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Legislative Memo

Johnny Evers
Director of Government Affairs
T 518.465.7511, ext. 204
www.bcnys.org

BILL:

S.6576 (Savino) / A.8071 (Abbate)

Support

SUBJECT:

Relates to Including Off-Site Custom Fabrication as Public Work for the Purposes of Prevailing Wage Payment

 

DATE:

June 12, 2017

 

The Business Council of New York State, the state’s leading statewide business and industry association, strongly opposes this legislation that would expand the scope of prevailing wage to include fabrication work done off-site by changing their classification from “material suppliers” to prevailing wage labor.

By mandating that "custom fabrication" be subject to prevailing wages, the “fabrication of woodwork, cases, cabinets or counters and the fabrication of electrical, plumbing, heating, cooling, ventilation or  exhaust  duct systems,  and mechanical insulation” by contractors and subcontractors would be shifted from the scope of materials providers to prevailing wage labor contractors.

Rather than engaging local materialmen to provide fabricated construction components to job sites, an entire industry engaged in providing such materials would be forced pay prevailing wages. This arbitrary move severely impacts local manufacturing, inflates the cost of projects to the public, and places New York firms at a competitive disadvantage with neighboring states. 

The legislation even goes so far as to state that preparation and/or manufacturing of components “shall include custom fabrication and the drafting of such fabrication whether or not the custom fabrication or drafting thereof is done on the public works site.” Therefore contractors preparing parts off-site are subject to prevailing wages, certified payroll, and certifications (all due within 30 days under this legislation) for their work. The record keeping alone and the segregation of work off-site at companies and on sites undertaking multiple jobs, creates a tremendously costly and time consuming commitment to document exactly what person performed what job for what length of time.  

Since prevailing wages are often based on union wages and the expensive legacy costs of benefits, the impact of this legislation on taxpayers is higher costs and likely less work being completed. 

This legislation is another infringement upon the private sector economy of New York State by impinging upon manufacturing through wage shifts related to fabrication costs. Rather than treating material providers as such, this legislation mandates the payment of prevailing wages including “fringe” costs heavily burdened by expensive legacy costs.

The legislation also references the public works subject to these new provisions including “public benefit corporation” and “any third party acting upon behalf of any public entity.” As in legislation proposed this year (S. 2975 / A.5498) this legislation could be another attempt to classify any projects being undertaken with any public funds as a public work.

By changing the status of an entire industry this legislation would increase the cost of construction done on many public job sites in New York State.  

For these reasons The Business Council urges the legislature to reject this proposal.