senate Bill S125

2013-2014 Legislative Session

Broadens scope of prevailing wage requirements for service employees and establishes criminal penalties for violations

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Archive: Last Bill Status - In Committee


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor

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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Jan 08, 2014 referred to labor
Jan 09, 2013 referred to labor

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S125 - Bill Details

Current Committee:
Law Section:
Labor Law
Laws Affected:
Amd Art 9 Art head, §§230, 231, 235, 237 & 238, Lab L
Versions Introduced in Previous Legislative Sessions:
2011-2012: S1023
2009-2010: S8379A

S125 - Bill Texts

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Broadens scope of prevailing wage requirements for service employees and establishes criminal penalties for violations.

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BILL NUMBER:S125

TITLE OF BILL:
An act
to amend the labor law, in relation to prevailing wages for
service workers

PURPOSE:
This bill strengthens and clarifies Article 9 of the Labor Law to
ensure that workers employed to provide service work for the benefit
of public agencies are paid the prevailing wages to which the law
entitles them.

SUMMARY OF PROVISIONS:
Section 1 - The bill renames Article 9 of the Labor Law
"Prevailing Wage for Service Employees" and makes changes
in two basic areas:

Section 2 - Definitions in §230 are clarified to ensure that
they clearly apply
to all appropriate categories of service work for public agencies:
(1) The terms "building service employee" and "building service work"
are changed to "service employee" and "service work" throughout the
article, in order to more accurately reflect the types of service
work commonly required by public agencies. The definition of "service
employee" is clarified to reflect the fact that service work often is
not restricted to building interiors, but can also include care,
maintenance and patrolling of outdoor areas, such as parking lots,
grounds and other outdoor work sites.
(2) The definition of "service work" is amended to delete the
exemption for public utility services, and to explicitly include
service work performed under a contract with any third party person
or entity acting in place of, on behalf of and for the benefit of a
public agency pursuant to a lease or other agreement. The definition
of "public agency" is amended to include public utility services
provided by a public authority or by a public utility selling gas,
electric or steam services at retail rates under a franchise granted
by the Public Service Commission (including any substantially-owned
entity affiliated with the public utility).
(3) The definition of "person" (from Article 8) is added to ensure the
law is enforceable against partnerships, joint ventures and other
forms of organization.

Section 3 - Safeguards against abuse are added and time-tested
enforcement
tools are borrowed from Labor Law Article 8 (prevailing wages for
public work) to ensure compliance:
(1) A new subdivision 8 is added to §231 to clarify that prevailing
wage requirements cannot be evaded by any lease or other agreement
with a public agency and a third party person or entity, and that in
any such arrangement the third party acts as the agent of the public
agency. Any such arrangement must be predicated on the filing of an
agreement delineating the respective responsibilities of the public
agency and the third party with respect to reporting, filing and
retention of payrolls and other requirements imposed by Article 9,
and receipt of a written


acknowledgment from such person or entity affirming such person or
entity's non-delegable obligation to ensure payment of prevailing
wages. The subdivision also provides that no such agreement shall be
deemed to relieve the public agency of its responsibilities to ensure
compliance with this article, that any lease or agreement purporting
to do so shall be void as a matter of public policy, and that the
appropriate fiscal officer may take all actions to ensure compliance
with the statute by both the public agency and any third party entity.
Section 4 - A new § 235(2)(g) is added to apply enforcement tools
that have
long been a part of Article 8. Specifically, this paragraph empowers
the fiscal officer to request and receive payroll records from the
person or entity who is responsible for paying the service employees,
and authorizes partial (up to 25%) withholding of payments to any
such person or entity that fails to produce the records.
Section 5-
Section 237 is amended to import other enforcement tools from
Article 8 that make willful failure to file payroll records with the
public agency a class E felony, and that require public agencies to
designate an individual responsible for the receipt, collection and
review for facial validity of contractors' certified payroll
statements before payment is made.
Section 6 - Amendments to §238(2) increase the criminal penalties
for failure
to pay service work prevailing wages to a misdemeanor and the greater
of $2,500 or double the amount of underpayments for a first violation
and a class E felony and the greater of five thousand dollars or
three times the amount of underpayment, and forfeiture of a contract,
for a second or subsequent relation.

JUSTIFICATION:
Currently, the prevailing wage law for service employees lacks many of
the procedural safeguards and enforcement tools that have long been
incorporated into Article 8. Combined with some ambiguous or outdated
definitions, this has left the door open for efforts to avoid paying
prevailing wages for service work performed for public agencies. This
bill would bolster the ability of enforcement agencies to ensure that
service employees receive the prevailing wages to which they are
entitled.

For almost forty years, Article 9 of the Labor Law has promoted the
public policy that workers who perform service work on behalf of
public agencies should be paid the prevailing wage for such
employment in their communities. Over that time, substantial
experience has been gained over what provisions of the law require
strengthening to prevent abuses. This bill clarifies the definitions
and applicability of Article 9 and adds provisions that are analogous
to several enforcement tools that have long been a part of Article 8,
in order to ensure that prevailing wages are paid for all appropriate
service work.

PRIOR LEGISLATIVE HISTORY:
2011-12: S.1023
2010: S.8379-A/A.10257-D Vetoed by Governor

FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:


Any fiscal implications are completely dependent on specific
agency/worksite circumstances, including when current contracts or
agreements expire or are up for renewal and what terms are negotiated
in the future.

EFFECTIVE DATE:
Ninetieth day after enactment, to apply to all contracts or other
agreements entered into, renewed, or extended on or after such date.
However, the amendments to subdivision 4 of section 230 of the Labor
Law made by section two of this act shall be subject to the
expiration and reversion of such subdivision pursuant to section 5 of
chapter 678 of the laws of 2007, as amended, when upon such date the
provisions of section four of this act shall take effect.
Furthermore, the amendments to subdivision 5 of section 231 of the
Labor Law made by section three of this act shall be subject to the
expiration and reversion of such subdivision pursuant to section 5 of
chapter 678 of the laws of 2007, as amended, when upon such date the
provisions of section five of this act shall take effect.

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                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                   125

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                               (PREFILED)

                             January 9, 2013
                               ___________

Introduced  by  Sen. PERALTA -- read twice and ordered printed, and when
  printed to be committed to the Committee on Labor

AN ACT to amend the labor law,  in  relation  to  prevailing  wages  for
  service workers

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. The article heading of article 9 of the labor law, as added
by chapter 777 of the laws of 1971, is amended to read as follows:
             PREVAILING WAGE FOR [BUILDING] SERVICE EMPLOYEES
  S 2. Subdivisions 1, 2, 3, 4, 6, 8, 9 and 10 of  section  230  of  the
labor  law, subdivision 1 as amended and subdivision 9 as added by chap-
ter 542 of the laws of 1984, subdivisions 2, 3, 6  and  8  as  added  by
chapter 777 of the laws of 1971, subdivision 4 as amended by chapter 678
of  the  laws  of 2007 and subdivision 10 as added by chapter 547 of the
laws of 1998, are amended and a new subdivision 15 is added to  read  as
follows:
  1.  "[Building  service]  SERVICE  employee"  or  "employee" means any
person performing JANITORIAL, OR SECURITY SERVICE WORK FOR A CONTRACTOR,
OTHER THAN A BUSINESS IMPROVEMENT DISTRICT, UNDER CONTRACT WITH A PUBLIC
AGENCY WHICH IS IN EXCESS OF TEN  THOUSAND  DOLLARS  AND  THE  PRINCIPAL
PURPOSE  OF  WHICH  IS  TO  FURNISH  SERVICES THROUGH THE USE OF SERVICE
EMPLOYEES, OR ANY OTHER PERSON PERFORMING work in  connection  with  the
care  or  maintenance of an existing building, or in connection with the
transportation of office furniture or equipment to or from  such  build-
ing,  or  in  connection  with the transportation and delivery of fossil
fuel to such building, for a contractor under a contract with  a  public
agency  which  is in excess of [one] TEN thousand [five hundred] dollars
and the principal purpose of which is to furnish  services  through  the
use of [building] service employees.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD00341-01-3

S. 125                              2

  "[Building  service]  SERVICE employee" or "employee" includes, but is
not limited, to, watchman, guard,  doorman,  building  cleaner,  porter,
handyman, janitor, gardener, groundskeeper, stationary fireman, elevator
operator  and  starter,  window cleaner, and occupations relating to the
collection  of  garbage  or  refuse, and to the transportation of office
furniture and equipment, and  to  the  transportation  and  delivery  of
fossil  fuel but does not include clerical, sales, professional, techni-
cian and related occupations.
  "[Building service] SERVICE employee"  or  "employee"  also  does  not
include  any  employee  to  whom  the  provisions  of articles eight and
[eight-a] EIGHT-A of this chapter are applicable.
  2. "[Building service] SERVICE work" [or "service  work"]  means  work
performed  by  a  [building] service employee, but does not include work
performed for a contractor  under  a  contract  for  the  furnishing  of
services  by  radio,  telephone,  telegraph or cable companies[; and any
contract for public  utility  services,  including  electric  light  and
power,  water,  steam  and  gas]. "SERVICE WORK" SHALL ALSO INCLUDE WORK
PERFORMED UNDER A CONTRACT, WITH THE EXCEPTION OF A CONTRACT OR  SUBCON-
TRACT IN WHICH A BUSINESS IMPROVEMENT DISTRICT IS A PARTY, FOR THE BENE-
FIT  OF  A PUBLIC AGENCY WITH ANY THIRD PARTY PERSON OR ENTITY ACTING IN
PLACE OF, ON BEHALF OF OR FOR THE BENEFIT OF SUCH PUBLIC AGENCY  IN  THE
PROVISION  OF  BUILDING  OR  PROPERTY  MANAGEMENT  SERVICES  OR  SIMILAR
SERVICES PURSUANT TO ANY LEASE OR OTHER  AGREEMENT  BETWEEN  SUCH  THIRD
PARTY  PERSON  OR  ENTITY  AND THE PUBLIC AGENCY PROVIDED, HOWEVER, THAT
"SERVICE WORK" SHALL NOT INCLUDE WORK PERFORMED UNDER A LEASE OR SIMILAR
AGREEMENT IN A PRIVATELY OWNED BUILDING WHERE THE SPACE OCCUPIED BY  THE
PUBLIC AGENCY REPRESENTS LESS THAN TEN THOUSAND SQUARE FEET.
  3. "Public agency" means the state, any of its political subdivisions,
a  public  benefit  corporation,  a public authority, INCLUDING A PUBLIC
AUTHORITY PROVIDING PUBLIC UTILITY SERVICES, or  commission  or  special
purpose  district  board  appointed  pursuant  to  law, [and] a board of
education, AND ANY PUBLIC UTILITY THAT  DISTRIBUTES  ELECTRIC  LIGHT  OR
POWER,  OR GAS OR STEAM SERVICES AT RETAIL RATES REGULATED BY THE PUBLIC
SERVICE COMMISSION PURSUANT TO A FRANCHISE GRANTED UNDER THE  PROVISIONS
OF  SECTION SIXTY-EIGHT OR EIGHTY-ONE OF THE PUBLIC SERVICE LAW, AND ANY
SUBSTANTIALLY-OWNED AFFILIATED ENTITY OF SUCH PUBLIC UTILITY.
  4. "Contractor" means any employer who employs  employees  to  perform
[building]  service work under a contract with a public agency and shall
include any of the contractor's subcontractors.
  6. "Prevailing wage" means the wage determined by the  fiscal  officer
to be prevailing for the various classes of [building] service employees
in  the locality. In no event shall the basic hourly cash rate of pay be
less than the statutory minimum wage established by article nineteen  of
this  chapter, or, in a city with a local law requiring a higher minimum
wage on city contract work, less than the minimum wage specified in such
local law.
  8. "Fiscal officer" means the [industrial]  commissioner,  except  for
[building]  service  work  performed by or on behalf of a city, in which
case "fiscal officer" means the comptroller or other  analogous  officer
of such city.
  9.  "Fossil  fuel" shall mean coal, petroleum products and fuel gases.
"Coal" shall include bituminous coal, anthracite coal and lignite. "Fuel
gases" shall include but not be limited to methane, natural gas,  lique-
fied natural gas and manufactured fuel gases. "Petroleum products" shall
include all products refined or rerefined from synthetic or crude oil or
oil  extracted  from  other  sources,  including  natural  gas  liquids.

S. 125                              3

[Provided that nothing in this subdivision shall  affect  the  exclusion
for  public  utility  services  set  forth  in  subdivision  two of this
section.]
  10.  "Substantially-owned  affiliated  entity"  shall  mean the parent
company of the PUBLIC UTILITY, contractor or subcontractor, any  subsid-
iary  of  the PUBLIC UTILITY, contractor or subcontractor, or any entity
in which the parent of the PUBLIC UTILITY, contractor  or  subcontractor
owns  more than fifty percent of the voting stock, or an entity in which
one or more of the top five shareholders of the PUBLIC UTILITY, contrac-
tor or subcontractor individually or collectively also owns  a  control-
ling  share  of  the voting stock, or an entity which exhibits any other
indicia of control over the PUBLIC UTILITY, contractor or  subcontractor
or  over  which the PUBLIC UTILITY, contractor or subcontractor exhibits
control, regardless of whether or not the controlling party  or  parties
have  any  identifiable  or  documented ownership interest. Such indicia
shall include: power or responsibility over employment decisions, access
to and/or use of the relevant entity's assets  or  equipment,  power  or
responsibility  over contracts of the entity, responsibility for mainte-
nance or submission of certified payroll records, and influence over the
business decisions of the relevant entity.
  15. "PERSON" SHALL MEAN A HUMAN BEING AND SHALL INCLUDE AN "ENTITY" AS
DEFINED IN THIS ARTICLE, INCLUDING, BUT NOT LIMITED TO A  CONTRACTOR  OR
SUBCONTRACTOR.
  S  3.  Subdivisions  1,  3,  4  and 5 of section 231 of the labor law,
subdivisions 1, 3 and 4 as added by chapter 777 of the laws of 1971  and
subdivision 5 as amended by chapter 678 of the laws of 2007, are amended
and a new subdivision 8 is added to read as follows:
  1.  Every contractor shall pay a service employee under a contract for
[building] service work a wage of not less than the prevailing  wage  in
the locality for the craft, trade or occupation of the service employee.
  3.  Each contract for [building] service work shall contain as part of
the specifications thereof a schedule of the wages required to  be  paid
to  the various classes of service employees on such work, and each such
contract shall further contain a provision obligating the contractor  to
pay  each employee on such work not less than the wage specified for his
craft, trade or occupation in such schedule.
  4. The public agency, or appropriate officer or agent  thereof,  whose
responsibility  it  is to prepare or direct the preparation of the plans
and specifications for a contract for  [building]  service  work,  shall
ascertain  from  such  plans  and  specifications the classifications of
employees to be employed on such work and shall  file  a  list  of  such
classifications  with  the  fiscal officer, together with a statement of
the work to be performed. The fiscal officer shall determine the crafts,
trades and occupations required for such work and shall make a  determi-
nation  of  the  wages required to be paid in the locality for each such
craft, trade or occupation. A schedule of such wages shall be annexed to
and form a part of the specifications for the contract prior to the time
of the advertisement for bids on such contract and shall constitute  the
schedule of wages referred to in subdivision three of this section.
  5.  Upon  the  award  of  a  contract for [building] service work by a
public agency other than a city, the  contracting  public  agency  shall
immediately furnish to the commissioner: (a) the name and address of the
contractor  to  whom  the  contract  was  awarded; (b) the date when the
contract was awarded; and (c) the approximate  consideration  stipulated
for in the contract.

S. 125                              4

  8. THE REQUIREMENTS OF THIS SECTION SHALL APPLY TO ANY PERSON OR ENTI-
TY,  OTHER  THAN  A  BUSINESS IMPROVEMENT DISTRICT, THAT ENTERS INTO ANY
LEASE OR  OTHER  AGREEMENT  WITH  A  PUBLIC  AGENCY  THAT  INCLUDES  THE
PROVISION  OF SERVICE WORK BY EMPLOYEES WHO WOULD BE REQUIRED TO BE PAID
SCHEDULED  WAGES  PURSUANT TO THIS SECTION IN THE ABSENCE OF SUCH AGREE-
MENT.  ANY THIRD PARTY PERSON OR ENTITY THAT CONTRACTS FOR OR  OTHERWISE
ARRANGES  FOR  THE  PAYMENT  FOR  OR PERFORMANCE OF SERVICE WORK FOR THE
BENEFIT OF A PUBLIC AGENCY IN THE  PROVISION  OF  BUILDING  OR  PROPERTY
MANAGEMENT  SERVICES  OR SIMILAR SERVICES PURSUANT TO ANY SUCH AGREEMENT
SHALL DO SO AS AN AGENT OF THE PUBLIC AGENCY.   NO PUBLIC  AGENCY  SHALL
ENTER  INTO  ANY  SUCH  AGREEMENT  WITH ANY PERSON OR ENTITY WITHOUT (A)
PREPARATION OF AN AGREEMENT BETWEEN THE  PUBLIC  AGENCY  AND  THE  THIRD
PARTY  PERSON  OR ENTITY THAT CLEARLY DELINEATES THE RESPONSIBILITIES OF
EACH WITH RESPECT TO REPORTING, FILING AND  RETENTION  OF  PAYROLLS  AND
OTHER  DOCUMENTS,  AND ANY OTHER ACTIONS REQUIRED PURSUANT TO THIS ARTI-
CLE, AND (B) RECEIPT BY THE PUBLIC AGENCY OF A  WRITTEN  ACKNOWLEDGEMENT
FROM  SUCH THIRD PARTY PERSON OR ENTITY THAT THE PERSON OR ENTITY AGREES
TO UNDERTAKE THOSE RESPONSIBILITIES AS THE AGENT OF THE  PUBLIC  AGENCY,
AND AFFIRMING SUCH PERSON OR ENTITY'S NONDELEGABLE OBLIGATION TO PAY NOT
LESS  THAN  THE WAGES SPECIFIED IN EACH APPLICABLE SCHEDULE.  SUCH DOCU-
MENTS SHALL BE IN A FORM SATISFACTORY TO THE FISCAL OFFICER AND SHALL BE
SUBSCRIBED AND CONFIRMED AS REQUIRED BY  SUCH  OFFICER.  SUCH  DOCUMENTS
SHALL  BE  RETAINED  AS  PROVIDED IN SECTION TWO HUNDRED THIRTY-THREE OF
THIS ARTICLE, AND A COPY OF EACH SUCH DOCUMENT SHALL  BE  FILED  BY  THE
PUBLIC  AGENCY WITH THE FISCAL OFFICER WITHIN TEN DAYS OF ITS EXECUTION.
NOTWITHSTANDING ANY SUCH AGREEMENT, NOTHING IN THIS SUBDIVISION SHALL BE
DEEMED TO RELIEVE THE PUBLIC AGENCY OF ITS  RESPONSIBILITIES  TO  ENSURE
COMPLIANCE  WITH THIS ARTICLE. ANY LEASE OR AGREEMENT MADE IN CONTRAVEN-
TION OF THIS SUBDIVISION SHALL BE VOID AS A  MATTER  OF  PUBLIC  POLICY.
THE  FISCAL  OFFICER MAY TAKE ALL ACTIONS NECESSARY TO ENSURE COMPLIANCE
WITH THE PROVISIONS OF THIS ARTICLE AGAINST THE PUBLIC AGENCY, ANY THIRD
PARTY ACTING IN PLACE OF, ON BEHALF OF OR FOR THE BENEFIT OF SUCH PUBLIC
AGENCY PURSUANT TO ANY LEASE OR OTHER AGREEMENT BETWEEN SUCH THIRD PARTY
PERSON OR ENTITY AND THE PUBLIC AGENCY, OR BOTH THE  PUBLIC  AGENCY  AND
THIRD PARTY JOINTLY.
  S  4. Paragraphs a and c of subdivision 2 and subdivision 7 of section
235 of the labor law, paragraph a of subdivision 2 and subdivision 7  as
amended  and paragraph c of subdivision 2 as added by chapter 547 of the
laws of 1998, are amended and subdivision 2 is amended by adding  a  new
paragraph g to read as follows:
  a.  At  the  start of such investigation the fiscal officer may notify
the financial officer of the public agency interested who shall, at  the
direction of the fiscal officer, forthwith withhold from any payment due
to  the  contractor executing the contract sufficient money to safeguard
the rights of the service employees and to cover the civil penalty  that
may be assessed as provided herein, or, if there are insufficient moneys
still  due or earned to the contractor or subcontractor to safeguard the
rights of the service employees and to cover the civil penalty that  may
be  assessed  as provided herein, the financial officer of another civil
division which has entered or  subsequently  enters  into  a  [building]
service  work  contract  with the contractor or subcontractor, who shall
withhold from any payment due the contractor or subcontractor  executing
any  [building]  service work, sufficient moneys to safeguard the rights
of the service employees and to cover the  civil  penalty  that  may  be
assessed as provided herein.

S. 125                              5

  c.  The  notice  of  withholding shall provide that the fiscal officer
intends to instruct the  financial  officer,  not  less  than  ten  days
following  service  of the notice by mail, to withhold sufficient moneys
to safeguard the rights of the service employees and to cover the  civil
penalty  that  may  be assessed as provided herein, from any payment due
the notified party under any [building] service  work  contract  pending
final determination. The notice of withholding shall provide that within
thirty days following the date of the notice of withholding the notified
party  may, contest the withholding on the basis that the notified party
is not a partner or one of the five largest shareholders of the  subcon-
tractor or contractor, an officer of the contractor or subcontractor who
knowingly  participated in the violation of this article, a substantial-
ly-owned affiliated entity or successor. If the notified party fails  to
contest  the  notice  of  withholding,  or  if the fiscal officer, after
reviewing the  information  provided  by  the  notified  party  in  such
contest,  determines  that the notified party is a partner or one of the
five largest shareholders, a substantially-owned affiliated  entity,  an
officer of the contractor or subcontractor who knowingly participated in
the  violation  of  this article, or a successor, the fiscal officer may
instruct the financial officer to immediately withhold sufficient moneys
to safeguard the rights of the service employees and to cover the  civil
penalty that may be assessed as provided herein from any payment due the
notified  party  under  any [building] service work contract pending the
final determination.
  G. THE FISCAL OFFICER MAY REQUIRE ANY PERSON OR CORPORATION PERFORMING
SUCH PUBLIC WORK TO FILE WITH THE FISCAL  OFFICER  WITHIN  TEN  DAYS  OF
RECEIPT  OF SAID REQUEST, PAYROLL RECORDS, SWORN TO AS TO THEIR VALIDITY
AND ACCURACY, REQUESTED BY THE FISCAL OFFICER, FOR SAID SERVICE WORK  OR
FOR  ANY  PUBLIC OR PRIVATE WORK PERFORMED BY SAID PERSON OR CORPORATION
DURING THE SAME PERIOD OF TIME AS SAID SERVICE WORK. IN THE  EVENT  SAID
PERSON  OR CORPORATION FAILS TO PROVIDE THE REQUESTED INFORMATION WITHIN
THE ALLOTTED TEN DAYS, THE FISCAL  OFFICER  MAY,  WITHIN  FIFTEEN  DAYS,
ORDER THE FINANCIAL OFFICER OF THE PUBLIC AGENCY TO IMMEDIATELY WITHHOLD
FROM  PAYMENT TO SAID PERSON OR CORPORATION UP TO TWENTY-FIVE PERCENT OF
THE AMOUNT, NOT TO EXCEED FIVE HUNDRED THOUSAND DOLLARS, TO BE  PAID  TO
SAID  PERSON  OR CORPORATION UNDER THE TERMS OF THE CONTRACT PURSUANT TO
WHICH SAID SERVICE WORK IS BEING PERFORMED.  SAID AMOUNT WITHHELD  SHALL
BE  IMMEDIATELY  RELEASED  UPON RECEIPT BY THE PUBLIC AGENCY OF A NOTICE
FROM THE FISCAL OFFICER INDICATING THAT THE REQUEST FOR RECORDS HAD BEEN
SATISFIED.
  7. When, pursuant to the provisions of this section, two final  orders
have been entered against a contractor, subcontractor, successor, or any
substantially-owned  affiliated  entity of the contractor or subcontrac-
tor, any of the partners if the contractor or subcontractor is  a  part-
nership,  any  of  the  five  largest  shareholders of the contractor or
subcontractor, any officer of the contractor or subcontractor who  know-
ingly  participated  in the violation of this article within any consec-
utive six-year period determining that such contractor or  subcontractor
and/or  its  successor,  substantially-owned  affiliated  entity  of the
contractor or subcontractor, any of the partners  or  any  of  the  five
largest  shareholders of the contractor or subcontractor, any officer of
the contractor  or  subcontractor  who  knowingly  participated  in  the
violation  of  this  article  has willfully failed to pay the prevailing
wages in accordance with the provisions of this  article,  whether  such
failures  were  concurrent  or consecutive and whether or not such final
determinations  concerning  separate  public  [building]  service   WORK

S. 125                              6

contracts  are  rendered simultaneously, such contractor, subcontractor,
successor, and if  the  contractor,  subcontractor,  successor,  or  any
substantially-owned  affiliated  entity of the contractor or subcontrac-
tor,  any  of the partners if the contractor or subcontractor is a part-
nership, or any of the five largest shareholders of  the  contractor  or
subcontractor,  any officer of the contractor or subcontractor who know-
ingly participated in the violation of this article, or any successor is
a corporation, any officer of such  corporation  who  knowingly  partic-
ipated  in  such  failure,  shall be ineligible to submit a bid on or be
awarded any public [building] service work for a period  of  five  years
from  the  date  of  the second order, provided, however, that where any
such final order involves the falsification of payroll  records  or  the
kickback  of  wages,  the contractor, subcontractor, successor, substan-
tially-owned affiliated entity of the contractor or  subcontractor,  any
partner  if  the  contractor or subcontractor is a partnership or any of
the five largest shareholders of the contractor  or  subcontractor,  any
officer of the contractor or subcontractor who knowingly participated in
the  violation of this article shall be ineligible to submit a bid on or
be awarded any public [building] service WORK  contract  or  subcontract
with the state, any municipal corporation or public body for a period of
five  years  from  the  date  of  the first final order. Nothing in this
subdivision shall be construed as affecting any provision of  any  other
law or regulation relating to the awarding of public contracts.
  S  5.  Subdivision  2  of  section 237 of the labor law, as amended by
chapter 698 of the laws of 1988, is amended to read as follows:
  2. A. Before payment is made by or on behalf of a public agency of any
sums due on account of a contract for service work, it shall be the duty
of the comptroller of the state or the financial officer of such  public
agency or other officer or person charged with the custody and disburse-
ment  of  the  state or corporate funds applicable to the contract under
and pursuant to which payment is made, to require the contractor to file
a statement in writing in form satisfactory to such  officer  certifying
to  the  amounts  then  due  and  owing from such contractor filing such
statement to or on behalf of any and all service employees for daily  or
weekly  wages  on  account  of  labor  performed upon the work under the
contract, setting forth therein the names of the persons whose wages are
unpaid and the amount due to or on behalf of  each  respectively,  which
statement so to be filed shall be verified by the oath of the contractor
that  he  or  she  has  read such statement subscribed by him or her and
knows the contents thereof, and that the same is true of his or her  own
knowledge.  THE  CONTRACTOR  SHALL  FILE  THESE PAYROLL RECORDS VERIFIED
UNDER OATH WITHIN NINETY DAYS AFTER ANY LABOR IS PERFORMED UPON THE WORK
UNDER CONTRACT, OR SUCH OTHER TIME AS THE FISCAL OFFICER MAY  AUTHORIZE.
ANY  PERSON  WHO  WILLFULLY  FAILS TO FILE SUCH PAYROLL RECORDS WITH THE
PUBLIC AGENCY SHALL BE GUILTY OF A CLASS E FELONY.
  B. EACH  PUBLIC  AGENCY  SHALL  DESIGNATE  IN  WRITING  AN  INDIVIDUAL
EMPLOYED  BY SUCH DEPARTMENT RESPONSIBLE FOR THE RECEIPT, COLLECTION AND
REVIEW FOR FACIAL VALIDITY OF A CONTRACTOR'S  CERTIFIED  PAYROLL  STATE-
MENT,  AS  SET  FORTH  IN THIS SUBDIVISION, BEFORE PAYMENT IS MADE. SAID
DESIGNATION SHALL BE FILED WITH THE  FISCAL  OFFICER  AND  POSTED  IN  A
CONSPICUOUS  LOCATION  AT  THE  WORK  SITE. IF THE DESIGNATED INDIVIDUAL
CANNOT PERFORM THE RECEIPT, COLLECTION AND REVIEW OF  CERTIFIED  PAYROLL
DUTIES  AS INDICATED ABOVE, FOR ANY REASON, INCLUDING BUT NOT LIMITED TO
REASSIGNMENT, PROMOTION OR SEPARATION FROM EMPLOYMENT, THE PUBLIC AGENCY
MUST IMMEDIATELY DESIGNATE ANOTHER INDIVIDUAL EMPLOYED BY SUCH AGENCY TO
FULFILL SUCH RESPONSIBILITIES. IN THE EVENT THAT A PUBLIC  AGENCY  FAILS

S. 125                              7

TO NAME AN INDIVIDUAL RESPONSIBLE FOR THE RECEIPT, COLLECTION AND REVIEW
FOR  FACIAL  VALIDITY OF CONTRACTORS' CERTIFIED PAYROLLS, THEN THE INDI-
VIDUAL  SO  RESPONSIBLE  SHALL  BE  THE  INDIVIDUAL  WHO  IS  THE  CHIEF
POLICY-MAKING OFFICER OF SUCH PUBLIC AGENCY.
  S  6. Subdivision 2 of section 238 of the labor law, as added by chap-
ter 777 of the laws of 1971, is amended to read as follows:
  2. When a contract for service work contains as part thereof a  sched-
ule  of  wages  as provided for in this article, any [contractor] PERSON
who, after entering into such contract[, and any subcontractor  of  such
contractor who] WILLFULLY fails to pay to any service employee the wages
stipulated  in  such  wage schedule [is guilty of a misdemeanor and upon
conviction shall be punished for a first  offense  by  a  fine  of  five
hundred  dollars  or by imprisonment for not more than thirty days or by
both fine and imprisonment; for a second offense by a fine of one  thou-
sand  dollars,  and  in]  SHALL BE GUILTY OF A MISDEMEANOR FOR THE FIRST
OFFENSE AND UPON CONVICTION THEREFOR SHALL BE FINED  TWO  THOUSAND  FIVE
HUNDRED DOLLARS OR TWICE THE AMOUNT OF UNDERPAYMENT, WHICHEVER IS GREAT-
ER OR IMPRISONED FOR NOT MORE THAN ONE YEAR, OR BOTH. IF A PERSON STANDS
CONVICTED  OF  A  VIOLATION  OF THIS SECTION AND WITHIN THE PREVIOUS SIX
YEARS HAS BEEN CONVICTED ONE OR  MORE  TIMES  OF  A  VIOLATION  OF  THIS
SECTION  IN SEPARATE TRANSACTIONS, THEN SUCH PERSON SHALL BE GUILTY OF A
CLASS E FELONY UPON CONVICTION FOR SUCH SUBSEQUENT OFFENSE, AND SHALL BE
FINED FIVE THOUSAND DOLLARS OR TRIPLE THE AMOUNT OF UNDERPAYMENT, WHICH-
EVER IS GREATER OR IMPRISONED AS AUTHORIZED  BY  SECTION  70.00  OF  THE
PENAL  LAW OR PUNISHED BY BOTH SUCH FINE AND IMPRISONMENT, FOR EACH SUCH
OFFENSE. IN addition [thereto] TO ANY OTHER FINE OR PENALTY THAT MAY  BE
IMPOSED FOR SUCH FELONY OFFENSE, the contract on which the violation has
occurred shall be forfeited; and no such contractor shall be entitled to
receive  any  sum,  nor  shall  any  officer,  agent  or employee of the
contracting public agency pay any such sum or authorize its payment from
the funds under his OR HER charge or control to such contractor for work
done upon the contract on which the contractor has been convicted  of  a
second offense. If the contractor or subcontractor is a corporation, any
officer  of  such  corporation  who knowingly permits the corporation to
fail to make such payment shall also be guilty of  [a  misdemeanor]  THE
OFFENSE DEFINED IN THIS SUBDIVISION and the criminal and civil penalties
[herein]   OF  THIS  SUBDIVISION  shall  attach  to  such  officer  upon
conviction.
  S 7. Severability. If any clause, sentence, paragraph, section or part
of this act be adjudged by any court of  competent  jurisdiction  to  be
invalid  and  after exhaustion of all further judicial review, the judg-
ment shall not affect, impair or invalidate the remainder  thereof,  but
shall  be  confined in its operation to the clause, sentence, paragraph,
section or part of this act directly  involved  in  the  controversy  in
which the judgment shall have been rendered.
  S  8.  This  act shall take effect on the ninetieth day after it shall
have become a law, and shall apply to all contracts or other  agreements
entered into, renewed, or extended on or after such date.

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