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Legislative Memo

Heather Briccetti
Vice President, Government Affairs
T 518.465.7517 x203
www.bcnys.org

BILL:

A.404-A (John) / S.632-A (Fuschillo)

Support

SUBJECT:

Utility Street excavation prevailing wage

 

DATE:

February 10, 2010

 

The Business Council opposes this bill which would mandate utility companies and their contractors to pay public works-related prevailing wage to all their employees working on projects requiring street opening permits.   

Requiring utilities to pay “prevailing wages” will increase utility's cost of necessary infrastructure upgrades and repairs, and these increased costs will ultimately be paid by their business and residential customers. 

There is no compelling reason to treat these utility projects as “public works” for prevailing wage purposes.  Moreover, prevailing wage rates are typically based on union contracts, which reflect circumstances and conditions that may be unique to those parties. Under existing law, the “prevailing wage” represents one of the final products of extensive negotiations between labor and management involving potentially dozens of wage and non-wage issues. To impose these negotiated wages into the increasingly competitive energy and communications industries is inappropriate, antithetical to competition, and likely only to create upward pressure on consumer prices.

The bill would also mandate that utility companies and their contractors enter into agreements with the state, county or municipal entity specifying that only “competent workers” be employed on a project requiring issuance of a permit to use or open a street.  This provision is vague, duplicative and counterproductive.  The determination that a worker is “competent” is one that is best made by the employer.  Additionally, the bill as written is fundamentally flawed in that it provides no criteria as to what might constitute “competence” and fails to indicate when or by whom such judgments are to be made and enforced

The addition of language which would vest the Department of Labor with enforcement powers is inappropriate.  Section 220 relates to Public Works projects, whereas the utility and telecom industries are both highly competitive and largely private sector. 

The imposition of wage mandates on these industries, already struggling with additional costs imposed by the State, including the 18-a surcharge in the 2009-2010 Executive Budget, the MTA payroll tax in the MTA region, and the proposed expansion of the local gross receipts tax, is ill-timed and will only further burden both the employers and the consumers. 

For these reasons, the Business Council is strongly opposed to A. 404-A/ S. 632-A.