Contract Procurement Committee Update - Final Executive Order 162 Implementation Plan
Staff Contact: Ken Pokalsky
December 28, 2017
Executive Order 162 Final Implementation Plan
The Cuomo administration posted its Executive Order 162 final implementation plan on the Empire State Development web site on Friday, 12/22/17. We have not seen or received any other notice or announcement.
Significant new or changed provisions include:
- Initial reports will be due after the first quarter of 2018, so after 4/1/18. Agencies are to set specific due dates 7 to 10 days after the end of the quarter, and will have discretion to provide a 30 day extension for initial report.
- Contractors and subs are required to report "gross wages," described as wages reported on employee's wage statements. The guidance includes a reference to the definition of “gross wages” in NYS tax rules (see below).
- Agencies are given discretion to apply alternative reporting periods, to determine the contractor's role in subcontractor compliance, and other unspecified aspects of reporting.
- The guidance contains several changes specific to construction contracts,
- Wage reporting will be quarterly, not monthly, while pre-existing workforce utilization reports will remain monthly (although the FAQ document still references monthly reports for construction contracts).
- Agencies have discretion to accept certified payroll reports on prevailing wage payments as sufficient to meet the requirements of the EO.
Most other provisions of the guideline, FAQ, instructions and forms did not change from what we reviewed in June, including the applicability date (contracts executed on or after 6/1/17), categories of exempt contracts, and applicability thresholds ($100,000 for construction contracts, $25,000 for others). Several modifications discussed with the administration were not applied, e.g., a di minimis threshold for sub-contractors.
We will work to set up a conference call with the state in early January to discuss this final guidance and ask questions about specific implementation and compliance issues.
In the meantime, I welcome any comments or questions on these guidance documents. (Note I will be out of the office the week between Christmas and New Year’s, but will be reviewing emails).
Some key provisions/issues of note, including areas where the implementation plan provides unclear or contradictory provisions:
- While the EO’s applicability provisions were not changed, the guidelines say that agencies have discretion to determine whether contractors should be required to collect compensation data based on the nature of the goods/services being contracted, how identifiable their workforce is, and “other relevant factors.”
- The guidance requires all reports to be submitted electronically, with each agency/authority to provide specific submission instructions. However, the guidance also says that prime contractors must either “collect reports completed by each subcontractor or require the submission of such reports . . . as directed by the applicable agency.” It is unclear how or under what circumstances contractors would be required to actually collect subcontractor reports. The FAQ document says that contractors are “responsible for collecting reports for each of [their] subcontractors,” unless directed otherwise by the agency.
- The guidance maintains previous language on alternative reporting approaches based on the nature of the contractor and/or their workforce:
- Contractors whose contract work is done exclusively by employees outside of NYS are “generally exempt.”
- When a contractor’s workforce utilized on a state contract can be separated from its total workforce, the report shall cover only that segment of the workforce; if those contract-related employees cannot be identified, the contractor may report on their “total workforce.” However, the FAQ document states that a contractor that cannot identify any employees who work specifically on a state contract can submit a report covering only their New York State employees.
- When all contractor employees perform functions in a way that prevents determination of hours worked on state contracts, the contractor may report the total wages of such employees (rather than wages for hours worked on state contracts).
- When a contractor can determine the actual hours worked on state contracts for some but not all employees, the contractor should report only on those workers who contract work can be precisely determined.
20 NYCRR Part 2380.4 Definition of gross wages.
(a) Statutory reference and rule of construction. (1) The term gross
wages has the meaning given to the term remuneration by section 517 of
the Labor Law. Gross wages includes all such remuneration before any
allocation, apportionment, or deduction and without regard to a dollar
limitation contained in any law which excludes from wages or compen-
sation any amount paid in excess of such limitation.
(2) Subdivisions (b), (c) and (d) of this section are intended to
provide only a general description of the kinds of compensation consti-
tuting remuneration. Any question concerning the proper construction of
such term must be resolved by consulting the statute cited in paragraph
(1) of this subdivision.
(b) Definition of remuneration. Remuneration means every form of
compensation for employment paid by an employer to his, her or its
employees, whether paid directly or indirectly by the employer, includ-
ing salaries, commissions, bonuses, tips and the reasonable value of
board, rent, housing, lodging or similar advantage received.
(c) Exclusions. Remuneration does not include:
(1) payments made under a plan or system providing for retirement,
sickness or accident disability for an employee or an employee's depen-
(2) payments made by an employer, without payroll deductions, of taxes
required from an employee under the Federal Insurance Contributions Act;
(3) insurance or annuity payments to an employee for retirement;
(4) payments to a sick or disabled employee after six complete calen-
dar months following the month in which the employee last worked;
(5) payments from or to a trust described in section 401(a) of the
Internal Revenue Code which is exempt from tax under section 501(a) of
(6) compensation paid in any medium other than cash to an employee for
services not in the course of the employer's trade or business;
(7) payments made to an employee, except for vacation or sick pay,
beginning with the month following the employee's 65th birthday, for any
period in which the employee did not actually work;
(8) dismissal payments;
(9) compensation paid to a daytime student in elementary or secondary
school who works for other than a non-profit organization or govern-
mental entity, including payments for working during vacation periods
(10) payments by a household employer to a babysitter under age 18;
(11) any payments made by an employer who is not liable for unemploy-
ment insurance contributions or payments in lieu of contributions pursu-
ant to article 18 of the Labor Law.
(d) Special rule. Notwithstanding the provisions of subdivision (c) of
this section, sick pay and disability payments described in paragraph
(c)(1) of this section, and payments described in paragraphs (c)(8) and
(9) must be reported if the employer is liable for taxes under the
Federal Unemployment Tax Act, to the same extent as such payments are
reportable under such act