Broadens scope of prevailing wage requirements for service employees and establishes criminal penalties for violations

Summary of provisions

Section 1 - The bill renames Article 9 of the Labor Law "Prevailing Wage for Service Employees" and makes changes in two basic areas:

Section 2 - Definitions in §2.30 are clarified to ensure that they clearly apply to all appropriate categories of service work for public agencies: (1) The terms "building service employee" and "building service work" are changed to "service employee" and "service work" throughout the article, in order to more accurately reflect the types of service work commonly required by public agencies. The definition of "service employee" is clarified to reflect the fact that service work often is not restricted to building interiors, but can also include care, maintenance and patrolling of outdoor areas, such as parking lots, grounds and other outdoor work sites. The definition of "service employee" is also clarified to explicitly include drivers, waiters, cooks and other food service workers. (2) The definition of "service work" is amended to delete the exemption for public utility services, and to explicitly include service work performed under a contract with any third party person or entity acting in place of, on behalf of and for the benefit of a public agency pursuant to a lease, permit, or other agreement. The definition of "public agency" is amended to include public utility services provided by a public authority or by a public utility selling gas, electric or steam services at retail rates under a franchise granted by the Public Service Commission (including any substantially-owned entity affiliated with the public utility), and any business improvement district with more than $1 million in total annual revenue. (3) The definition of "person" (from Article 8) is added to ensure the law is enforceable against partnerships, joint ventures and other forms of organization.

B. Safeguards against abuse are added and time·tested enforcement tools are borrowed from Labor Law Article 8 (prevailing wages for public work) to ensure compliance: (1) A new subdivision 8 is added to §2.31 to clarify that prevailing wage requirements cannot be evaded by any lease, permit or other agreement with a public agency and a third party person or entity, and that in any such arrangement the third party acts as the agent of the public agency.

Any such responsible business practices including the payment of prevailing wages to service employees. The bill also extends this requirement to substantially owned affiliated entities of such utilities, to ensure that (as with third party entities) prevailing wage requirements are not avoided through corporate sleight of hand. (3) The amendments delete an exemption in the original bill for food service concessions. Such arrangements will be subject to prevailing wages on the same basis as other service work-i.e., whether the work is covered service work that is performed for the benefit of the public agency. (4) The payroll reporting requirement in §237(2) is amended to provide that the payroll records must be filed within 90 days after "any" labor is performed, to clarify that this is a rolling reporting requirement.

Justification

Currently, the prevailing wage law for service employees lacks many of the procedural safeguards and enforcement tools that have long been incorporated into Article 8 combined with some ambiguous or outdated definitions, this has left the door open for efforts to avoid paying prevailing wages for service work performed for public agencies. This bill would bolster the ability of enforcement agencies to ensure that service employees receive the prevailing wages to which they are entitled.

For almost forty years, Article 9 of the Labor Law has promoted the public policy that workers who perform service work on behalf of public agencies should be paid the prevailing wage for such employment in their communities. Over that time, substantial experience has been gained over what provisions of the law require strengthening to prevent abuses. This bill clarifies the definitions and applicability of Article 9 and adds provisions that are analogous to several enforcement tools that have long been a part of Article 8, in order to ensure that prevailing wages are paid for all appropriate service work.

Prior legislative history

2011-12: S.1110 2010: S.7096-A Passed the Senate, Delivered to Assembly.

Fiscal implications

Any fiscal implications are completely dependent on specific agency/worksite circumstances, including when current contracts or agreements expire or are up for renewal and what terms are negotiated in the future.

Effective date

in 0 Ninetieth day after enactment, to apply to all contracts or other agreements entered into, renewed, or extended on or after such date. However, the amendments to subdivision 4 of section 230 of the labor law made by section two of this act shall be subject to the expiration and reversion of such subdivision pursuant to section 5 of chapter 678 of the laws of 2007, as amended, when upon such date the provisions of section four of this act shall take effect. Furthermore, the amendments to subdivision 5 of section 231 of the

labor law made by section three of this act shall be subject to the expiration and reversion of such subdivision pursuant to section 5 of chapter 678 of the laws of 2007, as amended, when upon such date the provisions of section five of this act shall take effect.