Prevailing Wage New York: Manage Municipalities
New York is known for its thriving construction industry, with numerous projects being worked on concurrently throughout the state. As a result, it’s vital for contractors, subcontractors, workers, and others associated with public works projects to understand the state's prevailing wages.
In this article, we will discuss the basics of prevailing wage, the penalties for violating prevailing wage, fringe benefits, and how best to manage the different municipalities and localities involved in prevailing wage projects throughout the state.
Not in New York? No problem — we cover the most complex prevailing wage regulations in our state-by-state guide to certified payroll reporting.
New York Prevailing Wage Basics
Understanding the basics is the first step in ensuring your prevailing wage and certified payroll reports are accurate and compliant. By providing the fundamental information, we hope to help you better understand prevailing wage and certified payroll practices to apply them to your business.
According to New York State Labor law, “contractors and subcontractors must pay the prevailing wage rate of wage and supplemental benefits (fringe benefits) to all workers under a public work contract.” Simply put, this means that contractors and subcontractors must adhere to a standardized rate of pay, including benefits, for eligible workers and laborers. But what does that mean, exactly?
What is Prevailing Wage in New York?
The New York prevailing wage rates refer to the minimum hourly wages employers must pay to laborers, workers, and mechanics for their labor.
These rates are set by the New York State Department of Labor (NYSDOL) and the Office of New York State Comptroller. They typically mirror the hourly wage set by union contracts, making them higher than regular wages. This ensures that workers are paid in accordance with the different factors that go into a wage, such as cost of living and availability of labor.
Overall, these wages are in place to ensure fair compensation (including fringe benefits, overtime pay, holiday pay, and more) on public works projects.
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What is the Prevailing Wage Rate?
Now that you understand the what of prevailing wage, it’s important to address the how: how much to pay.
Prevailing wages are determined by the prevailing wage schedules, or determinations, which provide details about labor-related specifics, job classifications, wage rates, and fringe benefits for various occupations and laborers by region. They are required; “all contracts between a government entity and a contractor must contain these schedules” (NYSDOL).
The full schedules for prevailing wage rates are maintained regularly by the NYSDOL and the New York City Comptroller’s Office.
What Are the Laws Governing New York Prevailing Wage?
As a reminder, prevailing wage is codified in New York State law, making it extra important to adhere to.
In New York, prevailing wage is governed by Articles 8 and 9 of New York State Labor Law. According to the NYSDOL, Article 8 covers public construction and Article 9 covers building service contracts.
Again, these laws and regulations ensure that all laborers and workers on public works projects are compensated fairly for their labor. Contractors and subcontractors must be cautious when to adhere to these regulations and all their associated reporting, such as certified payroll reporting.
Stay in Compliance: Calculate Fringe Benefits
Prevailing wage fringe benefits, sometimes known as supplemental benefits, are the additional benefits offered to employees as part of their compensation outside of hourly wage or salary. Employers are responsible for ensuring that the necessary fringe benefits are provided to employees in accordance with prevailing wage requirements.
Potential prevailing wage fringe benefits include health insurance, retirement plans, and paid leave. To calculate the fringe benefit credits, follow these steps:
- Determine the annual amount of fringe benefits that should be credited to each employee. This amount corresponds to the benefit rate based on the prevailing wage rate for each employee.
- Analyze the benefit cost and divide it by the total cost of the benefit given over 40 hours per week in 52 weeks. This calculation provides the hourly amount of the fringe benefit.
- Subtract the hourly amount from the benefit rate to obtain the number of fringe benefit credits.
Additionally, any remaining differences in benefits provided should be deducted from the employee's weekly wage as taxable wages on their paychecks.
Violations and Penalties: The Cost of Non-Compliance
Beyond being illegal, not complying with prevailing wage and certified payroll reporting laws is unfair to your laborers, who deserve to be paid fairly for their hard work. We understand that accidents happen, though, so we wanted to share some reminders about the importance of compliance.
Ensuring compliance with prevailing wage laws is vital to guaranteeing laborers are paid fairly for their work. To ensure compliance, contractors and employers involved in public works projects must determine and pay the proper rate and maintain and submit comprehensive and accurate payroll records.
In addition, they must be aware of effective dates for prevailing wage schedules and adhere to apprentice training ratios, among other requirements.
If an employer or contractor is found to be in violation of these requirements, they may face a combination of fines, contract termination, debarment, or legal action, as well as owing back pay (with potential interest) to the wronged parties. Fines will depend on the severity and frequency of the alleged violation, while repeated violations may result in the termination of the contract and prevention of bidding on future projects.
In addition to the penalties imposed on employers or contractors who violate prevailing wage, violations and penalties may become part of the public record, which could negatively impact future jobs and contracts.
Accidents happen, but making a mistake in your prevailing wage or certified payroll reporting could be costly on many levels, making it extra important to cross all your t’s and dot all your i’s.
Manage Municipalities: Stay on Top of Differing Requirements
Prevailing wage schedules are issued on a county-by-county basis, and contain the pay rates for each work classification. Because prevailing wage rates vary by county, it can be difficult to keep up with the differing requirements and regulations. This is made more complex by the fact that different regions or municipalities may have different reporting requirements.
Below are some of the challenges involved in adhering to New York prevailing wage requirements and our proposed solutions.
The regulations associated with New York prevailing wage can be complex, requiring a thorough knowledge of the laws and regulations across counties. One way to address this concern is to partner with payroll compliance software, like Certified Payroll Reporting, which helps you manage the rates and requirements put in place by varying county regulations.
Maintaining accurate and detailed records is key to staying in compliance, but it can be cumbersome and time-consuming. If you don’t have the resources to spare, consider implementing payroll compliance software that can automate record-keeping and generate the reports you need to be compliant.
New York prevailing wage rates change somewhat frequently, and it’s important to stay up to date on them, which can be difficult with limited resources. To adhere to the latest regulatory changes, follow government guidelines for changes and consider utilizing an integrated payroll reporting system that can streamline rate updates. Or, outsource your rate sourcing and management to a team of experts, like Certified Payroll Reporting’s Full Service team.
Due to the fact that prevailing wage varies based on county, workers in different counties or municipalities may have different prevailing wage requirements. The geolocation tools in your payroll or time and attendance software can help track employees, based on the location of the work.
Deep Dive: New York and Federal Certified Payroll Reports
Filing certified payroll reports can be both time-consuming and resource-intensive. In order to help simplify, we’re breaking down some must-know New York-certified payroll reports to help simplify your certified payroll reporting process.
NYC Office of the Comptroller Bureau of Labor Law Payroll Report
If you are completing work in the City of New York, you will need to submit a NYC Office of the Comptroller Bureau of Labor Law Payroll Report. This report, which can be found here, requires information like worker information, trade classification, project information, wage information, and fringe benefit information.
New York: NYC School Construction Authority Certification
In order to do business with the New York City School Construction Association (NY SCA), businesses (contractors and subcontractors) must be qualified and certified. For more information on the certification, visit the NYC SCA website here.
New York: PW-12
The Department of Labor Weekly Payroll report, or the PW-12, is a form that certifies that the contractor or subcontractor has paid their employees the full prevailing wage required for a given pay period. You can find a sample of this report here.
New York: HC-231
The New York Department of Transportation Contractor’s Payroll Statement, HC 231, is not mandatory on every project, but is required by New York State Highway contractors and subcontractors. It requires information on the contractor or subcontractor, employee, contract description, and deductions. You can download that form here.
Federal: WH-347
Keep in mind, it’s still important to be filing your federal certified payroll reporting, in addition to your state-level reporting. Form WH-347 is the federal version of certified payroll reporting. To file this form, you will need employee or laborer information, work classification, hours worked, rate of pay, amount earned, and deductions.
Certified Payroll Reporting: Prevailing Wage, Simplified
As you can see, a comprehensive prevailing wage software solution like Certified Payroll Reporting can support many of the complexities that come with managing municipalities for New York prevailing wage.
From prevailing wage rates to certified payroll reporting, streamline your operations and ensure effortless compliance with state and federal reporting and rate management requirements. With an easy-to-use interface, generating certified payroll reports — and sending them where they need to go — has never been easier than it is with Certified Payroll Reporting.
Get Started with Certified Payroll Reporting
Whether you’re in New York City or New York State, it’s important to stay in compliance with prevailing wage New York laws and regulations. With Certified Payroll Reporting, it’s as easy as one, two, three.
Whether you choose to use our software or have us manage your compliance entirely through our Full-Service offering, our experts are here to help!