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Legislative Memo

Frank Kerbein
Director, Center for Human Resources
T 518.465.7511 x210
www.bcnys.org

BILL:

S.1075 (Maziarz) / A.5234 (Wright)

Support

SUBJECT:

Utility Street Excavation Prevailing Wage 

 

DATE:

June 17, 2014

 

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 in both the energy delivery and telecommunications sectors to pay "prevailing wages" will increase the cost of necessary infrastructure upgrades and repairs, and these increased costs will ultimately be paid by utility customers in the form of increased costs or a reduction in infrastructure upgrades. There is no compelling reason to treat these utility projects as "public works" for prevailing wage purposes, "utility companies" are highly regulated privately owned, often public traded companies, that pay state and local taxes, and a significant amount of real property taxes. Simply, "utility companies" are not state agencies, nor are they public authorities, they are private enterprise.

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 telecommunications sectors 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. Utility employees and contractors hired by utilities are already held to high standards and are the best trained and most skilled to work on and around utility facilities. Utilities maintain an excellent safety record. Utilities require specific training and testing requirements for those who work on telecommunications, natural gas and electric facilities. In addition, the Public Service Commission monitors all utilities' reliability, making it in the best interest of the utilities to ensure that the quality of work performed on utility facilities is beyond competent.

Additionally, the term "competent worker" is vague, duplicative and counterproductive. The bill as written 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 telecommunications industries are both highly competitive and largely private sector.

In today's economy, individuals, families, and businesses rely on affordable energy, telephone connectivity, television and the Internet for quality natural gas and electric delivery, news, social connectedness and daily company operations. Added expense and delays will negatively these impact service subscribers statewide.  

For these reasons, The Business Council is strongly opposed to S.1075/A.5234 and urges that it not be enacted by the New York State Legislature.