IN RE: Charles S. CHA (2022)

Determination of respondents, dated August 12, 2020, which affirmed the Hearing Officer's decision to the extent of ordering compliance with articles 6 and 19 of the Labor Law and imposing a penalty, unanimously confirmed, the petition denied, and the proceeding brought pursuant to CPLR article 78 (transferred to this Court by order, Supreme Court, New York County [Arthur F. Engoron, J.], entered March 28, 2021), dismissed, without costs.

Petitioners failed to sustain their burden before the Industrial Board of Appeals (IBA) of demonstrating error in the Commissioner of Labor's order (see Matter of Baudo v. New York State Indus. Bd. of Appeals, 154 A.D.3d 535, 536, 61 N.Y.S.3d 887 [1st Dept. 2017]).  Where, as here, petitioners are found to have inadequate or unreliable records, the Department of Labor (DOL) may use other evidence to calculate the amount of wage underpayment, even though the results may be approximate, and such other evidence may include employees’ accounts of the hours worked and tasks performed (id.;  Matter of Alphonse Hotel Corp. v. Sweeney, 251 A.D.2d 169, 169–170, 674 N.Y.S.2d 351 [1st Dept. 1998]).

Substantial evidence supports the IBA's conclusion that petitioners’ records were unreliable (see 300 Gramatan Ave. Assoc. v. State Div. of Human Rights, 45 N.Y.2d 176, 180, 408 N.Y.S.2d 54, 379 N.E.2d 1183 [1978]).  The evidence presented at the hearing established not only that petitioners’ records omitted required information, but also that they contained inconsistent and erroneous information.  The IBA therefore rationally relied on the employees’ accounts of the hours worked to calculate the amount of wage underpayment (Baudo, 154 A.D.3d at 536, 61 N.Y.S.3d 887).  Similarly, substantial evidence supports the IBA's determination that petitioners failed to prove a good-faith basis to believe that the underpayments complied with the law (Labor Law §§ 198[1–a], 218).  We find no basis to disturb the IBA's credibility determinations.

A civil penalty was appropriate, and also supported by substantial evidence.  Petitioners’ argument that respondents failed to properly consider and weigh the criteria set forth in Labor Law § 218(1) was not raised in the petition and is therefore waived (see Labor Law § 101[2]).  In any event, the record establishes that respondents did, in fact, consider the statutory criteria.  Further, the sanction imposed is not disproportionate to the offense and did not violate either the excessive fines clauses of either the United States Constitution or the New York State Constitution (see Matter of Pell v. Board of Educ. of Union Free School Dist. No. 1 of Towns of Scardsdale & Mamaroneck, Westchester County, 34 N.Y.2d 222, 240, 356 N.Y.S.2d 833, 313 N.E.2d 321 [1974];  Prince v. City of New York, 108 A.D.3d 114, 119, 121, 966 N.Y.S.2d 16 [1st Dept. 2013]).

The IBA also correctly imposed interest on the unpaid wages, which it was obliged to do at the statutory rate (see Labor Law § 219[1];  Banking Law § 14–a;  Matter of Marchionda v. Industrial Bd. of Appeals of State of N.Y., Dept. of Labor, 119 A.D.3d 1342, 1343, 989 N.Y.S.2d 214 [4th Dept. 2014]).  As to petitioners’ contention that interest should be stricken because of DOL's alleged delay in bringing the hearing, they failed to preserve that argument (see Matter of Curry v. New York City Hous. Auth., 161 A.D.3d 578, 579, 78 N.Y.S.3d 18 [1st Dept. 2018]).

We have considered petitioners’ remaining contentions and find them unavailing.