Opinion ID: 736908
Heading Depth: 2
Heading Rank: 1

Heading: The Prevailing Wage Law

Text: 2 Section 220 of the New York Labor Law was originally designed to insure that employees on public works projects were paid wages equivalent to the prevailing rate of similarly employed workers in the locality. Because the statute made no reference to fringe benefits, bidders on public works contracts who provided no such benefits were in a position to underbid those who did. Accordingly, section 220 was amended in 1956 to require that all bidders on public works contracts assume the cost of prevailing wage supplements in the locality, N.Y.Lab. Law § 220(3), thus presumably putting all bidders on an even footing. GE I, 891 F.2d at 28. 3 Wage supplements are defined to include all remuneration for employment paid in any medium other than cash, or reimbursement for expenses, or any payments which are not 'wages' within the meaning of the law, including, but not limited to, health, welfare, non-occupational disability, retirement, vacation benefits, holiday pay, life insurance, and apprenticeship training. N.Y.Lab. Law § 220(5)(b). A fiscal officer, who in most cases is the Commissioner of Labor, is authorized to ascertain and determine the prevailing rates of wages and wage supplements for all public works. N.Y.Lab. Law § 220(3) (third undesignated paragraph). Those prevailing rates are determined by reference to collective bargaining agreements between labor organizations and employers, provided such agreements cover at least 30 percent of the workers in the same trade or occupation in the locality where the work is to be performed. N.Y.Lab. Law §§ 220(5)(a), 220(3) (second undesignated paragraph), 220(5)(c). 4 The statute makes the prime contractor on a public works project financially responsible for a subcontractor's failure to comply with the requirements of § 220, and authorizes the fiscal officer to bring an action to enforce its provisions. N.Y.Lab. Law § 223. 5 Exactly how the wage supplements requirement is applied is a crucial matter in dispute between the parties. When we decided GE I, it appears that the State followed a line-item approach whereby the Commissioner of Labor prescribed prevailing benefits levels for each individual type of wage supplement. In each instance where the cost of a supplement provided for in an employment contract did not correspond with the cost of a similar prevailing local benefit, section 220 required the employer either to bring the cost of its prescribed benefit into equivalence with the cost of the local prevailing one or to pay the additional cost directly to the employee-beneficiaries. The employer was not permitted to substitute one form of supplement for another, and received no credit under the statute for the cost of providing benefits not deemed to be prevailing benefits by the Commissioner. 891 F.2d at 27. The Commissioner's position was in accord with the New York Supreme Court, Appellate Division, which held that the statute indicates that the Legislature intended that the Commissioner of Labor, not the contractor, determine the supplements to be provided and that the employee receive either the listed benefits or equivalent cash (or a combination of both). A.L. Blades & Sons, Inc. v. Roberts, 136 A.D.2d 926, 927, 524 N.Y.S.2d 912 (4th Dept.1988) (mem.) The court in GE I concluded that the prevailing wage law applied in this manner was preempted by ERISA. 6 Burgio argues that the State's enforcement procedure during 1992-93, the time-frame relevant here, did not differ from the enforcement procedure used in GE I. The State counters that it abandoned its line-item policy in response to GE I, and adopted what it calls a total package policy. 1 Under this new approach, the State claims that it simply requires employers to match the total cost of all prevailing supplements. Employers are no longer required to match one-for-one the specific prevailing rate for each prevailing supplement, or even to provide each type of prevailing supplement. Thus, according to the State, the total package approach avoids those requirements that led the GE I court to find preemption. The State claims that it used this total package approach in conducting its investigations in this case. 7 The district court did not make an explicit finding on whether the approach claimed by the State was in fact used during the relevant period, believing that the point, even if established, would not sufficiently distinguish this case from GE I. Burgio & Campofelice, 914 F.Supp. at 936.