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Legislative Memo

Darren Suarez
Director of Government Affairs
T 518.694.4461
www.bcnys.org

BILL:

S.8773 (Gianaris) / A.4871 (Titus)

Support

SUBJECT:

Prevailing Wage Requirement for Street Opening Permit

 

DATE:

May 18, 2018

 

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. Specifically, this legislation would extend the prevailing wage mandate to utility companies and/or their contractors to whom a permit to open a street.

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 wage mandates on the increasingly competitive energy and telecommunications market it 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.  

The legislation’s proposed requirement that these projects comply with Section 220 of the Labor Law would effectively extend the obligation under State Finance Law Section 137 to post payment bonds to contracts under which any municipality had issued street opening or use permits. The posting of a payment bond have proven to be difficult for small businesses to obtain.

For these reasons, the Business Council is strongly opposed to this legislation.