What's happening
This bill expands prevailing wage requirements for service workers on public contracts, including food and security workers, and strengthens enforcement and penalties.
Why it matters
Expands coverage to more workers and contracts. The bill broadens the definition of “service employee” to explicitly include janitorial, food service (such as cooks, bakers, and dishwashers), and security workers on public contracts over $1,500, as well as those working under agreements with third parties acting for public agencies. This means more workers—especially low-wage, often-overlooked service staff—are guaranteed prevailing wage rates on publicly funded jobs.
Closes loopholes and extends accountability. The amendments make clear that prevailing wage laws apply even when public agencies outsource services through leases, permits, or third-party agreements. The bill also expands the definition of “public agency” to include business improvement districts and regulated public utilities, ensuring these entities must also meet prevailing wage standards for contracted service workers.
Strengthens enforcement and penalties. Contractors and their affiliates face stricter enforcement mechanisms, including mandatory payroll record submission under oath, withholding of contract payments for noncompliance, and criminal penalties that scale with the amount of wage underpayment (ranging from misdemeanors to Class C felonies for egregious violations). Repeat offenders can be barred from public contracts for five years, and knowingly false payroll filings can result in felony charges.
Enhances transparency and oversight. The bill requires public agencies to designate specific employees responsible for reviewing certified payrolls before payments are made, improving compliance monitoring. It also mandates timely record-keeping and public agency accountability, aiming to prevent wage theft and ensure workers actually receive the prevailing wages they are owed.
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Who cares
Headline styles
Expand Prevailing Wage Protections
Plain English, a few words. Used as the page title.
Sponsors
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History
- Referred to labor
- Referred to labor
Full text
7 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
323
2017-2018 Regular Sessions
IN SENATE (Prefiled)
January 4, 2017
Introduced by Sen. PERALTA -- read twice and ordered printed, and when printed to be committed to the Committee on Labor
AN ACT to amend the labor law, in relation to prevailing wages for service workers
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. The article heading of article 9 of the labor law, as added by chapter 777 of the laws of 1971, is amended to read as follows:
PREVAILING WAGE FOR [BUILDING] SERVICE EMPLOYEES
§ 2. Subdivisions 1, 2, 3, 4, 6, 8, 9 and 10 of section 230 of the labor law, subdivision 1 as amended and subdivision 9 as added by chapter 542 of the laws of 1984, subdivisions 2, 3, 6 and 8 as added by chapter 777 of the laws of 1971, subdivision 4 as amended by chapter 678 of the laws of 2007 and subdivision 10 as added by chapter 547 of the laws of 1998, are amended and a new subdivision 15 is added to read as follows:
1. "[Building service] Service employee" or "employee" means any person performing janitorial, food or security service work for a contractor under contract with a public agency which is in excess of one thousand five hundred dollars and the principal purpose of which is to furnish services through the use of service employees, or any other person performing work in connection with the care or maintenance of an existing building, or in connection with the transportation of office furniture or equipment to or from such building, or in connection with the transportation and delivery of fossil fuel to such building, for a contractor under a contract with a public agency which is in excess of one thousand five hundred dollars and the principal purpose of which is to furnish services through the use of [building] service employees.
"[Building service] Service employee" or "employee" includes, but is not limited, to, watchman, guard, doorman, building cleaner, porter,
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD00043-01-7
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handyman, janitor, gardener, groundskeeper, stationary fireman, elevator operator and starter, window cleaner, food service worker, cook, baker, dishwasher, meat cutter, waiter, driver and occupations relating to the collection of garbage or refuse, and to the transportation of office furniture and equipment, and to the transportation and delivery of fossil fuel but does not include clerical, sales, professional, technician and related occupations.
"[Building service] Service employee" or "employee" also does not include any employee to whom the provisions of articles eight and [eight-a] eight-A of this chapter are applicable.
2. "[Building service] Service work" [or "service work"] means work performed by a [building] service employee, but does not include work performed for a contractor under a contract for the furnishing of services by radio, telephone, telegraph or cable companies[; and any contract for public utility services, including electric light and power, water, steam and gas]. "Service work" shall also include work performed under a contract for the benefit of a public agency with any third party person or entity acting in place of, on behalf of or for the benefit of such public agency pursuant to any lease, permit or other agreement between such third party person or entity and the public agency.
3. "Public agency" means the state, any of its political subdivisions, a public benefit corporation, a public authority, including a public authority providing public utility services, or commission or special purpose district board appointed pursuant to law, [and] a board of education, a business improvement district with more than one million dollars per year in total revenue, and any public utility that distributes electric light or power, or gas or steam services at retail rates regulated by the public service commission pursuant to a franchise granted under the provisions of section sixty-eight or eighty-one of the public service law, and any substantially-owned affiliated entity of such public utility.
4. "Contractor" means any employer who employs employees to perform [building] service work under a contract with a public agency and shall include any of the contractor's subcontractors.
6. "Prevailing wage" means the wage determined by the fiscal officer to be prevailing for the various classes of [building] service employees in the locality. In no event shall the basic hourly cash rate of pay be less than the statutory minimum wage established by article nineteen of this chapter, or, in a city with a local law requiring a higher minimum wage on city contract work, less than the minimum wage specified in such local law.
8. "Fiscal officer" means the industrial commissioner, except for [building] service work performed by or on behalf of a city, in which case "fiscal officer" means the comptroller or other analogous officer of such city.
9. "Fossil fuel" shall mean coal, petroleum products and fuel gases. "Coal" shall include bituminous coal, anthracite coal and lignite. "Fuel gases" shall include but not be limited to methane, natural gas, liquefied natural gas and manufactured fuel gases. "Petroleum products" shall include all products refined or rerefined from synthetic or crude oil or oil extracted from other sources, including natural gas liquids. [Provided that nothing in this subdivision shall affect the exclusion for public utility services set forth in subdivision two of this section.]
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10. "Substantially-owned affiliated entity" shall mean the parent company of the public utility, contractor or subcontractor, any subsidiary of the public utility, contractor or subcontractor, or any entity in which the parent of the public utility, contractor or subcontractor owns more than fifty percent of the voting stock, or an entity in which one or more of the top five shareholders of the public utility, contractor or subcontractor individually or collectively also owns a controlling share of the voting stock, or an entity which exhibits any other indicia of control over the public utility, contractor or subcontractor or over which the public utility, contractor or subcontractor exhibits control, regardless of whether or not the controlling party or parties have any identifiable or documented ownership interest. Such indicia shall include: power or responsibility over employment decisions, access to and/or use of the relevant entity's assets or equipment, power or responsibility over contracts of the entity, responsibility for maintenance or submission of certified payroll records, and influence over the business decisions of the relevant entity.
15. "Person" shall mean a human being and shall include an "entity" as defined in this article, including, but not limited to a contractor or subcontractor.
§ 3. Subdivisions 1, 3, 4 and 5 of section 231 of the labor law, subdivisions 1, 3 and 4 as added by chapter 777 of the laws of 1971 and subdivision 5 as amended by chapter 678 of the laws of 2007, are amended and a new subdivision 8 is added to read as follows:
1. Every contractor shall pay a service employee under a contract for [building] service work a wage of not less than the prevailing wage in the locality for the craft, trade or occupation of the service employee.
3. Each contract for [building] service work shall contain as part of the specifications thereof a schedule of the wages required to be paid to the various classes of service employees on such work, and each such contract shall further contain a provision obligating the contractor to pay each employee on such work not less than the wage specified for his craft, trade or occupation in such schedule.
4. The public agency, or appropriate officer or agent thereof, whose responsibility it is to prepare or direct the preparation of the plans and specifications for a contract for [building] service work, shall ascertain from such plans and specifications the classifications of employees to be employed on such work and shall file a list of such classifications with the fiscal officer, together with a statement of the work to be performed. The fiscal officer shall determine the crafts, trades and occupations required for such work and shall make a determination of the wages required to be paid in the locality for each such craft, trade or occupation. A schedule of such wages shall be annexed to and form a part of the specifications for the contract prior to the time of the advertisement for bids on such contract and shall constitute the schedule of wages referred to in subdivision three of this section.
5. Upon the award of a contract for [building] service work by a public agency other than a city, the contracting public agency shall immediately furnish to the commissioner: (a) the name and address of the contractor to whom the contract was awarded; (b) the date when the contract was awarded; and (c) the approximate consideration stipulated for in the contract.
8. The requirements of this section shall apply to any person or entity that enters into any lease, permit or other agreement with a public agency that includes the provision of service work by employees who would be required to be paid scheduled wages pursuant to this section in
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the absence of such agreement. Any third party person or entity that contracts for or otherwise arranges for the payment for or performance of service work for the benefit of a public agency pursuant to any such agreement shall do so as an agent of the public agency. No public agency shall enter into any such agreement with any person or entity without (a) preparation of an agreement between the public agency and the third party person or entity that clearly delineates the responsibilities of each with respect to reporting, filing and retention of payrolls and other documents, and any other actions required pursuant to this article, and (b) receipt by the public agency of a written acknowledgement from such third party person or entity that the person or entity agrees to undertake those responsibilities as the agent of the public agency, and affirming such person or entity's nondelegable obligation to pay not less than the wages specified in each applicable schedule. Such documents shall be in a form satisfactory to the fiscal officer and shall be subscribed and confirmed as required by such officer. Such documents shall be retained as provided in section two hundred thirty-three of this article, and a copy of each such document shall be filed by the public agency with the fiscal officer within ten days of its execution. Notwithstanding any such agreement, nothing in this subdivision shall be deemed to relieve the public agency of its responsibilities to ensure compliance with this article. Any lease, permit or agreement made in contravention of this subdivision shall be void as a matter of public policy. The fiscal officer may take all actions necessary to ensure compliance with the provisions of this article against the public agency, any third party acting in place of, on behalf of or for the benefit of such public agency pursuant to any lease, permit or other agreement between such third party person or entity and the public agency, or both the public agency and third party jointly.
§ 4. Paragraphs a and c of subdivision 2 and subdivision 7 of section 235 of the labor law, paragraph a of subdivision 2 and subdivision 7 as amended and paragraph c of subdivision 2 as added by chapter 547 of the laws of 1998, are amended and subdivision 2 is amended by adding a new paragraph g to read as follows:
a. At the start of such investigation the fiscal officer may notify the financial officer of the public agency interested who shall, at the direction of the fiscal officer, forthwith withhold from any payment due to the contractor executing the contract sufficient money to safeguard the rights of the service employees and to cover the civil penalty that may be assessed as provided herein, or, if there are insufficient moneys still due or earned to the contractor or subcontractor to safeguard the rights of the service employees and to cover the civil penalty that may be assessed as provided herein, the financial officer of another civil division which has entered or subsequently enters into a [building] service work contract with the contractor or subcontractor, who shall withhold from any payment due the contractor or subcontractor executing any [building] service work, sufficient moneys to safeguard the rights of the service employees and to cover the civil penalty that may be assessed as provided herein.
c. The notice of withholding shall provide that the fiscal officer intends to instruct the financial officer, not less than ten days following service of the notice by mail, to withhold sufficient moneys to safeguard the rights of the service employees and to cover the civil penalty that may be assessed as provided herein, from any payment due the notified party under any [building] service work contract pending final determination. The notice of withholding shall provide that within
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Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the labor law, in relation to prevailing wages for service workers
Purpose
This bill strengthens and clarifies Article 9 of the Labor Law to ensure that workers employed to provide service work for the benefit of public agencies are paid the prevailing wages to which the law entitles them.
Summary of provisions
The bill renames Article 9 of the Labor Law "Prevailing Wage for Service Employees" and makes changes in two basic areas: A. Definitions in § 230 are clarified to ensure that they clearly apply to all appropriate categories of service work for public agencies:
Read the full memo (936 words)
(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 § 231 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
2015-2016 - S1272 2013-2014 - S.126 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
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.
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