Prevailing wage in New York: a comprehensive guide

Posted by National Alliance for Fair Contracting on

Jacob Maslow
July 30, 2023

Prevailing wage is a crucial aspect of the construction industry in New York, as it ensures that workers receive fair compensation on public works projects. In essence, the prevailing wage is the pay contractors and subcontractors in New York must pay their employees when working on public works sites. This rate is higher than the standard minimum wage, based on hourly rates paid by unions to specific workers in a given market.

The New York State Department of Labor issues prevailing wage schedules for general and residential construction projects on a county-by-county basis. General construction rates apply to buildings, heavy and highway, tunnel, and water and sewer work. Contractors and subcontractors must adhere to these wage schedules to comply with state regulations.

Key Takeaways
Prevailing wage is critical in the New York construction industry, ensuring fair pay for workers on public works projects.
The New York State Department of Labor establishes wage schedules for general and residential construction on a county-by-county basis.
Contractors and subcontractors must adhere to these prevailing wage schedules to maintain compliance with state regulations.

Understanding Prevailing Wage
Article 8

In New York State, the prevailing hourly wage and usual benefits and overtime are paid to most workers, laborers, and mechanics within a given area. New York’s prevailing wage law is regulated under Article 8, which focuses on public construction projects. Prevailing wages are usually equivalent to the union wage. They can vary by location, as they are determined based on the average wages earned by professionals in similar roles in the area.

Article 8 of the New York State Labor Law ensures that contractors and subcontractors on public works projects pay their employees the appropriate prevailing wage, as established by the Department of Labor (DOL). These requirements apply to all parties involved in a public work contract, regardless of whether they have a direct contractual relationship with the public entity.

Public Work

Public work refers to any construction, maintenance, or improvement project funded and executed by a public entity, such as federal, state, or local government. These projects typically include building and renovating schools, hospitals, transportation infrastructure, and other public facilities. Regarding prevailing wages, contractors and subcontractors must know the specific rates applicable to their work locality and trade.

The New York State Department of Labor issues prevailing wage schedules for “General Construction Projects” and “Residential Construction Projects” on a county-by-county basis. General construction rates apply to buildings, heavy and highway construction, tunnels, water, and sewer. Employers with government contracts or foreign workers must pay their employees the prevailing wages to comply with the law and ensure fair compensation for their labor.

Understanding prevailing wage laws in New York, specifically under Article 8 and public work projects, is essential for contractors, subcontractors, and employees. Compliance with these laws protects workers’ rights and helps maintain a fair and competitive labor market.

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Another Voice: New York needs to define ‘public work’ on construction jobs (NY)

Posted by National Alliance for Fair Contracting on

By Matt Kent
Published February 2, 2019

In his recent State of the State address, Gov. Andrew M. Cuomo threw his support behind a key plank of the growing movement to properly define public work construction. His call that “project construction with public subsidies should be subject to the prevailing wage so they’re built right” is encouraging news for fans of responsible government.

The New York Foundation for Fair Contracting, a nonprofit promoting a level playing field in public construction to benefit taxpayers, contractors and workers, applauds Cuomo’s initiative.

For over a century, New York State has required contractors on taxpayer-funded government construction projects to pay workers the region’s “prevailing wage.” This practice, and the requirement these projects be competitively and transparently bid, have long enjoyed bipartisan support throughout the state.

However, many economic development projects in place across the state fall outside the long-standing taxpayer and worker protections built into state law. Millions of taxpayer dollars are spent without the transparency demanded of traditional public work projects.

Properly defining “public work” to include all projects supported with public money (including IDAs, regional economic development councils, and the Buffalo Billion) will promote accountability and transparency in government spending. It’s unacceptable that the current loophole allows public money to bypass this process as it goes to private interests.

As reported in The News, some critics called the governor’s prevailing wage proposal a “death sentence” for upstate economic development, saying it would increase costs and hurt the local economy. Quite the opposite – the vast majority of peer-reviewed studies find no connection between prevailing wage and project costs. In fact, when Indiana outright repealed its prevailing wage law, the Midwest Economic Policy Institute found the state “failing to deliver any meaningful cost savings or increased bid competition promised by those in favor of repeal.”

Instead, the repeal triggered an 8.5 percent collapse in blue-collar construction worker pay and a surge of out-of-state workers on state construction jobs. Conversely, communities with robust prevailing wage laws report stronger tax bases and lower reliance on public assistance programs. Weak fair contracting laws hurt workers and make little economic sense.

The New York Foundation for Fair Contracting is encouraged by the prospect of an inclusive definition of public work, which will result in greater protection for state taxpayers, better pay for local workers, and fair and transparent bidding.

Matt Kent of Buffalo is an analyst with the New York Foundation for Fair Contracting.

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