(518) 869-9800
September 2003
NEW
PREVAILING WAGE PENALTY LEGISLATION SENT TO GOVEROR PATAKI (Go Top)
Legislation
that would provide new – and harsh – penalties for prevailing wage violations
has been passed by the Legislature and will be sent to Governor Pataki for his
consideration. Senate bill 850 passed
in the Senate on May 19th and in the Assembly on June 17th.
The bill would amend Section
220 of the Labor Law to allow an employee or the employee’s union to bring a
legal action directly against a contractor or subcontractor for alleged
prevailing wage underpayments in connection with public projects where a
payment bond has not been required.
Further, this legislation
would establish several new underpayment penalties including: (1) triple
damages payable to the employee; (2) all court costs, attorney’s fees, and
expert witness fees payable to the employee or the employee’s union; and (3) a
25 percent civil penalty payable to the Department of Labor to be used for
future enforcement of the prevailing wage law.
NESCA has opposed this
legislation as unnecessary given the many existing underpayment remedies
currently found in the prevailing wage law.
Further, NESCA believes the penalties contained in this bill are
excessive given the nature of many violations.
Often, contractors are cited by DOL when an underpayment has been
entirely unintentional. Matters
involving jurisdictional disputes between trades, unclear and overlapping
language found in competing collective bargaining agreements (highway rate vs.
building rate), a lack of updated wage schedules in contract specifications,
and even whether a particular project can be clearly defined as public or
private, have all led to unintentional violations of the law.
NESCA believes that if the
proponents of this bill are truly interested in enhancing compliance with the
prevailing wage law, they should support the publication of clear, concise
written prevailing wage regulations by the Department of Labor, something the
construction industry has sought for more than 20 years.
THRESHOLD INCREASE FOR SMALL CLAIMS
PASSED BY LEGISLATURE (Go Top)
A
bill supported by NESCA that would increase the threshold for commercial claims
court actions in New York State by $2,000 has been passed by both houses of the
Legislature and will be sent to Governor Pataki for his action. S.1570/A.5441 would amend the New York City
Civil Court Act, the Uniform District Court Act, the Uniform City Court Act,
and the Uniform Justice Court Act by increasing the jurisdictional limits for
“small claims” from the current $3,000 to $5,000.
The
commercial claims courts provide corporations access to a swift, inexpensive
means of collecting small claim amounts without having to be represented by an
attorney. Without this law, businesses
would probably write off many more small debts because the cost of hiring an
attorney would often amount to more than the debt itself. Now, after many years with a maximum limit
of $3,000, increasing the threshold to $5,000 is easily justified due to
inflation.
NESCA
members are reminded that town and village courts do not have a commercial
claims section like city courts.
However, corporations may file small claims in the regular part of town
and village courts without an attorney, provided they follow certain
procedures.
As the summer season winds down, NESCA will enter autumn fully focused on
business, and engaged in a wealth of activities intended to assist members and
benefit the construction industry.
We’ll be kicking off September with our annual golf outing, this year to
be held on September 8th at Shaker Ridge Country Club. As always, the golf outing is well on its
way to another sell-out, and will provide a nice vehicle for bringing members
together on a social basis for a day of fun and camaraderie.
Our first membership meeting of the year will be held on September 11th
at the Century House and will feature a program on the NYS Smoking ban. All employers are affected by the new
smoking rules, which went into effect in July.
Eileen Franko with the NYS Department of Health will be on hand to
present members with an overview of the law, and to answer any questions you
may have.
Moving into October, NESCA will hold our 23rd Annual Trade
Show on October 9th at the Century House. Exhibitor registration forms have been mailed out to all members,
and more information on the Trade Show will be forthcoming. I highly encourage members, particularly
suppliers and service providers, to reserve exhibit space at the Trade
Show. Each year our show is attended by
more than 500 contractors, subcontractors, design professionals, and public and
private owners, so there is a tremendous amount of exposure for our exhibitors.
As we enter the fall months, the NESCA/GBC/ECA Partnership will once again offer members a wide variety of education programs to choose from; from superintendent training courses, to safety-related programs, to management seminars. I urge members to be on the lookout for specific flyers detailing upcoming seminars, and to take full advantage of our educational offerings.
In addition to the interesting mix of meeting programs, seminars and other events to be presented, during the coming months your association will also focus efforts on the legislative and regulatory fronts. With the Legislature due to come back to Albany for a special session in the middle of September, NESCA and our state affiliate, the Empire State Subcontractors Association, will continue to push legislation that would require private owners to hold all retainage in an interest-bearing escrow account for the benefit of the parties from whom retainage has been held. We came very close to having this bill passed at the end of the regular session in June, so we’ll be making every effort to have it placed on the agenda for consideration by the Legislature this fall.
During the next few months, NESCA will continue discussions with various state agencies regarding a number of issues of importance to our members. We will continue efforts to reform and improve DASNY’s procedures for processing change orders and closing out projects. Talks with OGS are ongoing as we try to convince that agency to scrap their recent policy change concerning payment for stored materials, which has caused great concern among our members. We will persist in pressuring the State Education Department to enforce Regents Rule 29.3(b), which requires the principal design firm to approve all design work you submit through your shop drawings.
There’s a lot on our plate, so please work with us as we continue to seek improvements for all subs and suppliers doing business in New York.
Jeffrey B. Senft,
President
COURT OF APPEALS UPHOLDS DOL’S
ANNUALIZATION POLICY (Go Top)
On July 15, 2003, the United States Court of Appeals from the Second
Circuit decided the Rondout Electric Inc v. New York State Department of
Labor, et al. case. In this case,
the Court of Appeals overruled the District Court decision which declared that
the New York State Department of Labor annualization regulation was pre-empted
by the National Labor Relations Act (NLRA).
The annualization regulation provided in part “to determine the hourly
cash equivalent of any applicable supplement provided to or on behalf of
laborers, workers and mechanics employed upon public work projects…the
Commissioner of Labor will: (1) divide the actual contribution or cost for
providing such supplement by the total annual hours worked on both public
and private work, where such proof is provided to the Commissioner of Labor
by the employer.”
Rondout argued that the formula set forth in the
annualization regulation was pre-empted by the NLRA under the doctrine of Lodge
76, Int’l Ass’n of Machinists & Aerospace Workers, AFL-CIO v. Wisconsin
Employment Relations Comm’n, (“machinists”), because, as applied, it
impermissibly interferes with the quality of bargaining power between labor and
management on both private and public work projects. Rondout further argued that it affects adversely the
competitive position of non-union contractors within the private market place.
Addressing the issue of NLRA pre-emption, the Court of Appeals
concluded that “unlike the NLRA, the annualization regulation is not designed
to encourage or discourage employers in the promotion of their interests
collectively. Without some connection
between the prevailing wage supplements and labor/management bargaining, the
annualization regulation fails to come within the sphere of Machinists
pre-emption under the NLRA.”
In addressing Rondout’s contention that the annualization
regulation adversely affects the competitive position of non-union contractors
within the private market place, the Court of Appeals held that “it does not
bind an employer or an employee to a particular choice or eliminate particular
bargaining tools. Thus, it is not
pre-empted under the Machinists doctrine.
In concluding, the Court of Appeals stated “the anualization regulation does not fall within the scope of NLRA and is not pre-empted by it.”
This case will certainly put non-union contractors at substantial risk of being liable for underpayment of prevailing wage supplements. It will also encourage such contractors to make cash equivalent payments in lieu of supplemental benefits which will work to the disadvantage of both the employer and the employee.
Terence J. Burke, NESCA Legal Counsel
OSHA TO CRACK DOWN ON RECALCITRANT EMPLOYERS (Go Top)
The Occupational Safety and Health Administration has issued a memorandum to its regional offices detailing stronger enforcement procedures to use on “recalcitrant employers”, that is, employers who repeatedly disregard safety regulations. The memorandum, Enhanced Enforcement Policy for Employers who are Indifferent to Their Obligations Under the OSH Act, outlines enhancements to OSHA’s current enforcement practices to address this issue. The Enhanced Enforcement Policy will focus on employers that have been the subject of a High Gravity Citation Case, defined as a citation with:
- High gravity willful violations; or
- Multiple high gravity serious violations; or
- High gravity repeat violations at the originating establishment; or
- Failure-to-abate notices; or
- A serious, willful, or repeat violation related to a fatality
The new enhanced policies include:
- Follow-up inspections for high gravity citation cases.
- Targeted inspections for other establishments of employers who have high gravity citation cases.
- Increased public awareness of OSHA enforcement via local and national press releases.
- Enhanced settlement provisions that require employers take steps to address systematic compliance problems.
- Federal Court enforcement under Section 11(b) of the OSH Act.
Corrosion
Products & Equip., Inc
110 Elmgrove Park
Rochester, NY 14624
(585) 247-3030; Fax (585) 247-7268
Contact: Peter Quinn
J.R.
Pietropaoli, Inc.
136 Powell Hill Road
Ravena, NY 12143
(518) 756-6894; Fax (518)
756-3282
Contacts: Sue & Jim Pietropaoli
45 Werner Road
Clifton Park, NY 12065
(518) 664-5377; Fax (518)
664-2293
Contact: Robert Gardner
September 8,
2003
19th Annual
NESCA Golf Outing
Shaker Ridge CC, Latham, 11
am
September 11,
2003
Board of
Directors Meeting
Century House, Latham, 5 pm
September 11, 2003
NESCA
Membership Meeting
Century House, Latham, 6 pm
Burt Crane & Rigging
seeks Proj. Mgr. to oversee projects, employee management and customer
liaisons. BSME desirable, related
educ/exp acceptable. Competitive
compensation pkg. Call Bill Scheib at
(518) 271-6858 or email resume to info@burtcrane.com
…….that subcontractors now have the statutory right to stop work for non-payment on private projects in New York State? Effective January 14, 2003, Article 35-E of the General Business Law established prompt payment provisions for private commercial construction projects in excess of $250,000. Among other things, the new prompt payment law allows subcontractors to stop work for non-payment after providing a ten-day written notice to the contractor and owner.
More specifically, Section 756-B of the NYS General Business Law authorizes a subcontractor to suspend contractually required performance of work:
(1) If an owner fails to make timely payments
for undisputed invoices within the time frames established by General Business
Law Section 756-A for the subcontractor’s work and the contractor also fails to
pay the subcontractor for the approved work.
(2) If an owner pays the contractor within the
time limits established by Section 756-A for undisputed invoices for work
performed by the subcontractor but the contractor fails to make payment to the
subcontractor within the time frames established by Section 756-A for the
subcontractor’s work.
(3) If an
owner fails to approve or disapprove a portion of a contractor’s invoice for
work performed by a subcontractor within the time limits established in Section
756-A.
(4) If a
contractor fails to approve or disapprove a subcontractor’s invoice within the
time limits established in Section 756-A.
(5) If an
owner fails to approve portions of the contractor’s billing for work performed
by the subcontractor within the time limits established in Section 756-A and the
reasons for such failure are not the fault of or directly related to the
subcontractor’s work.
The law also specifically provides that the subcontractor shall not be
deemed to be in breach of contract for suspending performance in accordance
with General Business Law Section 756-B.
All of the time frames established within the contract of a
subcontractor shall be extended for the length of time performance was
suspended. Finally, the subcontractor
is entitled to the payment of documented actual costs incurred for
re-mobilization resulting from the suspension.
DON’T MISS YOUR CHANCE!!!
To
Have an Exhibit at
NESCA’s 23rd
ANNUAL TRADE SHOW
October
9, 2003 – Century House, Latham – 4:00-8:30 pm
Exhibit Space Still Available
Among
those invited to come see YOUR Products and Services are:
General
Contractors * Subcontractors * Architects * Engineers * Contracting Agencies *
Building Owner Representatives
Call the NESCA Office for an Exhibitor Registration Form