The Business Council of New York State, the state’s leading statewide business and industry association, strongly opposes this legislation that would impose public works “prevailing wage” standards on most private sector projects receiving any level of financial support from state or local entities, including loans, grants, tax abatements and other government sources of aid.
The result of this legislation would be to significantly increase the labor costs, and therefore the overall project costs, of all projects subject to this new wage mandate. The public works “prevailing wage” as calculated by the state Department of Labor can be significantly higher than typical actual wages in local labor markets.
Currently entities such as industrial development authorities (IDAs) and local development corporations, amongst others, facilitate economic development projects around the State under a number of assistance programs. Under this proposed law, such projects would now be classified as “public works” and subject to public works prevailing wage.
The bill lists a variety of scenarios under which various projects would be deemed public works when “the state or public entities” lend even the slightest amount of financial support. If any of the numerous entities classified as “public entities” under this new law secures funding, waives a fee, reduces or forgives a charge, or transfers any property at less than fair market, the project is deemed a public works project subject to prevailing wage laws.
The bill also goes to great depths and includes a vast and inclusive list of all work deemed “construction” running the full gamut from pre-planning/survey to construction and “custom fabrication” culminating in “all cleanup work.” Thus, the bill both expands the definition of “public entity”-supported projects, as well as capturing almost any conceivable “construction” activity to insure the project contains some aspect of “public work” requiring its classification under this new law.
The inclusion of “custom fabrication” also poses a serious bookkeeping and logistical problem. Since this bill includes almost every conceivable fabricated material (i.e. “masonry panels, woodwork, cases, cabinets, or counters, and the fabrication of plumbing, heating, cooling, ventilation, or exhaust duct systems”) “regardless of where the custom fabrication is performed” contractors would be forced to determine prevailing wage on the most obscure items coming from various parts of the country or world to the work site. Even the movement of aggregate such as “sand, gravel, stone” – which may come locations far from the construction site and in split loads from several other work sites – are covered by this prevailing wage mandate. The additional time and effort to sort of products, costs, prevailing wage rates, would be astronomical.
To enforce these new and radical changes, the bill provides for “stop-work orders” when a complaint is received regarding the nature of these projects vis-à-vis these new changes under the Labor Law.
By unilaterally changing the status of the entities providing economic development and deeming all work assisted by said entities as public work, New York State risks a massive increase in the overall cost of construction and great uncertainty in the exact status of private economic development.
For these reasons, The Business Council strongly opposes this legislation.