New York Law Review

Tag: Labor Law § 220

  • De La Cruz v. Caddell Dry Dock & Repair Co., 21 N.Y.3d 530 (2013): Defining ‘Public Work’ for Prevailing Wage Laws

    De La Cruz v. Caddell Dry Dock & Repair Co., 21 N.Y.3d 530 (2013)

    A municipal vessel is a public work under Labor Law § 220 and the State Constitution, requiring prevailing wages, if its primary objective benefits the general public.

    Summary

    This case defines what constitutes a “public work” under New York Labor Law § 220 and Article I, § 17 of the New York State Constitution, which mandate prevailing wages for workers on public projects. The plaintiffs, employees of Caddell Dry Dock, sought prevailing wages for their work on New York City vessels, including Staten Island Ferries and fireboats. The Court of Appeals held that a municipal vessel is a “public work” if its primary objective is to benefit the general public, regardless of whether the public directly uses the vessel or has access to it. The court reversed the lower court’s decision, finding that the vessels served a public function and thus qualified as public works.

    Facts

    The plaintiffs were employed by Caddell Dry Dock & Repair Co., which repaired and maintained vessels for various companies, including New York City agencies. The vessels serviced included Staten Island Ferry boats, New York City fireboats, and Department of Sanitation garbage barges. The plaintiffs claimed that they were entitled to the prevailing wage rate under Labor Law § 220 and Article I, § 17 of the New York State Constitution because the vessels they worked on were “public works.” Caddell argued that the vessels were not public works.

    Procedural History

    The plaintiffs sued Caddell, seeking enforcement of contractual provisions requiring payment of prevailing wages and supplemental benefits. Supreme Court denied the plaintiffs’ motion for partial summary judgment and granted the defendant’s motion, dismissing the complaint. The Appellate Division affirmed, citing Brukhman v. Giuliani. The Court of Appeals granted leave to appeal and reversed the Appellate Division’s decision.

    Issue(s)

    Whether a municipal vessel is a “public work” within the meaning of Labor Law § 220 and Article I, § 17 of the New York State Constitution, thus requiring the payment of prevailing wages to workers involved in its construction, maintenance, or repair.

    Holding

    Yes, because a municipal vessel is a public work if its primary objective is to benefit the general public.

    Court’s Reasoning

    The Court of Appeals reasoned that the term “public work” extends beyond structures attached to land and includes items that are “situated” or “used” for the public benefit. The Court emphasized the legislative intent to ensure social justice in the State’s dealings with laborers and mechanics, requiring a liberal interpretation of Labor Law § 220. The Court distinguished Brukhman v. Giuliani, stating that it was not dispositive on the issue of whether a vessel is a “public work,” noting that the critical factor is whether the primary purpose or objective of the project is public. The court established a three-prong test to determine whether a project is subject to prevailing wage requirements: (1) a public agency must be party to a contract involving laborers; (2) the contract must concern a project involving construction-like labor paid for by public funds; and (3) the work product’s primary objective must be for public use or benefit. Applying this test, the Court found that vessels like Staten Island Ferries and fireboats serve the general public, even if the public does not directly use the fireboats. As Justice Holmes stated, “whether a work is public or not does not depend upon its being attached to the soil”.

  • R-J Taylor General Contractors, Inc. v. New York State Dept. of Labor, 20 N.Y.3d 473 (2013): Applying Prevailing Wage Laws to Public Entities

    R-J Taylor General Contractors, Inc. v. New York State Dept. of Labor, 20 N.Y.3d 473 (2013)

    Prevailing wage laws apply only to construction contracts entered into by specific public entities enumerated in the statute; volunteer fire departments, absent explicit statutory inclusion or agency relationship, are not subject to these laws.

    Summary

    R-J Taylor General Contractors, Inc. contracted with the Bath Volunteer Fire Department (BVFD) for the construction of a new firehouse. The New York State Department of Labor (DOL) determined that the project was subject to prevailing wage laws. The Court of Appeals reversed, holding that BVFD, a not-for-profit fire corporation, did not fall under the definition of a public entity as contemplated by Labor Law § 220. The Court clarified that the prevailing wage law applies only to contracts involving the state, a public benefit corporation, a municipal corporation, or a commission appointed pursuant to law. The Court rejected the argument that the BVFD was the “functional equivalent” of a municipal corporation, emphasizing the need for explicit statutory inclusion.

    Facts

    The Bath Volunteer Fire Department (BVFD), a not-for-profit fire corporation, decided to build a new firehouse after the Village of Bath declined to do so. BVFD obtained its own financing, acquired land, and hired R-J Taylor General Contractors, Inc. (Taylor) as the general contractor in September 2006. Taylor then hired subcontractors. The Department of Labor (DOL) issued an opinion letter stating the project was a public work subject to prevailing wage laws, halting construction until BVFD agreed to indemnify Taylor and its subcontractors against any liability for not paying prevailing wages. Construction then resumed and was completed.

    Procedural History

    An administrative hearing was held to determine if the prevailing wage law applied. The Hearing Officer determined it did, based on the Erie County test. Petitioners commenced an Article 78 proceeding for review. The Appellate Division confirmed the determination and dismissed the petition. The Court of Appeals granted petitioners’ motion for leave to appeal.

    Issue(s)

    Whether the prevailing wage requirement of Labor Law § 220 applies to a construction contract entered into by the Bath Volunteer Fire Department, a not-for-profit fire corporation not explicitly listed as a public entity in the statute.

    Holding

    No, because BVFD is not one of the public entities enumerated in Labor Law § 220, nor was it acting as an agent on behalf of a covered public entity at the time the contract was executed. The Court emphasized that the “functional equivalent” test was rejected in Matter of New York Charter School Assn. v Smith.

    Court’s Reasoning

    The Court reasoned that Labor Law § 220 specifically enumerates the types of public entities to which the prevailing wage law applies: the state, a public benefit corporation, a municipal corporation, or a commission appointed pursuant to law. The BVFD, as a fire corporation defined by the Not-For-Profit Corporation Law, does not fall into any of these categories. The Court rejected the argument that BVFD could be deemed the “functional equivalent” of a municipal department, citing Matter of New York Charter School Assn. v Smith, (15 NY3d 403 [2010]), where it rejected the same argument regarding charter schools. The Court stated: “Had the legislature intended to include volunteer fire corporations under the statute, it could easily have done so.” The service agreements between the BVFD and the Village of Bath were deemed insufficient to trigger the prevailing wage requirement because they pertained to emergency services, not the construction of a new firehouse, stating, “The service agreements do not include any provision contemplating the work involved here: the construction of a new firehouse.” Therefore, the service agreements are not a contract for public work within the meaning of the prevailing wage law. Because the first prong of the Erie County test (public entity) was not met, the Court did not need to address the second prong (public work).

  • New York Charter School Assn. v. Smith, 16 N.Y.3d 73 (2010): Determining if Charter Schools Are Subject to Prevailing Wage Laws

    New York Charter School Assn. v. Smith, 16 N.Y.3d 73 (2010)

    Charter schools are generally not considered public entities subject to New York’s prevailing wage laws under Labor Law § 220, unless they are acting directly on behalf of a public entity in a contractual capacity for public work.

    Summary

    This case addresses whether New York’s prevailing wage laws apply to charter schools. The New York State Department of Labor reversed its prior position and declared that these laws applied to all charter school projects. Charter schools and supporting foundations challenged this determination. The Court of Appeals held that charter schools are generally not public entities under Labor Law § 220 and are therefore not subject to prevailing wage laws unless they act directly on behalf of a public entity in a contractual capacity. The Court emphasized that charter schools typically contract for their own benefit, not for the benefit of the state.

    Facts

    In 2007, the New York State Department of Labor (DOL) issued an opinion letter stating that prevailing wage laws applied to all charter school projects, reversing its prior 2000 opinion that charter schools were generally not public entities and therefore not subject to these laws. The Commissioner of Labor notified the Charter Schools Institute and the Commissioner of the State Education Department that it would begin enforcing prevailing wage laws on charter school projects for which bids were advertised on or after September 20, 2007. Foundations supporting charter schools and individual charter schools then commenced legal proceedings challenging the DOL’s new position.

    Procedural History

    The Supreme Court denied the petitions, holding that the charter agreement was a contract between a public entity and a third party, thus subjecting charter school construction to prevailing wage laws. The Appellate Division reversed, granting the petitions and declaring that charter schools are not subject to prevailing wage laws. The New York Court of Appeals granted leave to appeal and affirmed the Appellate Division’s decision.

    Issue(s)

    Whether charter schools are considered public entities or third parties acting on behalf of public entities, thus subjecting them to the prevailing wage requirements of Labor Law § 220 for construction and renovation projects.

    Holding

    No, because charter schools are not explicitly identified as public entities under Labor Law § 220 and typically contract for construction and renovation projects on their own behalf, not on behalf of a public entity.

    Court’s Reasoning

    The Court applied the two-pronged test from Matter of Erie County Indus. Dev. Agency v Roberts, which requires (1) a contract involving the employment of laborers, workmen, or mechanics to which a public agency is a party, and (2) that the contract concern a public works project. The Court found that charter agreements themselves are not contracts for public work. While charter schools possess some characteristics similar to public entities, they are governed by self-selecting boards of trustees and are exempt from many state and local laws governing public schools. The Court noted that the legislature knows how to subject charter schools to laws governing public entities when it intends to do so. Referencing Education Law § 2853 (1)(g), the court also noted that neither the local school district, the charter entity nor the state is liable for the debts or financial obligations of a charter school. The Court distinguished this situation from Matter of Pyramid Co. of Onondaga v New York State Dept. of Labor, where a private entity was acting to benefit the State. Here, a renovation contract by a charter school is primarily for the benefit of the school itself. The court emphasized that its holding should not be interpreted to mean that every contract involving a charter school is exempt from prevailing wage laws, as there may be situations where the school is acting directly on behalf of a public entity. The Court stated, “[w]hen an education corporation enters into a facilities contract for a charter school, it typically does so on its own behalf, in its own name, and at its own risk.”

  • Matter of Lantry v. State of New York, 6 N.Y.3d 49 (2005): Prevailing Wage Rate Classification & Local Contractor Practices

    Matter of Lantry v. State of New York, 6 N.Y.3d 49 (2005)

    The Department of Labor is not required to conduct surveys of local contractor practices to determine the appropriate trade classification for prevailing wage rate purposes and may rely on factors such as collective bargaining agreements, jurisdictional agreements, and the nature of the work itself.

    Summary

    Lantry, a contractor, challenged the Department of Labor’s (DOL) methodology for classifying work to determine prevailing wage rates, arguing the DOL should consider survey evidence of local contractor practices. The DOL determined Lantry underpaid employees by classifying window installation work as glazier work instead of the higher-paid ironworker classification. The Court of Appeals held that the DOL need not conduct local contractor surveys and that the Commissioner’s determination was not arbitrary or capricious, emphasizing the DOL’s discretion in considering collective bargaining agreements and the nature of the work.

    Facts

    Lantry, a subcontractor, installed preglazed windows for a school district, paying his non-union employees the glazier’s wage rate. The Department of Labor (DOL) audited the project and determined the employees should have been paid the higher ironworker rate, resulting in an underpayment assessment. Lantry requested a hearing, anticipating the DOL would use a “prevailing practice in the locality” approach, relying on surveys of local contractors. Lantry presented evidence that local contractors predominantly paid glaziers’ rates for preglazed window installation.

    Procedural History

    The administrative hearing officer accepted the DOL’s ironwork classification. The Commissioner adopted the hearing officer’s findings. Lantry then commenced an Article 78 proceeding to vacate the Commissioner’s order. The Appellate Division confirmed the determination. The Court of Appeals granted Lantry leave to appeal.

    Issue(s)

    Whether the Commissioner of Labor is required to consider survey evidence of local contractor practices when classifying work for the purpose of determining the appropriate prevailing wage rate under Labor Law § 220.

    Holding

    No, because nothing in Labor Law § 220 mandates that the Commissioner consider actual contractor practices in a locality when classifying work, and the Commissioner’s methodology is upheld as long as it is not unreasonable.

    Court’s Reasoning

    The Court of Appeals held that Labor Law § 220 does not mandate the Commissioner to consider actual contractor practices when classifying work. The Court emphasized that trade classifications are within the Department’s expertise and should not be disturbed unless clearly inconsistent with the work performed. The Commissioner generally analyzes the specific nature of the work, collective bargaining agreements, jurisdictional agreements, and past Bureau recognition. The Court acknowledged that collective bargaining agreements could be relied upon. In instances where multiple unions claim jurisdiction, the Department expands its review to encompass factors such as jurisdictional agreements and the nature of the work. The court found the Department’s mission is to ensure workers are paid the correct wage initially, necessitating trade classification before project commencement. The court quoted Matter of Kelly v Beame, 15 NY2d 103, 109 (1965), stating that “[t]he pivotal question” is the nature of the work performed in reviewing the Department’s trade classifications.

    The Court distinguished the case from Matter of Cortland Glass Co., where a contrary determination was reached, noting that the Commissioner explicitly overruled Cortland Glass to the extent it held that actual practice evidence is relevant to classifying work. The Court of Appeals deferred to the Commissioner’s expertise, finding the classification of the task as ironwork neither arbitrary nor capricious.

  • Cayuga-Onondaga Counties Bd. of Coop. Educ. Servs. v. Sweeney, 89 N.Y.2d 354 (1996): Public Interest Exception to Notice of Claim

    Cayuga-Onondaga Counties Bd. of Coop. Educ. Servs. v. Sweeney, 89 N.Y.2d 354 (1996)

    When the Commissioner of Labor brings a proceeding to enforce prevailing wage requirements on public work projects, it serves a broader public interest, exempting the action from the notice of claim requirements typically applicable to actions against school districts or BOCES.

    Summary

    The Cayuga-Onondaga Counties Board of Cooperative Educational Services (BOCES) appealed a decision by the Commissioner of Labor that it failed to pay prevailing wages to employees on a lighting project for the Auburn City School District. BOCES argued that the Commissioner’s action was barred by the failure to file a timely notice of claim under Education Law § 3813 and by the statute of limitations. The Court of Appeals held that the Commissioner’s action fell under the public interest exception to the notice of claim requirement because it sought to enforce a broad public policy, and that the Education Law’s statute of limitations did not apply.

    Facts

    In 1992, BOCES agreed with the Auburn City School District to provide labor for a lighting improvement project. BOCES hired 41 full-time employees of the Auburn school district as temporary, seasonal laborers. These employees were paid at their regular rates but did not receive overtime, which they would have received if working directly for the school district. The Auburn City School District reimbursed BOCES for these payments. The State Department of Labor received a complaint alleging BOCES failed to pay the prevailing wage rate for electricians.

    Procedural History

    The Commissioner of Labor issued a notice of hearing to BOCES in March 1994, alleging violations of Labor Law § 220. A Hearing Officer determined that BOCES violated Labor Law § 220 and was not exempt due to the employees’ temporary civil service classification. The Commissioner adopted the Hearing Officer’s report and ordered a further hearing to determine underpayment, penalties, and willfulness. The Appellate Division confirmed the determination and dismissed BOCES’s petition. BOCES appealed to the Court of Appeals.

    Issue(s)

    1. Whether the Commissioner of Labor was required to file a notice of claim against BOCES under Education Law § 3813(1) before commencing the proceeding to enforce prevailing wage requirements.
    2. Whether the Commissioner of Labor’s proceeding was barred by the one-year statute of limitations in Education Law § 3813(2-b).

    Holding

    1. No, because the proceeding initiated by the Commissioner of Labor falls within the public interest exception to the notice of claim requirement.
    2. No, because the Commissioner of Labor is not bound by the one-year statute of limitations in Education Law § 3813 (2-b) in enforcement proceedings under Labor Law § 220.

    Court’s Reasoning

    The Court reasoned that proceedings seeking to vindicate a public interest are exempt from the notice of claim requirement. The prevailing wage mandate, rooted in the State Constitution (Article I, § 17) and Labor Law § 220, reflects a strong public policy. The Court cited Union Free School Dist. No. 6 v. New York State Human Rights Appeal Bd., 35 N.Y.2d 371 (1974), distinguishing it from cases like Mills v. County of Monroe, 59 N.Y.2d 307 (1983), where the action sought only personal redress. The Court highlighted the Commissioner’s broad powers under Labor Law § 220, including the ability to initiate investigations and impose penalties independently of individual complaints, as evidence of the public interest served. “Section 220 has been characterized as ‘an attempt by the State to hold its territorial subdivisions to a standard of social justice in their dealings with laborers, workmen, and mechanics,’” quoting Austin v. City of New York, 258 N.Y. 113, 117 (1932). The Court also held that applying Education Law § 3813’s notice of claim or statute of limitations would conflict with the enforcement scheme established by the Labor Law. Moreover, the court cited Bucci v. Village of Port Chester, 22 NY2d 195, 203-204 holding that municipal notice of claim statutes have no relevance or application to actions brought pursuant to subdivision 8 of section 220 of the Labor Law.

  • Matter of Sierra Telcom Servs., Inc. v. Hartnett, 71 N.Y.2d 897 (1988): Statute of Limitations for Challenging Employee Classification in Prevailing Wage Disputes

    Matter of Sierra Telcom Servs., Inc. v. Hartnett, 71 N.Y.2d 897 (1988)

    The statute of limitations for challenging an employee classification in a prevailing wage dispute does not begin to run until the agency issues a final and binding determination impacting the petitioner.

    Summary

    Sierra Telcom Services, Inc. sought review of a determination that it failed to pay prevailing wages to its telephone installers. The Court of Appeals reversed the Appellate Division’s decision, holding that while the installation of a telecommunications system in a government building constitutes a “public work” under Labor Law § 220 (3), the four-month statute of limitations to challenge the classification of Sierra’s employees as “electricians” did not begin until the Commissioner’s final determination, not upon receipt of the prevailing rate schedule (PRS). The case was remitted to the Appellate Division to determine issues related to the employee classification.

    Facts

    Sierra Telcom Services, Inc. installed a telecommunications system in the Clinton County Government Center. After a compliance hearing, the Commissioner of Labor determined that Sierra failed to pay prevailing wages to its nine telephone installers, classifying them as electricians. The prevailing rate schedule (PRS), though not initially annexed to the work specifications, was provided to Sierra, and they acknowledged receiving it in July 1984.

    Procedural History

    The Appellate Division concluded that the failure to initially annex the PRS was not improper because Sierra received it later. They also held the project was a “public work.” The court further determined that Sierra’s challenge to the electrician classification was time-barred because they did not object within four months of receiving the PRS. Sierra appealed to the Court of Appeals.

    Issue(s)

    Whether the four-month statute of limitations to challenge the classification of employees as “electricians” for prevailing wage purposes begins to run upon receipt of the prevailing rate schedule (PRS) or upon the issuance of a final and binding determination by the Commissioner of Labor.

    Holding

    No, because the classification of employees did not become effective nor did it aggrieve the petitioner until the respondent issued its determination. The statute of limitations did not begin to run until that determination was issued.

    Court’s Reasoning

    The Court of Appeals agreed that the project was a “public work,” emphasizing that the inquiry focuses on the function of the project. The installation of a telecommunications system in a public building for public employee use qualifies as a public work. However, the court disagreed with the Appellate Division regarding the statute of limitations. The court stated that CPLR 217 requires a proceeding against a body or officer to commence within four months after the determination becomes final and binding. While the PRS indicated telephone installers were classified as electricians, this classification only became effective regarding Sierra’s employees when the Commissioner issued its determination in November 1985. The court cited Matter of Martin v. Ronan, 44 NY2d 374; Matter of O’Neill v. Schechter, 5 NY2d 548, 554; Matter of Abramson v Commissioner of Educ., 1 AD2d 366, 371, reinforcing that the determination was not final and binding, and the statute of limitations did not begin to run until the determination was issued. The court distinguished A. J. Cerasaro, Inc. v. Ross, 94 AD2d 943, affd 60 NY2d 946 and Matter of Schultz Constr. v. Ross, 76 AD2d 151, 155, affd 53 NY2d 792, noting those cases involved redeterminations of prevailing wage rates where no hearing was required. The court remitted the case to the Appellate Division to determine the issues raised regarding the classification of employees as electricians.

  • Matter of Joint Industry Board v. Commissioner of Labor, 68 N.Y.2d 794 (1986): Apprenticeship Requirements under NY Labor Law

    Matter of Joint Industry Board v. Commissioner of Labor, 68 N.Y.2d 794 (1986)

    Under New York Labor Law § 220, workers on public works projects must be paid the journeyman’s prevailing wage unless they are individually registered in a state-approved apprenticeship program, even if they are enrolled in a federally-approved trainee program with similar standards.

    Summary

    This case concerns whether contractors violated New York Labor Law § 220 by paying “trainee” electricians, enrolled in a federally-approved program, less than the prevailing wage for journeymen on a state-funded project. The Commissioner of Labor found that because the trainees were not registered in a state-approved apprenticeship program, they were owed the difference in wages. The contractors argued that the federal trainee program was functionally equivalent. The Court of Appeals upheld the Commissioner’s decision, emphasizing the statute’s clear requirement of state registration while suggesting legislative re-examination of the law’s impact on policies aimed at reducing discrimination in the construction industry.

    Facts

    Petitioners, contractors on a State-funded project at the Manhattan Psychiatric Center, employed electricians classified as “trainees” who were paid less than the prevailing wage for journeymen electricians. These trainees were part of a program registered with the U.S. Department of Labor but not with the New York State Department of Labor. The Commissioner of Labor determined that the contractors violated Labor Law § 220 by failing to pay the prevailing wage. The trainee programs were designed to encourage participation by individuals traditionally excluded from the skilled trades, such as women and minorities.

    Procedural History

    The Commissioner of Labor adopted the Hearing Officer’s findings that the contractors had violated Labor Law § 220. The Commissioner directed that the wage difference and a civil penalty be paid from moneys the State owed the contractors. The contractors appealed, and the Appellate Division affirmed the Commissioner’s order. This appeal followed to the New York Court of Appeals.

    Issue(s)

    Whether Labor Law § 220 requires workers on public works projects to be paid the journeyman’s prevailing wage if they are not individually registered in a state-approved apprenticeship program, even if they are enrolled in a federally-approved trainee program with similar standards designed to promote equal opportunity.

    Holding

    Yes, because Labor Law § 220 unambiguously requires individual registration in a state-approved apprenticeship program to be paid apprentice-level wages on public works projects, regardless of enrollment in similar federally-approved programs. The Court was constrained to affirm the decision based on the unambiguous language of the statute, despite the laudable policy goals of the federal trainee programs.

    Court’s Reasoning

    The Court reasoned that the 1966 amendments to Labor Law § 220 were enacted to prevent the subversion of prevailing wage laws by contractors using sham training programs. The amendments established a clear standard: only state-registered apprentices could be paid less than journeyman wages. The court acknowledged the importance of the federally-approved trainee programs in combating discrimination in the construction industry, noting that such programs served goals consistent with the State’s equal opportunity policies. However, the Court found the statutory language to be clear and unambiguous: “Serving laborers, helpers, assistants and apprentices shall not be classified as common labor and shall be paid not less than the prevailing rate of wages * * * No employee shall be deemed to be an apprentice unless he is individually registered in an apprenticeship program which is duly registered with the industrial commissioner”. The Court also reasoned that allowing federally-approved trainees to be paid apprentice wages without state registration could lead to wage debasement by allowing contractors to exceed the permissible ratio of learning-level employees to journeymen. The court suggested that the Legislature should re-examine Labor Law § 220 to address the unexpected frustration of policies aimed at reducing discrimination in the construction labor force, given the potential impact of the decision on the operation of trainee programs in the State.

  • Dadson Plumbing Corp. v. Goldin, 66 N.Y.2d 713 (1985): Defining ‘Final Determination’ for Debarment Under Labor Law

    Dadson Plumbing Corp. v. Goldin, 66 N.Y.2d 713 (1985)

    For purposes of debarment under Labor Law § 220-b(3)(b), multiple violations of prevailing wage laws found in a single order constitute only one “final determination,” requiring a prior separate determination to trigger the debarment provisions.

    Summary

    Dadson Plumbing Corp., a plumbing business, was found by the Comptroller to have violated Labor Law § 220 by failing to pay prevailing wages to an employee across five contracts. The Comptroller’s single order finding these violations triggered concerns about debarment under Labor Law § 220-b(3)(b), which prohibits bidding on public work contracts for five years after two “final determinations” of willful violations. The New York Court of Appeals held that the Comptroller’s single order constituted only one “final determination,” preventing debarment. The court emphasized the penal nature of debarment provisions, requiring strict construction in favor of the party being penalized and establishing a need for a prior final determination before subsequent violations trigger debarment.

    Facts

    Dadson Plumbing Corporation, a father-son plumbing business, performed contracts exclusively for the New York City Board of Education.
    In 1982, Dadson was awarded five contracts.
    A plumbers’ union representative filed a complaint, leading the Comptroller to investigate whether Dadson paid prevailing wages to Randy Lane, employed as a “go-fer.”
    Evidence showed Lane drove Dadson’s truck, picked up tools, got coffee, and occasionally patched and painted holes.
    The hearing officer determined Lane was not a mere errand boy and was entitled to prevailing wages, which he did not receive.

    Procedural History

    The Comptroller found a violation of Labor Law § 220 and imposed a civil penalty.
    The Appellate Division confirmed the Comptroller’s determination by a divided court.
    Dadson Plumbing Corporation appealed to the New York Court of Appeals as of right.

    Issue(s)

    Whether a single order from the Comptroller, finding multiple violations of Labor Law § 220 across five contracts, constitutes one or multiple “final determinations” for the purposes of triggering debarment under Labor Law § 220-b(3)(b).

    Holding

    No, because the debarment provisions of Labor Law § 220-b(3)(b) require two “final determinations” to trigger ineligibility for bidding on public work contracts, and a single order finding multiple violations constitutes only one such determination.

    Court’s Reasoning

    The Court of Appeals acknowledged that substantial evidence supported the Comptroller’s determination that Dadson violated Labor Law § 220.
    The court focused on the interpretation of Labor Law § 220-b(3)(b), which imposes a five-year debarment from bidding on public work contracts after “final determinations” in “two instances” of willful violation of prevailing wage laws.
    The court emphasized the penal nature of these debarment provisions, stating they must be “strictly construed against the party seeking their enforcement and in favor of the person being proceeded against.”
    The court reasoned that the statute requires “one final determination prior to the second final determination so as to establish knowing repetition as the predicate for a five-year suspension from bidding.”
    Therefore, the Comptroller’s single order, even though it encompassed violations across five contracts, amounted to only one final determination. The court remitted the matter to the Comptroller to modify the determination to reflect that Dadson was not debarred from bidding.
    The Court explicitly stated that the statute requires “one final determination prior to the second final determination so as to establish knowing repetition as the predicate for a five-year suspension from bidding.”

  • Action Electrical Contractors Co. v. Goldin, 64 N.Y.2d 213 (1984): Permissible Forms of Supplemental Benefit Payments Under NY Labor Law

    Action Electrical Contractors Co. v. Goldin, 64 N.Y.2d 213 (1984)

    Under New York Labor Law § 220, a contractor on a public works project can satisfy its obligation to provide supplemental fringe benefits to employees by providing the cash equivalent of the cost of obtaining the prevailing benefits, rather than exclusively through in-kind benefits.

    Summary

    Action Electrical Contractors Co. was found to have violated Labor Law § 220 by failing to provide prevailing supplemental benefits to its employees on public works projects. The Comptroller determined Action Electrical had not provided equivalent benefit plans, and paying laborers additional cash equal to the cost of benefits was deemed insufficient. The Court of Appeals reversed, holding that the statute does not prohibit contractors from providing supplements via cash payments equal to the cost of the benefits, a combination of cash and benefits, or an equivalent benefits plan. The legislative intent behind the law was to equalize labor costs, and this goal is achieved when a contractor pays the cost of prevailing supplemental benefits, regardless of the form of payment.

    Facts

    Action Electrical Contractors Co. primarily worked on public contracts. They had a collective bargaining agreement with Local 363 of the Allied and Industrial Trade Workers, which required contributions to a benefit fund. In April 1980, Action Electrical was awarded contracts to perform electrical work for the New York City Housing Authority. The Comptroller received a complaint that Action Electrical was paying less than the prevailing wage and providing insufficient supplemental benefits.

    Procedural History

    The Comptroller determined Action Electrical failed to provide prevailing supplemental benefits or an equivalent plan. After a hearing, damages and penalties were assessed. Action Electrical appealed, but the Appellate Division confirmed the Comptroller’s determination. Action Electrical then appealed to the New York Court of Appeals.

    Issue(s)

    Whether an employer can fulfill its duty to provide prevailing supplements under New York Labor Law § 220 by paying cash directly to employees in the amount of the cost of those benefits, or whether the employer is limited to contributing to an in-kind benefits package equivalent to the prevailing supplements plan.

    Holding

    Yes, because the legislative history and purpose of Labor Law § 220 indicate that the primary goal is to equalize contractors’ labor costs, which is achieved when the contractor pays the cost of the prevailing benefits, regardless of whether that payment is in cash or in-kind benefits.

    Court’s Reasoning

    The Court found the statute ambiguous as to whether compliance should be determined by expenditures on benefits or the qualitative nature of the benefits. The Court examined the legislative history, noting that the amendment adding “supplements” to Labor Law § 220 aimed to equalize competition between union and non-union contractors by ensuring all contractors bore the cost of prevailing fringe benefits. The Court found the legislative history reflected a concern to equalize contractors’ minimum labor costs, and this purpose is fulfilled when a contractor pays in cash the cost of prevailing supplemental benefits to employees. According to the court, “The available documentary background to this amendment reflects only a concern to equalize contractors’ minimum labor costs. This apparent purpose is fulfilled when a contractor pays in cash, totally or partially, the cost of prevailing supplemental benefits to his employees.” The Court rejected the Comptroller’s argument that the statute requires qualitative equivalency with no cash substitutes, finding such an interpretation arbitrary and irrational. The Court noted, “Supplements may be provided by cash payments equal to the cost of providing the prevailing supplements, a combination of cash and benefits, or by an equivalent benefits plan.” Because the Comptroller’s damages assessment recognized Action Electrical had paid the full cost of providing the prevailing supplements, the Court found Action Electrical complied with Labor Law § 220.

  • Bucci v. Village of Port Chester, 22 N.Y.2d 197 (1968): Determining the Commencement of the Statute of Limitations in Prevailing Wage Disputes

    Bucci v. Village of Port Chester, 22 N.Y.2d 197 (1968)

    In actions to recover prevailing wage deficiencies under Labor Law § 220, the three-month statute of limitations for commencing an action against the employer begins to run only after a final determination has been reached, including the resolution of any legal challenges to the underlying administrative wage determination.

    Summary

    Employees of the Village of Port Chester sued to recover unpaid prevailing wages. The central issue was whether the lawsuit was timely filed, given the statutory three-month limitation period. The Industrial Commissioner had determined that the Village had not paid prevailing wages, a decision the Village challenged unsuccessfully in an Article 78 proceeding, including motions for reargument and leave to appeal. The Court of Appeals held that the three-month period began to run only after all challenges to the Commissioner’s determination were exhausted, ensuring that employees were not required to sue while the underlying wage determination remained legally uncertain. Therefore, the action was timely commenced.

    Facts

    Fifty-eight employees of the Village of Port Chester believed they were underpaid compared to prevailing wage rates. In 1950, they initiated proceedings before the State Industrial Commissioner to determine the appropriate prevailing wage rates. The Industrial Commissioner ultimately determined that the Village had not paid prevailing wages. After years of litigation, the employees commenced an action in December 1964 to recover back pay and interest from 1950 through 1963. The Village argued the suit was untimely.

    Procedural History

    The Industrial Commissioner filed an order fixing prevailing wage rates on October 3, 1963. The Village then filed an Article 78 proceeding to review the Commissioner’s determination. The Appellate Division confirmed the Commissioner’s determination, serving its order on the Village on July 29, 1964. The Village’s motion for reargument or leave to appeal was denied on October 15, 1964. The employees then commenced their action in December 1964. The Supreme Court dismissed the complaint, holding that the three-month period began on October 3, 1963. The Appellate Division affirmed, but the Court of Appeals reversed.

    Issue(s)

    Whether the three-month statute of limitations for commencing an action under Labor Law § 220(8) begins to run from the date of the Industrial Commissioner’s initial wage determination, or from the final resolution of any legal challenges to that determination, including motions for reargument or appeals.

    Holding

    No, because the three-month period begins to run only after a final determination is reached, including the resolution of any legal proceedings challenging the administrative wage determination. The statute aims to protect workingmen, and it would be unreasonable to require them to sue while the underlying administrative finding is still under legal attack.

    Court’s Reasoning

    The Court of Appeals emphasized the remedial purpose of Labor Law § 220, which aims to protect workers from being underpaid. The court reasoned that requiring employees to sue while the employer challenges the wage determination would be unfair and potentially futile. The Court stated, “The terms, ‘final determination’ and ‘final order,’ in subdivision 8 of section 220 must refer to an event that puts an end to any such pending attack—whether it be the original attack in the article 78 proceeding, allowed to the employer by the statute, or a subsequently launched attack by way of a motion for reargument or an appeal.” The court noted that the “finality” of a determination depends on the employer’s actions. If the employer challenges the initial determination, the limitations period is tolled until the challenge is resolved. In this case, the Village’s motion for reargument extended the period until its denial on October 15, 1964, making the December 1964 action timely. The court also rejected the Village’s arguments regarding notice requirements, finding they did not apply to actions under § 220(8). The court remitted the matter for consideration of the summary judgment motion, finding a grant of “moot” to be inappropriate.