Relates to reciprocity of debarments imposed under the federal Davis-Bacon act to prevent contractors who have violated certain labor provisions on federal work projects from bidding on or being awarded state public work projects.
TITLE OF BILL: An act to amend the labor law, in relation to reciprocity of debarments imposed under the federal Davis-Bacon Act
PURPOSE: The purpose of the bill is to close a loophole in the existing law relating to the debarment of contractors. Under the current law, contractors who have been debarred from federal job sites for having violated the wage-and-hour provisions of the Davis-Bacon Act .are under no such disability in New York, Federally debarred contractors are on an equal footing with honest, law-abiding contractors in that they are eligible and authorized to bid on and be awarded construction contracts sponsored by the State of New York and its political subdivisions. This bill would remedy that inequity by granting reciprocity to debarments imposed by the federal government on contractors who have violated the Davis-Bacon Act.
SUMMARY OF PROVISIONS: The bill provides that any contractor who has been debarred from federal job sites for having disregarded obligations to employees under the Davis-Bacon Act shall also be debarred under the Labor Law from bidding on or being awarded similar contracts on public work job sites sponsored by the State or any of its political subdivisions.
JUSTIFICATION: Under Article 8 of the Labor Law, contractors or subcontractors who engage in a public work project sponsored by the State of New York or any of its political subdivisions is required to pay their laborers, workers and material men not less than the prevailing rate of wage. This law has a long and venerable history. New York passed its wages-and-hours law in 1894 in response to abuses that emerged during the industrial revolution, when entire families were forced to work long hours under dangerous working conditions for subsistence wages. The rationale behind the law was that American labor markets should provide skilled workers with decent wages so that workers would be able to support their families and their children would be able to pursue an education.
In recent years, New York's prevailing wage law has acquired additional stature as a bulwark against wages-and-hours fraud. Recent studies indicate that fraud in the construction industry in New York State has reached epidemic proportions. Dishonest contractors, in an effort to cut corners and save on labor costs, have engaged in a number of schemes to avoid paying workers the wage to which they are statutorily entitled. They include the kickback of wages, dual payrolls and cash-off-the-books schemes.
The practice of paying wages in the form of cash-off-the-books has come to be known as "the underground economy," and it has deleterious and far-reaching consequences for the individual workers, reputable contractors and society as a whole. Analysts report that one of the most invidious effects is that it has a profoundly destabilizing effect on labor markets by destroying the level playing field. Honest
employers, who are incurring significant additional operating expenses in the form of unemployment insurance tax, administrative costs for the collection of with holding taxes and the high premiums associated with workers compensation insurance are unable to compete for work with their dishonest counterparts.
Mindful of the crisis in the construction industry, in 2008 the legislature passed, and the governor signed into law, a far-reaching amendment that significantly expanded the criminal penalties for willful violations of the prevailing wage law. (Chapters 7 and 8, L. 2008). But the first line of defense in protecting both workers and honest employers are the debarment provisions set forth in Labor Law
§ 220-b. Under the existing law, a contractor may be debarred from participation in public work projects if the Bureau of Public Works finds that the contractor has knowingly committed two violations of the prevailing wage law within a six-year period, or one violation relating to the falsification of payroll records or the kickback of wages or supplements. Debarments are also imposed when a person or corporation, or any officer or shareholder who owns or controls at least ten percent of the outstanding stock of such corporation has been convicted of any of an enumerated list of felonies for conduct relating to obtaining, performing or attempting to perform a public work contract with the state, any municipal corporation, public benefit corporation or public body (q.v., Labor Law §220-b 3b(2) (ii)).
Its federal counterpart, the Davis-Bacon Act, imposes a similar penalty on contractors who are found to have disregarded their obligations to employees under federal wage-and-hour laws. At the present time, however, New York Labor Law fails to recognize debarments imposed by the united States Department of Labor under the Davis-Bacon Act. Hence, contractors who have been debarred by the federal government for wage-and-hour violations are permitted to bid on and be awarded public work contracts or subcontracts offered through the State of New York and its political subdivisions.
Working at a public work job site is a privilege, not a right. New Yorkers are entitled to expect the highest standard of integrity from contractors who bid on these projects. It is inequitable to allow previously debarred contractors - contractors who have a proven track record of dishonesty to compete against honest contractors in the bidding process. By strengthening the debarment provisions, this amendment should help to ensure that honest employers and their workers will have an equal opportunity to compete at public work job sites.
LEGISLATIVE HISTORY: 2010 - Died in Labor Committee.
FISCAL IMPACT ON THE STATE: None.
EFFECTIVE DATE: This act shall take effect immediately.
STATE OF NEW YORK ________________________________________________________________________ 1815 2011-2012 Regular Sessions IN SENATE January 13, 2011 ___________Introduced by Sen. SAVINO -- read twice and ordered printed, and when printed to be committed to the Committee on Labor AN ACT to amend the labor law, in relation to reciprocity of debarments imposed under the federal Davis-Bacon Act THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Paragraph b of subdivision 3 of section 220-b of the labor law is amended by adding a new subparagraph 3 to read as follows: (3) WHEN ANY PERSON OR ENTITY IS DEBARRED FOR HAVING DISREGARDED OBLI- GATIONS TO EMPLOYEES UNDER THE DAVIS-BACON ACT PURSUANT TO 40 U.S.C. 3144 AND 29 C.F.R. 5.12, SUCH PERSON OR ENTITY, AND ANY FIRM, CORPO- RATION, PARTNERSHIP, OR ASSOCIATION IN WHICH THE PERSON OR ENTITY HAS AN INTEREST, SHALL BE INELIGIBLE TO SUBMIT A BID ON OR BE AWARDED ANY PUBLIC WORKS CONTRACT WITH THE STATE, ANY MUNICIPAL CORPORATION, PUBLIC BENEFIT CORPORATION OR PUBLIC BODY, FOR A PERIOD OF THREE YEARS FROM THE DATE ON WHICH THE NAME OF THE PERSON OR ENTITY IS PUBLISHED IN THE LIST OF DEBARRED CONTRACTORS PURSUANT TO 40 U.S.C. 3144. S 2. This act shall take effect immediately.EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD06920-01-1