Frequently Asked Questions
Article 8 (Construction)
The FAQ's listed below pertain to general information about Public Work.
| Topic | Question | Answer |
|---|---|---|
| Public Work | What is Public Work? | A three-prong test is applied to determine whether a particular project is public work and subject to the prevailing wage requirements of Labor Law § 220 and article I, § 17 of the State Constitution. First, a public agency must be a party to a contract involving the employment of laborers, workmen, or mechanics. Second, the contract must concern a project that primarily involves construction-like labor and is paid for by public funds. Third, the primary objective or function of the work product must be the use or other benefit of the general public. |
| Public Work | Who makes the determination whether a project is "Public Work"? | Generally, projects for construction, reconstruction or maintenance done on behalf of a public agency (entity) are public work. In instances where there is a question regarding whether this condition exists, the Bureau of Public Work will make a determination based on the project details. |
| Public Work | Is work performed for IDAs considered "Public Work"? | IDAs or Industrial Development Authorities are public authorities. Construction performed for the IDA itself is public work and requires the payment of prevailing wage rates. Prevailing wage requirements do not apply to private construction projects which are financed by IDAs through the issuance of tax-exempt industrial revenue bonds. |
| Public Work | Is HUD financed-housing work "Public Work"? | Generally, prevailing wages are required to be paid on HUD-assisted projects. However, there are exceptions to this general rule. Article 8 does not apply on projects assisted by HUD under the U.S. Housing Act of 1937 when the New York State prevailing wage is greater than the prevailing wage established by HUD. |
| Public Work | Is "maintenance work" subject to Article 8? | Yes, maintenance work involving the employment of laborers, workers or mechanics is subject to Article 8. Building service workers, i.e., janitorial services, are covered under Article 9 of the New York State Labor Law. |
| Public Work | Is "warranty” or “insurance claim” work subject to Article 8? | The fact that there is no charge for work which is being performed pursuant to a warranty or insurance claim does not change the underlying statutory obligation to pay prevailing rates. |
| Public Work | Can a contractor be prohibited from bidding or being awarded a public work project? | The New York State Labor Law prohibits contractors who have been debarred for violations of Article 8 from bidding on or being awarded public work projects for five years. A contractor is debarred when two final determinations have been rendered within any consecutive six-year period that such entity has willfully failed to pay the prevailing rate, or one final determination has been rendered involving the falsification of payroll records or the kickback of wages and/or supplements. (Article 8, Section 220-b, subd. 3b) |
| Public Work | Does the Commissioner of Labor enforce the prevailing rate requirements on public work projects in New York City? | The Commissioner of Labor enforces the prevailing wage requirements on all projects let by the state or its political subdivisions with the exception of projects let by the City of New York. For New York City public work projects, the New York City Comptroller is responsible for the enforcement of Article 8. Any complaints or questions on public work projects let by New York City should be addressed to: Office of the New York City Comptroller Bureau of Labor Law One Centre Street, Room 651 New York, New York 10007 Email: [email protected] Website: http://comptroller.nyc.gov/services/for-the-public/prevailing-wage/wage-schedules/ |
| Annualization | What is annualization? | Annualization simply refers to the time frame (annual) over which contributions to benefit plans are divided to calculate an hourly credit toward the amount an employer is required to pay according to the prevailing wage schedule. Total annual contributions per employee are divided by the total annual hours worked by that employee, on both public and private jobs. |
| Annualization | When referring to annualization, what time period is used? | The Department will generally look to the time frame used by the employer, i.e. fiscal year, calendar year, plan year, etc. If the employer has not utilized a specific time frame to calculate their credit, in most instances the Department will use a calendar year. An employer needs to be consistent in using the same twelve-month period year to year. |
| Annualization | How can I provide the required hourly supplement amounts listed in the wage schedule to my employee? |
The hourly amount can be provided in cash in the employee’s weekly paycheck when working on a public work project. Paying the required supplement amount weekly in cash with the employee’s wages fulfills the requirement under Article 8; or
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| Annualization | How can I determine the hourly cash credit for supplements provided? |
In order to calculate the hourly cash credit, the Department’s regulation on supplements provides the formula for making that determination. a) Determine the actual annual contribution made for supplements for each employee. b) Determine the total annual hours worked by each employee on both public and private work. c) Divide the actual contribution or cost in (a) by the total number of hours worked in (b). Once that credit is determined, if there is a deficiency between the required supplement amount and the hourly credit amount, it must be made up weekly with the employee’s wages. Where such proof of total hours worked by each employee is not provided by the employer, the Commissioner of Labor will: 1. divide the amount in (a) above by 2080 hours (8 hours per day x 5 days per week x 52 weeks); or 2. divide the amount in (a) above) by 1820 hours (7 hours per day x 5 days per week x 52 weeks) where proof is provided establishing that the employee worked only 7 hours per day. |
| Annualization | Does an employer receive credit for contributions to plans that have waiting periods to qualify for health insurance benefits or pension plans with extended vesting schedules? |
Yes. The New York State Department of Labor (NYS DOL) does not regulate waiting periods, vesting schedules, etc. That responsibility lies with the United States Department of Labor’s Employee Benefit Security Administration. The NYS DOL will verify that: a. The plan is a bona fide plan; and b. The employee is a plan participant; and c. The monies claimed to have been contributed on behalf of each employee have in fact been contributed. |
| Annualization | Does an employer have to provide a full range of benefits such as pension, health insurance, dental, etc., or can they just provide one or a combination of some? | It is the employer’s choice as to the type and level of particular benefit they provide as long as they calculate any contributions to bona fide benefit plans according to the NYS DOL regulation. |
| Annualization | Would a cafeteria plan comply with the annualization requirement? | Yes. A true cafeteria plan, where the total dollar value of the supplement amount is provided to the employee and the employee is provided the option or vehicle to purchase their own benefits, is considered the same as cash. |
| Annualization | Are there any “benefits” that an employer is not allowed to take credit for when calculating supplemental benefit cost and contributions? |
Yes. The following are some items which do not qualify as a supplemental benefit for the purposes of complying with the Article 8: Travel expenses such as meals and lodging Use of company vehicle or gas, toll and vehicle reimbursements Meal allowances Reimbursement for tools or company provided equipment Uniforms or uniform cleaning If you have a question on whether or not an item you provide would qualify for credit towards your supplemental benefit requirement, please contact the Bureau of Public Work. |
| Classification of Workers | How does DOL determine whether the "building" rate or the "heavy/highway" rate should be used for particular work? | Prevailing rates are based on collectively bargained agreements. The Department utilizes those agreements to determine the rate that covers the type of work activity in question. |
| Classification of Workers | How does DOL determine which rate applies to a particular task? |
The Bureau of Public Work looks at all factors, including:
What happens when two different trade unions claim the same work (jurisdictional dispute)? The Department again would look at all the above-listed factors when two different trade unions claim the same work. |
| Classification of Workers | May contractors request an opinion from the Bureau of Public Work when there is a classification question as to which trade and rate to use prior to bid? | Yes. Requests should be in writing and include sufficient information regarding the work in question. All requests should be forwarded to the Public Work office nearest where the project takes place. |
| Classification of Workers | If an employee is working in more than one classification of work during the same day or during the same week, how should a contractor report this on his payroll records? | The contractor and every subcontractor shall keep original payrolls or transcripts thereof showing the hours and days worked by each worker, the occupation at which he/she worked, the hourly wage paid and the supplements paid or provided. [Section 220, subd. 3-a (a)] |
| Complaints, Investigations, Hearings, Stipulations, Appeals and Penalties |
Who may file a prevailing wage complaint? Are complaints kept confidential? | Any person interested or any employee organization or the Commissioner of Labor on his or her own initiative may cause a compliance investigation to be made to determine whether the contractor or a subcontractor has paid the prevailing rate of wages and supplements. During an investigation, all efforts are made to keep the name of the complainant confidential. |
| Complaints, Investigations, Hearings, Stipulations, Appeals and Penalties |
How is a complaint filed and with whom? | Complaints are filed in writing and should be submitted to the Bureau of Public Work. |
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How is a prevailing wage investigation commenced? What records will DOL request from a contractor? | Subsequent to its receipt of a complaint or on its own initiative, the Bureau of Public Work will request certified payroll records, daily time records, proof of payment of wages, i.e., cancelled checks and proof of the payment and/or providing of supplemental benefits. |
| Complaints, Investigations, Hearings, Stipulations, Appeals and Penalties |
When will an audit normally be commenced? | Upon receipt of all requested information from the contractor. |
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What is a Stipulation? | A stipulation is used when a contractor who has underpaid prevailing rates agrees with the Department’s findings and waives its right to a hearing on the issues. |
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In what circumstances would an administrative hearing be held? | An administrative hearing is held when a contractor disagrees with the Department’s findings. |
| Complaints, Investigations, Hearings, Stipulations, Appeals and Penalties |
Once the Commissioner issues a final Order and Determination, what is the process for appealing this determination? | Any aggrieved party may file an appeal pursuant to Article 78 of the Civil Practice Law within 30 days from the date said determination was filed. Said proceeding shall be commenced directly in the State Appellate Division of the Supreme Court. |
| Complaints, Investigations, Hearings, Stipulations, Appeals and Penalties |
What is a "willful" violation and how is willfulness determined? |
For purposes of paragraph 6 of subdivision 3 of Section 220-b of the Labor Law which pertains to the debarment of contractors from performing public work, a contractor has willfully violated Article 8 if it knows or should have known that it failed to pay the prevailing rates of wages and supplements. There are several circumstances that could constitute willful behavior: The following is a partial listing:
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What penalties may be assessed against a contractor for underpayment of prevailing wages? | Interest of up to 16% from the date of underpayments to the date of restitution and a penalty up to 25% of the wages, supplements and interest due. |
| Complaints, Investigations, Hearings, Stipulations, Appeals and Penalties |
What is the liability of a prime contractor for a subcontractor’s underpayment? | When evidence indicates a non-compliance or evasion on the part of a subcontractor, the prime contractor is responsible for such non-compliance or evasion. (Section 223). |
| Hours of Work | When is payment for overtime required on New York State public work? | At a minimum, all work performed on a public work project in excess of eight hours in any one day or more than five days in any workweek is overtime. However, the specific overtime requirements for each trade or occupation on a public work project may differ. The specific overtime requirements for each trade or occupation are contained in the prevailing rate schedules issued for public work projects. |
| Hours of Work | May workers for a contractor work four 10-hour days without being paid overtime? | No. All work in excess of eight hours in a day is overtime. (Article 8, Section 220, subd. 2) |
| Hours of Work | Are "coffee breaks" considered time worked? | Rest periods of 20 consecutive minutes or less are considered as time worked upon a public work project. Rest periods include coffee breaks and time for snacks, but do not include bona fide meal periods. |
| Hours of Work | Does the New York State prevailing wage law require payment for "show up time"? | When an employee reports directly to the public work project and is informed that his/her services are not needed, no payment is required. If they are required to wait, they must receive the prevailing rate for the time spent at the job site. |
| Hours of Work | If a worker receives different hourly rates during the course of a day because he is performing different tasks, what overtime rate is paid when overtime pay is required? | The prevailing rate for the occupation the employee is working on at the time the overtime hours are worked. |
| Payment of Wages & Supplements | Are foremen or supervisors required to be paid prevailing wages when they are "working with the tools" or when they are strictly supervising the work? | Supervisors and/or foremen working with the tools must be paid at the prevailing rate for the classification of work being performed. When strictly overseeing workers, supervisors or foremen are not covered under Article 8 prevailing rate requirements. |
| Payment of Wages & Supplements | Are owners of the business required to be paid the prevailing wage rate when they “work with the tools” on a job site? |
§. Sole proprietor/owner-operators? § Partnerships? § Corporations? Determining the status employer/employee of each of the above is dependent upon the factual situation presented. A decision could be predicated upon one or a combination of factors. You should contact the Bureau of Public Work if you have any questions regarding these areas. |
| Payment of Wages & Supplements | Are independent contractors excluded from coverage under Article 8? | Legitimate independent contractors are excluded from coverage under Article 8. The Labor Law does not define an independent contractor; however, court decisions have held that the common law tests of "master and servant" are to be applied in making a determination. Under common law tests, all factors concerning the relationship between the two parties will be taken into consideration when making a determination whether someone is an employee or an independent contractor. Possession of liability insurance or the title “DBA” does not in and of itself make a person an independent contractor. |
| Payment of Wages & Supplements | Are “off-site” manufacturing or fabrication operations subject to the prevailing wage law? | The prevailing wage and supplements requirements of Section 220 of the Labor Law are not applicable to work on materials used in connection with a public work project, where such work is not performed at or about the site of the project, and is not customarily and normally performed at such site. Where a supply yard, facility or “borrow pit” is set up for a specific public work project, the construction of and all work at or in connection with the supply yard facility or borrow pit is subject to Section 220. |
| Payment of Wages & Supplements | Are drivers hauling asphalt and/or concrete to and from portable batch plants required to be paid prevailing rates? | Individuals who are employed as drivers hauling asphalt and/or concrete to and from portable batch plants established for the sole purpose of supplying public work projects are required to be paid prevailing rates. |
| Payment of Wages & Supplements | Are drivers hauling asphalt and/or concrete from existing commercial plants subject to the payment of prevailing rates? |
When, based upon the circumstances in a locality, the Bureau of Public Work determines that asphalt and concrete batch plants are as a matter of course not built to supply public work projects, investigators shall enforce the requirement that employers pay prevailing wages and supplements to drivers hauling concrete and asphalt to and from a public work project when such materials have originated in plants not more than 50 miles from such project. As of March 1, 2002, the ONLY area in which the Bureau has established that drivers hauling asphalt and/or concrete from commercial plants to or from a public work project will be covered by a prevailing rate is Nassau and Suffolk counties on Long Island. |
| Payment of Wages & Supplements | Are drivers delivering materials (other than asphalt and/or concrete) to a public work site subject to payment of prevailing wages? |
Where materials or supplies other than asphalt and/or concrete are delivered to a public work site and dropped or stockpiled, the hauling, dropping and/or stockpiling of such materials is not subject to prevailing wage requirements. |
| Payment of Wages & Supplements | Are drivers who haul away construction debris from the job site subject to the payment of prevailing rates? | Prevailing rates are only required for the time spent on the construction "site" unless the debris is taken to a dedicated site. In the latter instance, prevailing rates are required for all time worked. |
| Payment of Wages & Supplements | What about the use of apprentices? | No employee shall be deemed to be an apprentice unless the employee is individually registered in an apprenticeship program that is duly registered with the Commissioner of Labor. (Section 220, subd 3). |
| Payment of Wages & Supplements | How are apprentice ratios determined? | Apprentice ratios are determined by occupation and are outlined in the Apprenticeship Training Program established by the New York State Department of Labor and the Apprentice Program sponsor. |
| Payment of Wages & Supplements | Can trainees or helpers or pre-apprentices be used on a public work project? | They can only be used if they are paid at the journeyworker rate. Only registered apprentices can be paid less than the journeyworker rates. |
| Payment of Wages & Supplements | How may prevailing wage supplements be provided to workers? | Cash payment in lieu of supplements Through irrevocable contributions to a fund, plan or program Any combination of the above. |
| Payment of Wages & Supplements | May overpayments of supplemental benefits be credited towards an underpayment of wages? | No. Workers must receive the full prevailing wage rate of pay for every hour worked. Any supplemental benefits paid into a fund, plan or program in excess of the hourly supplemental benefit rate listed in the applicable wage schedule will not count as a credit towards any underpayment of the prevailing wage rate. |
| Payment of Wages & Supplements | How is the hourly cash equivalent of supplements determined? |
To determine the hourly cash equivalent of supplements provided to or on behalf of workers, the Department will:
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| Prevailing Wages & Supplements | How often are prevailing rates determined and when do they take effect? | The prevailing rate of wages and supplements are determined annually on July 1 of each year and are effective through June 30, i.e. July 1, 2001 – June 30, 2002. (Article 8, Section 220, subd. 5a) When you review a schedule for a particular occupation, your attention should be directed to the dates above the column rates. These are the dates that additional adjustments become effective. Any error corrections or updates in the annual determination will be posted to the Department’s website on the first business day of each month. Contractors are responsible for paying these updated rates retroactive to July 1st. |
| Prevailing Wages & Supplements | Is the contractor held responsible to pay the newly determined rates even if the new rates are not included in the wage schedule? | Yes |
| Prevailing Wages & Supplements | How are prevailing rates determined? | Prevailing rates in a locality are determined by virtue of collective bargaining agreements between bona fide labor organizations and employers of the private sector, provided that said employers employ at least 30% of workers in the same trade or occupation in the locality where the work is being performed. (Section 220, subd 5a) |
| Prevailing Wages & Supplements | What is the locality to which specific wage rates apply? | "Locality" means such areas of the state described and defined for a trade or occupation in the current collective bargaining agreements between bona fide labor organizations and employers of the private sector. (Section 220, subd. 5d) |
| Prevailing Wages & Supplements | How does DOL determine which union or unions is the appropriate labor organization for determining prevailing rates? What if there is more than one collective bargaining agreement in a given locality? | The Department of Labor utilizes the collectively bargained agreements that were used in the previous year’s annual determination of prevailing rates, unless competent evidence is provided that the negotiated agreement does not cover 30% of workers in the same trade or occupation. Also see Section III - Classification of Workers. |
| Prevailing Wages & Supplements | What happens if a union does not report new rate information to DOL by May 31? | The prevailing rate from the previous year’s annual determination will be included in the new annual determination of prevailing rates. |
| Prevailing Wages & Supplements | May prevailing rate determinations be contested? | An employer may contest a determination by the fiscal officer. The employer must allege and prove by competent evidence that the actual percentage of workers, laborers, or mechanics covered by a collective bargaining agreement in the locality is below the required thirty per centum. |
| Prevailing Wages & Supplements | Are prime contractors required to provide subcontractors with prevailing wage schedules? | Yes. It is a violation for any contractor or its subcontractor to fail to provide to its subcontractor a copy of the schedule of wages and supplements specified in the contract as well as any annually determined rate issued subsequent to the schedule specified in the contract. (Section 220-a, subd. 1) |
| Prevailing Wages & Supplements | Are contractors required to file Labor Affidavits? | Before final payment is made by a public agency for any amounts due on a public work contract, the public agency shall require the contractor or subcontractor to file a statement in writing certifying to the amounts then due and owing from such contractor to or on behalf of any worker employed on the public work contract. (Article 8, Section 220-a) |
| Prevailing Wages & Supplements | What are the posting requirements for prevailing rates? | “The contractor and every subcontractor on public work contracts shall post in a prominent and accessible place on the site of the work a legible statement of all wage rates and supplements as specified in the contract to be paid or provided …" (Section 220, subd. 3-a) |
| Record Keeping Requirements | What payroll records are required to be maintained by contractors? | The contractor and every subcontractor shall keep original payrolls or transcripts thereof showing the hours and days worked by each worker, the occupation at which he/she worked, the hourly wages paid and the supplements paid or provided. [Section 220, subd. 3-a (a)] This includes all books and records pertaining to the rate of wages paid and supplements provided. |
| Record Keeping Requirements | What is a "certified payroll"? | Certified payrolls are original payrolls or transcripts thereof, subscribed and affirmed as true under the penalty of perjury. |
| Record Keeping Requirements | Are contractors and subcontractors required to submit payroll records to the public owner? | "Every contractor, and subcontractor, shall submit to the department of jurisdiction within thirty days after issuance of its first payroll, and every thirty days thereafter, a transcript of the original payroll records, as provided by this Article, subscribed and affirmed as true..." (Section 220, subd 3-a) |
| Record Keeping Requirements | How long are certified payroll records required to be kept by the contractor? | Contractors are required to maintain, for not less than six years, weekly certified payroll records. (Article 6, Section 195.4) |