Legislature moves forward with expanding prevailing wage requirements

Measure would give union construction an edge

Mar.March 13, 2019 12:00 PM

Proposals to extend prevailing wage requirements could give a significant competitive boost to the city’s construction unions. (Credit: iStock)

Both houses of the New York legislature backed proposals to extend prevailing wage requirements to certain private developments, a move that could give a significant competitive boost to the city’s construction unions.

Legislation to define “public works” was included in both the state Senate and House’s one-house budget resolutions — further signaling that changes are likely to be approved this year. Though attempts to pass similar legislation has failed in previous years, Gov. Andrew Cuomo has already expressed support for passing an extension of prevailing wage requirements this year.

Changing the definition of public works as proposed in these measures would be a boon for the state’s construction unions, since it would essentially require union-level wages on all projects receiving public funding. This would potentially make union shops more competitive with the city’s rising tide of nonunion contractors, who would no longer be able to boast lower wages on such projects.

The latest version of the legislation, in both houses, added a few carveouts on Tuesday. Projects “eligible for benefits” under the 421a tax break would not be considered public work. Though, larger projects (rental buildings with 300 units or more in certain areas of the city) that receive 421a are already subject to certain construction wage requirements.

The bills also specify that affordable housing projects where at least 75 percent of the units are dedicated to residents making 60 percent of the area median income (AMI) or less are excluded. In its budget resolutions, the Senate acknowledged concerns about the legislation potentially having a negative impact on affordable housing, as well as it disproportionately affecting minority construction workers.

“The final proposal should recognize regional cost differentials among the state… ensure development in all regions of the state continues, preserving opportunities for MWBEs, and preserve the development of affordable housing,” the resolution states.

The progress of this legislation comes amid the ongoing debate over union and nonunion construction labor. Last week, Related Companies and the Building and Construction Trades Council called a truce in their fight over the hiring of nonunion labor at Hudson Yards, a development that has depended heavily on public funding. Related agreed to negotiate with the BCTC and individual unions going forward. Over the last 10 years, Hudson Yards has reportedly received about $6 billion in government tax breaks and incentives.

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