New York adopts new labor law to ‘protect integrity of public work’

Dive Brief:

New York Gov. Kathy Hochul signed legislation last week designed to better enforce labor laws and regulations on public works projects. Employer groups have questioned its necessity and impact.
The legislation creates a registration system for contractors and subcontractors that bid on and deliver public work, as well as private projects that receive subsidies from the state. It goes into effect immediately.
Mike Elmendorf, president and CEO of Associated General Contractors of New York State, said that the bill didn’t line up with how contractors have bid on and won work. The group opposed the bill, but Hochul’s office agreed to a chapter amendment to address those concerns.

Dive Insight:

The law requires contractors and subs that want to win public projects to register with the Department of Labor and provide a series of disclosures about their business every two years. The goal is to ensure previous labor law and workers’ compensation law violations — such as skirting prevailing wage requirements — follow employers around via a publicly available database, thereby protecting workers from scofflaws.

Hochul said the “legislation will help ensure transparency, reduce fraud and ensure taxpayer money goes to contractors who treat their workers with dignity and respect.”

AGC and other state employer groups opposed the bill, Elmendorf said.

“At best, it was duplicative and at worst, it broke how public bidding works,” he said.

Elmendorf told Construction Dive that by requiring a list of all subcontractors at the time of submission, the law would make design-build procurement “impossible.”

Nevertheless, AGC NYS worked closely with Hochul’s office and DOL to secure an agreement for a chapter amendment to the bill, largely responsive to Elmendorf’s concerns, which he said will make it more “workable.”

“I have concerns about implementing the bill as drafted,” Hochul wrote in an approval message about the bill. “I have secured an agreement with the Legislature to resolve these concerns and make technical changes to the bill to make the registration system efficient and useful, and to ensure essential State work is not delayed.”

Labor violations, such as wage theft, are a major issue in the construction industry. In fiscal year 2022, the DOL’s Wage and Hour Division recovered over $32 million in back wages from 17,000 employees, the highest among measured industries.