A New York-based property management company will provide restitution to its Connecticut subcontractors and a civil penalty to the state under a settlement agreement resolving an investigation into the manner in which it calculated its bonuses, according to the attorney general.
Ferrandino & Son Inc. will pay $187,095 in restitution and $50,000 to the state. The company provides interior and exterior property maintenance services to over 100 commercial business sites in Connecticut.
The company entered into snow and ice removal contracts with Connecticut subcontractors and reported that its subcontractors would receive bonuses when there was an above average amount of snowfall. The bonuses were divided into three tiers, with the highest awarded when the actual snowfall was 20.1 inches or more above the 30-year historic snowfall rate.
The investigation found that the company’s pricing exhibits listed a 30-year average annual snowfall that was much higher than the actual amount according to meteorological sources. In some cases, the average was inflated about 30 inches over the actual average.
The state alleged that the structure made it much more difficult for subcontractors to become eligible for a bonus and many of them did not receive one or only received one at a lower tier.
“Connecticut’s small business owners deserve fair compensation for their hard work,” Attorney General George Jepsen said in a statement. “This investigation revealed that Connecticut-based subcontractors were being treated unfairly, in that they were paid less than what they were owed in light of the actual historical snowfall averages. I’m pleased that we were ultimately able to reach an agreement to provide restitution to the effected subcontractors in this case.”
Under the settlement agreement, Ferrandino & Son will provide restitution to its Connecticut subcontractors totaling $101,345.22 for the 2013-to-2014 snow season and totaling $85,750.68 for the 2014-to-2015 snow season. The company will also pay a civil penalty of $50,000, which will be deposited into the state’s general fund.
