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THE SENAtE
STATE QF NEW YORK
THQ44AWLAVEP84C
so'.- o*symer ALBANY

cowmftte CN rove.v-cM

June 9, 1971

Hon. t?ichael Whiteman

Executive Cita:ber
State Capit.cl
Aliany , New Ycrk 1223

R11: Senate Bill 102:3-A

by f<r. Laverne

Dear icr. Whiteman:

As requested you will find enclosed a copy or

a F.er.orandar tr. suppcrt of t'r.e aLcve mer.tior.ed
legislation.

Ycur rev:rat'e c:r.:ideration is respectfully

requested,

Sincerely,

henas Laverr,e

iir.c-ocure
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-M E - O
- M - -R -A -N -D -U M
-

S. 1943-A A. 350B AN ACT to amend the labor law, in

relation to prevailing wages
By: Laverne By: 3ersani for service employees

PURPOSE OF BILL:

To require the payment of prevailing wages and fringe benefits

to employees who work under building service contracts with State and
local governmental agencies.

SUMFARY OF PROVISIONS:

The bill adds a new Article to the Labor Law, Article 9,

Prevailing Wage for Building Service Employees, It would require a
contractor who has a building service centract in excess of 52,500 with
the State or with any State or local governmental agency to pay the
prevailing wage in the locality to his service employees. Prevail:.ng
wage would includer (a) the basic hourly cash rate of pay; and (b:
supplements or fringe benefits, as deterrined by the fiscal officer.
Locality is defined as the State, a town, city, village other civil
division or area of the State, as determined by the fiscal officer.
The fiscal officer is the Industrial Corr.issioner outside of cities,
and in cities the Corptroller is the fiscal officer. A building
service employee is defined as any person working in connection with
the care or maintenance of an existing building and inc'.udes, but is
not limited to, a window cleaner, watchmar,, guard, doorman, building
cleaner, porter and har.dyman, janitor, gardener, groundskeeper,
stationary fireman, ar.d elevator opera.tor and starter, but does not
include clerical, sales, professional, technicim and related
occupations.

Every building service contract would have to obligate the

contractor to pay prevailing wages. The fiscal officer is ac.thor:.zed
to issue rules a.nd regulations after a public hearing and such rules
could provide for reasonable variaticas, tolerance and exemptions.
in ceterriming the prevailing wags the fiscal officer could utilize
wage and fringe benefit data frc: various sources, includanc data
and determinations of Federa.1, hats or other governmental agencies.

he provisions ralating to proce.dures, penalties and

discrimination (sex and ara d·.sc:iri:.ition have been added) arz be.sed
en the provisions in Arts:-s 5 ci the La;:r Law coverr.ing prevaihng
wcges on public work projecca.

7:.is bill would extoni :: hai'.iL:.r scr•:ice Gap loyú o3 9:o':ZG n f

ader goverrs.ental contracts the -::qe p::tcc:ion r.ow afforded cc
.werers, workmen and n:chcI:2. árpo·•.of :..: p 11: we k prcSans.
: wc. .6 ast.tblish in W.: .':rk Fut. ancard ncw ecvared fct T.L.:.:...
.··:nrnmentr. contracts by the Fah:al :. . a:.L::a-G'Kars. %:vics L'c:.e.::.c

?aderr.1 Laws now : :..6 ,3c×:,ci.t of prevail:.ng wagëe c:

acts for public work c 3-hoon:, for purchase of r.4 :...-.
..... .-jiealeyi, and for sm: ich v.cr.< ..dar public contracts . : .
. State law re¾rax .-,rova..... 'ages on pul;c :..
only
. ..5 ('iocr -.as, /ct.c-a .i .. .. ..e. ..-, fc: the purchc.....e a.
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S. 1943-A
Page 2

attached bill that leave to the administrative agency the defining

of wage" "locality"
"prevailing and and that permit the making of
variations and exemptions as required make it possible to conform and
adjust the application of the law to priority needs and limitations
of available data. They avoid the exorbitant and probably prohibitive
effort that would be required to proceed in accordance with the
procedures of Article 8 of the Labor Law.

Second, having a law and procedural pattern that was similar

to that governing Federal service contracts in New York State would
minimize confusion that might otherwise occur among employers and
workers and the State and Federal agencies involved.

Third, it would make possible the utilization of a substantial

amount of wage and fringe benefit data already available through
established surveys of Federal and New York State agencies.

It must be noted that the attached bill is limited to building

service employees, rather than applying to all service employees
working under public contracts .

FISCAL IMPLICATIONS:

The bill would not become effective until April 1, 1972 and no
appropriation is provided for fiscal year 1971-1972, For subsequent
fiscal years, it is estir.aced that costs under the attached bill
would probably not exceed S150,000.

The attached bill qives the Industria'.. Commissioner wide latitude

ar, determining the contracts and occupations within contracts for
which determinations will be rade (along with broad discretion as to
ine use of available data and definition of locality) and if the
Industrial Commissioner ca-. limit his enforcement to cases of complaint
cr on some other highly selective ba.sia, then he can to some extent
tailor his acts.vities in carrying out the law to what the bud get
provides. After a year or so of experience, the Department would be
in a better position to k:ow what commitrants it could make as to
secpe of prevailing wa ge deternination, en forcement and bud get.

EFF ECT'vT DATE:

April 1, 1972.
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omCEor

THE INDUsTRIAL COMMISSIONER

ALBANY

DEPARTMENT OF LABOR June 15, 1971

SENATE: 1943-A Introduced by: Mr. Laverne

RECOMMENDATION: Approval.

STATUTE INVOLVED: Labor Law, edding thereto a new article, to be Article 9.

EFFECTIVE DATE: April 1, 1972.

DISCUSSION:

L. Purpose of b111:

To require the payment of prevailing wages and fringe benefits to employees who work
under the building servi.ce contracts with State and local governmental agencies,

2, Summary of provisions of bill:

The bilL adds a new Article to the Labor Law, Article 9, Prevailing Wage for Building
Service Employees. It would require a contractor who has a building service contract
i.n excess of $2,500 with the State or with any State or local governmental agency to
pay the prevailing wage in the Locality to his service employees. Prevailing wage would
include: (a) the basic hourly cash rate of pay; and (b) supplements or fringe benefits,
as determined by the fiscal officer. Locality is defined as the SI:ate, a town, city,
village or other civil division or area of the State, as determined by the fiscal
officer. The fiscal officer is the Industriat Commissioner outside of cities, and tr
cirtes the Comperoller 1.s the fiscal officer. A building service employee is defined
as any person working in connection with the care or maintenance of an existing
building and includes, hut is not limited to, a window cleaner, watchman, guard, doorman,
building cleaner, porter and handyman, janitor, gardener, groundskeeper, stationary
fireman, and elevator operator and starter, but does not include clerical, sales,
professional, technician and related occupations.

Every building service contract would have to obligate the contractor to pay prevailing
wages, The fiscal officer is authorized to issue rules and regulations after a public
hearing and such rules could provide for reasonable variations, tolerances and
osenptions. In deter-tining the prevailing wage the fiscal officer could utilize wage
and fringe data from various sources, including data and determinations of Federal,
State or other governnsental agencies.

The provisions relating to procedures, penalties and discrimination (sex and age
discrir.ination have been added) are based on the provisions in Article 8 of the Labe-
Law soverning prevailing wages on public work prefects.

The bill would becons effective April 1, 1972.

3. Prior legislative history:

1969 a bill would have extenced coverage of the public work prevailing wage tau
!L:r or Law, Artich 9) co alt service employees (Laverne, S, 4468), The bill vas passed
fr m: Se.at, and rea ed Third Panding in the Assembly,
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. DEPARTHENT OF 1ABOR a 2 - June 15, 1971

SENATE: 1943-A Introduced by: Mr. Laverne

In 1970 the 1969 hill was amended to add a new Article 9 to the Labor Law to require
the payment of prevailing wages in the locality to service employees. Procedures for
determining prevailing wages were aimilar to those now existing for public work
projects (Laverne, 5. 4468-B). The bill passed the Senate with a message of necessity
from the Governor, but did not come out of the Rules Committee.

In the current legislative session the 1970 bill has assin been introduced and is
now pending (Laverne, S. 1943, same as Bersant, A. 3508).

4. Statements in support of bill:

This bill would extend to building service employees working under governmental
contracts the wage protection now afforded to laborers, workmen and mechanics employed
on public work projects. It would establish in New York State a standard now covered
for Federal governmental contracts by the Federal McNamara-0'Hara Service Contract Act.

Federal laws now require the payment of prevailing wages on contracts for public work
(Davis-Bacon), for purchase of supplies (Walah-Healey), and for service work under
public contracts (McNamara-0'Hara). State law requires prevailing wages only on public
work projects (Labor Law3 Article 8),. Nowever, for the purchase of supplies the general
specifications of the State Office of General Services call for the payment of prevailing
wages. The attached bill would extend the prevailing wage concept to building service
contracts with State and local governmental agencies, It sust be noted that governmental
contracts are awarded to the lowest bidder and that since labor costs are a predominant
factor in most service contracts the bidder with higher wage standards is at a competitive
disadvantage.

Patterned after the Federal approach, the bill has several advantages over a bill
adopting the prevailing wage procedure in the public work law. First, the provisions in
the bill that leave to the administrative the defining of "prevailing wage" and "It
agency
cality" and that permit the making of variations and exemptions as required rnake it
possible to conform and adjust the application of the law to priority needs and limica-
tjons of available data. They avoid the exorbitant and probably prohibitive effort that
would be required to proceed in accordance with the procedures of Article 8 of the Labor
Law,

Second, having a law andprocedural pattern that was similar co that governing Federal
service contracts in New York State would minimize confusion that might otherwhe occur
among employers and workers and the State and Federal agencies involved.

Third, it would make possible the utilization of a substantial amount of wage and fringe
benefit data aircady available through established surveys of Federal and New York State
agencies.

It emst be noted that the bill is Itmited to building service employees, rather than
applyire to all service employees working under public contracts,

5,. Fossible- ebjut.ions to M11:

0ppmition to the proposal from financially hard-pressed municipalities may be expected.

Snides the additional expenditures that will be required in awarding building service
<.1ntracts, municipalities may be confronted with demands from their direct service
--pleyees for corparable wages. In the light of the burden that this hill would impose
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D£FARTMENT OF IABOR - 3 - June 1971

15,

SENATE: 1943-A Introduced by: Mr. Laverne

on municipalities, and in the absence of a clearly established it in questionable

need,
whethet this bill is justified.

6. Other State agencies interested in bill:

All State agencies, as well as municipal agencies, and the State Office of General
Services will be interested in this bill. The bill also will affect employera who
provide building service work to governmental agencies.

7. Known position of others respecting bill:

The Building Service Employees Union, AFL-CIO, has strongly urged the adoption of a
prevailing wage for service cmployees. The State A‰C10 has endorsed such a proposal.

8. Budget implications:

The bill would not become effective until April 1, 1972 and no appropriation is provided
for fiscal year 1971-72. Por subsequent fiscal years, it is estimated that costs under
this bill would probably not exceed $150,000.

The bill gives the industrial commissioner wide latitude in determining the contracts
and occupations within contracts for which determinations will be made (along with
broad df,scretion as to the use of available data and definition of locality) and if the
Industrial Cotanissioner can limit his enforcernent to cases of complaint or on some other
highty selective basis, then he can, to some extent, tailor his activities in carrying
out the law to what the budget provides. After a year or so of experience, the
Department would be in a better position to know what commitments It could make as to
scope of prevailing wage determination, enforcement and budget.

ouis L. vi
In s r I CommissLoner
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30-DAY BILL
SUDGET REPORT OH Stt05 5•*is•nY•er* 1923.

5ENATE Introdecedby: A55ttaBLY

Ne, 1943-A Mr. Laverne No.

Law: Labor 5•=H•p** Article 9 (new)

Dubion of ne Bade•* recommendance on me above bib

a:p·ov- X vviva w.osg.co.. N.necomm.ng.ison: .

"1 and Purpose: To require payment of prevailing wages and fringe benefits
to employees who work under building service contracts with State and local
governmental agencies.

2. Summary of provisions: The Labor Law now requires that employees

engaged in work on "public works" (construction of public roads and facilitie
must be paid the prevailing wage available to employees working for contracto
on private construction jobs. There is no such provision governing the
wages or other working conditions of employees working for contractors
providing a service to the State and local governments.

This bill would add a new Article 9 in the Labor Law under which
prevailing wages and benefits would have to be paid employees of contractors
who have building service contracts in excess of $2,500 with the State or
other units of government. Labor Law provisions now applicable to certain
other employees prohibiting discrimination, requiring con'tractors to have
sufficient funds to meet their payroll and requiring additional compensation
for work in excess of a standard workday, would be extended to those
covered under this bill.

Prevailing wages would be determined by the fiscal officers of cities

and by the Industrial Commissioner for other governmental units.

The bill would take effect April 1, 1972,

3. Legislative history: A 1969 measure (S. 4468) would have extended

coverage of tne hpublic works" wage law to all service
prevailing employees,
That measure was passed by the Senate but died in the Asiembly, It was
then amended in 1970 (S. 4468-B) to a version similar to the present
measure but without the present safeguards and restrictions. That measure
passed the Senate with a message of necessity from the Governor but died
in the Assembly Rules Committee.

4. Arguments in support: (aj Currently, the State excludes service

employees of private contractors performing public 5 rk from coverage
under the prevailing wage provisions, There appea f ittle support for
this exclusion since construction employees of other private contractors
performing public work are included under that provision. The principal
cost in service contracts is for the labor involved. A contractor who

Examinen _....__...._ .. .... .

o·tpe3mon· Chapter No. Yeto No.

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Labor - 2 - 1971

can provide a service by paying rates below the prevailing wage will be
able to underbid his competitors paying wages. It should be
prevailing
noted that the former are most likely nonunion organizations while the
latter tend to be employers whose employees are organized.

(b) Mands±g that building service contractors pay a prevailing wage

would appear to satisfy the demands of unions representing such employees
while insuring that employees of service contractors on State and local
projects receive wages commensurate with the standards of the community
served. There is no compulsion for the State or local governments to
contract only with union shops.

(c) This bill, unlike earlier versions, would clearly not apply to
any public employees. A major objection to past bills was the possible
establishment of a precedent of extending prevailing wage provisions to
public employees, at potential costs in the ten's of millions of dollars.

5. Possible objections:(a)The State Department of Labor has pointed out,

in an April 7, 1971 memorandum to Michael Whiteman, that municipalities
may be required to make additional expenditures under this bill as well as
being confronted with demands from their own employees for increased wages.
The memorandum notes that, "In the light of the burden that this bill
would impose on municipalities, znd in the absence of a clearly established
it is questionable justified." We have
need, whether this bill is learned,
however, that the Department does not have any statistics to indicate the
potential impact of this measure and the policy which justifies such
expenditure is already enunciated by the existing prevailing wage provisions.

(b) It may be argued that all service employees working for contractors
providing services to the State and local governments should be covered
by these provisions. Apparently the bulk of such employees will be
covered by this bill.

6. Other State agencies interested: The present bill was drafted by the
State Department of Labor and, although not a departmental measure, has
been considered to be an Administration bill, The Office of General
Services would have an interest in this bill.

7. Known position of others: This hill is a high priority measure of

the ach York state Legislative Conference of Building Service Unions.

8. Budget implications: The State has some $1 million worth of contracts

of the type which would e vered 4 this bill. While no information is
available as to numbers thfe .d"by such contracts who are currently being
paid prevailing wages, the cost of this proposal to the State should be
modest.
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