New Liability for Contractors

New Law Makes Contractors Responsible For Wages Owed To Their Subcontractors' Employees


New York State Governor Kathy Hochul signs legislation to " boost workplace safety and put more money in workers' pockets", on September 6, 2021 in Buffalo, NY. (OFFICE OF GOVERNOR KATHY HOCHUL)

On Labor Day, New York State Governor Kathy Hochul signed four key pieces of legislation. Among them, Legislation (A.3350-A/S.2766-C) “makes contractors on construction projects jointly liable for wages owed to employees of their subcontractors. Construction contractors are currently not liable for the wages of their subcontractors' employees unless there is an employment relationship between the contractor and the employee of the subcontractor. This bill applies prospectively to contracts entered 120 days after the bill becomes law. It also allows contractors to demand payroll information from subcontractors and withhold payment if the information is not provided.”


The bill is welcomed by some but criticized by others.


New York City District Council of Carpenters Executive Secretary-Treasurer Joseph Geiger said, "For years, exploited workers have been ripped off by greedy contractors with nowhere to turn. This legislation will ensure every construction worker in New York is protected from wage theft. It is especially fitting that it will be signed into law by Governor Hochul who has been a steadfast ally of labor and workers everywhere. The New York City District Council of Carpenters also thanks Senator Ramos and Assembly Member Latoya Joyner for leading the charge to pass the bill in the State Legislature. This is proof that government can still be a positive force for the workers of America."


The legislation has been opposed by the Associated General Contractors of New York State, which represents union and open shop construction companies. In a memorandum of opposition released earlier this year, the AGC NYS describes the bill as “a misguided attempt to shift the blame from unscrupulous subcontractors to the general contractor or construction manager,” and that it “should be kept under the jurisdiction of the New York State Department of Labor, New York State Attorney General and District Attorneys to investigate, charge and penalize any employer.” AGC NYS cautions that “the significant costs associated with the project risk will have a chilling effect on economic development.”


The other three pieces of legislation signed by Governor Hochul on September 6, 2021 are:


Legislation (S.4682-B/A.485-B) Establishes a Demonstration Program Implementing Speed Violation Monitoring Systems in Work Zones


Legislation (S.6350-A/A.7434-A) Requires the Payment of Prevailing Wage to Building Service Employees at Co-Cops and Condos that Receive the 467-a Tax Abatement


Legislation (S.4049/A.5678) Extends Shared Work Benefits


The release issued by the Governor’s Office can be found here.