired, the Planned Companies, alleging that the companies failed to pay cleaners, doorpersons, elevator operators and/or other service workers the proper wage rates.

Together, the companies owe more than $140,000 in back wages, benefits and fines, according to the complaints.

Sam Spilkes LLC, which is tied to Midwood, hired Planned Companies at its 82-unit building at 282 South Fifth Street in Williamsburg. Planned Companies allegedly underpaid building service workers by about $72,700 in wages and benefits between December 2018 through June 2020.

This complaint followed similar allegations against the companies at the same building. Midwood settled with the city in January 2020 by agreeing to pay more than $450,000 in unpaid wages.

The second complaint alleges that Patrinely hired Planned Companies at 546 West 44th Street, a 280-unit building in Hell’s Kitchen. There, Planned Companies did not pay roughly $72,600 it owed building service workers between March 2019 and February 2021, the complaint states.

Representatives for Midwood, Patrinely and Planned Companies did not return messages seeking comment.

“This isn’t our first investigation against Planned Companies, and we cannot stand by while workers continue to be cheated out of their hard-earned wages,” Claudia Henriquez, director of workers’ rights at the Comptroller’s Bureau of Labor Law, said in a statement.

The 421a program, which expired in June 2022, requires that owners receiving the tax break pay building service workers prevailing wages and benefits, which are minimum rates set annually by the city. The tax break’s replacement program, 485x, also requires such wage standards for building service workers and mandates new wage requirements for construction workers on various projects.

The city has resolved nine cases involving 421a prevailing wage violations since 2022, and has recovered more than $4.3 million, according to the Comptroller’s office. These cases tend to involve construction workers, though, not those in building service.

In February, the comptroller’s office filed a suit against BLDG Management, accusing the company of shortchanging construction workers $32.2 million for work between June 2015 and August 2019. This month, a state court sided with the developer in its lawsuit against the state, which alleged that allowing the city’s Office of Administrative Trials and Hearings to enforce these 421a rules was unconstitutional, Bisnow reported.

The two new complaints were also filed with OATH by the Comptroller’s Bureau of Labor Law, but the office indicated that the decision in the BLDG case does not affect the new lawsuits because they deal with different wage standards.