Judlau Contracting faces massive wage penalty as court ruling puts HR wage compliance in the spotlight
A New York court upheld a $43.9 million wage ruling against a contractor, underscoring the critical importance of wage compliance for HR professionals.
On November 13, 2025, the Appellate Division, First Department, affirmed a Supreme Court ruling that awarded $43,924,202.36 to employees of Judlau Contracting, Inc. The workers, led by Rachel Herman, claimed they were underpaid on public works projects across New York City. The court’s decision sends a clear message: when it comes to prevailing wage laws, contractors – and their HR teams – are expected to get it right, no matter what.
At the core of the case was Judlau’s attempt to shift responsibility for wage shortfalls onto the City of New York and its agencies. The contracts between Judlau and the city, however, left no room for doubt. The court found that Judlau was solely responsible for making sure workers received the correct prevailing wages. Even if the city made mistakes in wage classifications or provided incorrect information, the burden remained with Judlau to ensure compliance.
The court also addressed Judlau’s argument that some of the damages were for work that didn’t qualify for prevailing wage rates. This issue had already been settled in earlier proceedings, and the judges saw no reason to revisit it. Additionally, Judlau challenged damages awarded to employees of Waterworks, a joint venture partner. The court rejected this, pointing out that Judlau was a partner in the venture and had submitted payroll records for those workers, making it responsible for their pay as well.
In a related lawsuit, Judlau and its affiliates tried to hold the city liable for any wage underpayments. That effort was dismissed. The court found that the contracts clearly assigned all wage-related risks and costs to Judlau. Claims of fraud, misrepresentation, and unjust enrichment were also dismissed as unsupported or duplicative.
This decision highlights the importance of understanding contract terms and maintaining airtight payroll practices, especially on public projects. The ruling makes it clear that employers can’t rely on agencies or partners to catch wage mistakes. HR teams must be proactive in ensuring compliance with all wage laws and contract requirements.
With nearly $44 million at stake, the outcome underscores the serious financial risks of noncompliance. For HR leaders, the lesson is straightforward: review your wage policies, double-check your contracts, and make sure every worker is paid what they’re owed. Courts are holding employers to a high standard, and the cost of getting it wrong can be enormous. This ruling is a strong reminder that in the world of public contracting, HR compliance isn’t just paperwork – t’s a bottom-line issue.
