In an effort to strengthen compliance with labor standards and ensure fair practices in the construction industry, New York State is introducing a new contractor registration system. Beginning December 30, 2024, contractors and subcontractors involved in public works or certain privately funded projects must register with the New York State Department of Labor (NYSDOL) before they can bid on or perform work. This initiative, under Labor Law Section 220-i, emphasizes consumer protection, workplace safety, and compliance with prevailing wage requirements.
Who Does the New Law Apply To?
The law targets two primary groups:
- Contractors: Any business or entity entering contracts for construction, demolition, renovation, or similar projects.
- Subcontractors: Entities hired by contractors to perform specialized or related work.
These requirements apply to companies working on:
- Public projects: Includes government-funded construction and renovation projects.
- Private projects covered by Article 8 of the Labor Law: A private contract is covered under the requirements if public funds are paying more than 30% of total costs and the project costs more than $5 million.
- Other covered private projects include renewable energy initiatives, broadband expansions, and climate resilience and infrastructure work.
If a project owner is unsure if their project is a covered project, the owner can apply to the Public Subsidy Board for determination.
Key Registration Requirements
The registration process mandates submission of detailed information, including:
- Business details: Name, address, contact information, and ownership details.
- Compliance history: Records of debarments or violations related to labor, safety, or employment tax laws over the past 10 years.
- Insurance proof: Documentation of workers’ compensation coverage.
- Fee: A $200 non-refundable fee, with discounts for minority- or women-owned businesses.
- Subcontractor affirmation: Contractors must affirm that subcontractors working under them meet the registration standards.
Upon approval, the NYSDOL will issue a Certificate of Registration valid for two years. This certificate is essential for bidding on and commencing work on covered projects.
The NYSDOL has provided this list of information required to register.
Consequences of Non-Compliance
Contractors failing to comply face significant penalties:
- Civil Fines: Up to $1,000 per infraction.
- Project Interruptions: Unregistered contractors or subcontractors may face work stoppages.
- Revoked Registration: NYSDOL may suspend or revoke a contractor’s registration for violations of labor or prevailing wage laws.
Additionally, developers and project owners are held accountable if they knowingly engage unregistered contractors.
Steps to Register
Follow these steps to meet the new requirements:
- Visit the NYSDOL Website: Access the registration portal at NYSDOL Public Work Registry
- Prepare Documentation: Gather business details, compliance records, and proof of insurance.
- Submit the Application: Complete the online form and pay the registration fee.
- Verify Subcontractors: Ensure all subcontractors on covered projects are registered.
To avoid delays, the NYSDOL recommends early registration. It may take up to 3-4 weeks to review an application and issue a certificate. The NYSDOL has also provided a list of frequently asked questions to assist contractors and subcontractors with the registry and registration process.
Looking Ahead
Contractors are urged to act promptly to register and prepare for the upcoming changes, avoiding penalties and positioning themselves for future opportunities.
If you need further guidance or have any questions on this topic, we are here to help. Please do not hesitate to reach out to discuss your specific situation. Be sure to check out the Public Work Contractor and Subcontractor Registry homepage for more information as well.
This material has been prepared for general, informational purposes only and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. Should you require any such advice, please contact us directly. The information contained herein does not create, and your review or use of the information does not constitute, an accountant-client relationship.
