Prevailing Wage Expansion in New York

February 28th, 2019|By Jeff Bennett

The New York State legislature is poised to pass a comprehensive revision of the prevailing wage law, extending prevailing wage requirements to a far wider scope of work than ever before. An interesting article covering this can be found in the Albany Times Union here.

The new requirements would require the payment of prevailing wage and fringe benefits to workers on most any project in New York that has any state funding or tax incentives. This would include many public / private partnerships such as targeted development projects for private business like technology parks, brownfield redevelopment, historic preservation projects, and even affordable housing projects like Habit for Humanity and other charities.

The law will effect merit shop (non-union) contractors far more than their competitors who have labor union agreements (union shops). This is because in New York, the union wage and benefit rates are by law the prevailing rate, even though union labor makes up only a small fraction of total construction labor in New York. Therefore, union shops are already paying prevailing wage rates on non-public work.

The challenge for merit shop contractors will be how they can structure their business to maintain their competitive advantage. One area that will deserve attention is the way bona-fide benefit plans are structured and funded.

Contractors that have in the past chosen to pay the fringe benefit rate as cash wages will want to reconsider. Inflating already high cash wages drives up payroll taxes and related premiums such as workers compensation. Utilizing carefully designed bona fide fringe benefit plans can help contractors be more profitable and competitive.

How we can help

DirectAdvisors, established in 2001 and located in Albany, New York provides bona fide benefit plan consulting and third party administrative services to merit shop (non-union) construction companies that are subject to the Davis-Bacon Act, Service Contract Act and state prevailing wage regulations. Our clients are located throughout the United States and range in size from 10 to 3,000 employees.

This year, our construction company clients will contribute tens of millions of dollars of prevailing wage fringe benefit contributions to The DirectAdvisors Trust (health & welfare benefits) and retirement plans managed by our team.

Our solutions are free from any conflict of interest as we do not sell any financial or insurance products. We work with existing agents, brokers and insurance companies.



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