Beginning Dec. 30, 2024, all contractors and subcontractors submitting bids or performing construction work on public projects, or certain covered private projects, will be required to register with the New York State Department of Labor (“NYSDOL”) before submitting any bids or beginning the work. The New York State Legislature stipulated the new law, contained within Section 220-i of the New York Labor Law, is designed to ensure contractors and subcontractors “do not have previous labor law violations and will abide by the New York Labor Laws and Regulations, including prevailing wage requirements.”
Who Must Register: Contractor and Subcontractor Defined
The law provides that all contractors or subcontractors submitting bids or beginning any work on a covered project must register with the NYSDOL. Section 220-i(a) defines a contractor as “any entity entering into a contract to perform construction, demolition, reconstruction, excavation, rehabilitation, repair, installation, renovation, alteration, or custom fabrication.” Furthermore, Section 220-i(b) defines a subcontractor as any entity subcontracting with a contractor to perform any of the tasks mentioned in the definition of a contractor.
Covered Projects
Section 220-i only applies when a contractor or subcontractor seeks to bid on or commence work on a “covered project.” Covered projects under the law include any “public work projects” and specific private projects subject to the provisions of Article 8 of the New York Labor Law. These private projects involve public subsidy-funded projects, renewable energy systems projects, broadband projects, climate risk-related and energy transition projects and roadway projects.
Registration Requirements
To satisfy the registration requirements mandated under Section 220-i, a contractor or subcontractor must submit their application materials to the NYSDOL’s Contractor Registry Portal, located on the department’s website, along with a $200 non-refundable application fee. The law provides that minority or women-owned businesses will pay a reduced fee “in order to promote the use of such businesses on covered projects.” Additionally, Section 220-i outlines the minimum required information that a registering contractor or subcontractor must provide within their application to be considered for a certificate of registration. This information includes:
1) The contractor or subcontractor’s name, primary business address, and telephone number.
2) Whether the contractor is a person, partnership, association, joint stock company, trust, corporation or other business entity.
3) The name and address of each person with an ownership interest in the contractor or subcontractor and each owner’s respective percentage interest, except that if the contractor or subcontractor is a publicly traded corporation, the contractor or subcontractor shall supply the names and addresses of the corporation’s officers.
4) The contractor’s or subcontractor’s tax identification number, unemployment insurance registration number and workers’ compensation board employer number.
5) Whether the contractor or subcontractor has outstanding wage assessments against it.
6) Whether the contractor or subcontractor has been debarred under New York or federal law within the past eight years.
7) Whether the contractor or subcontractor has been debarred under the laws of any other state within the past eight years.
8) Whether the contractor or subcontractor has been finally determined to have violated any labor laws or employment tax laws, including, but not limited to, the requirement to have workers’ compensation coverage, payment of workers' compensation premiums, deduction and payment of income taxes, payment of unemployment insurance contributions or payment of prevailing wage.
9) Whether the contractor or subcontractor has been finally determined to have violated any laws establishing workplace safety standards, including the federal Occupational Safety and Health Act.
10) Whether or not the contractor or subcontractor is associated with, or a signatory to, an apprenticeship program. If so, the contractor or subcontractor shall provide the apprenticeship program.
11) Whether or not the contractor or subcontractor is a minority or women-owned business.
12) Documentation must be provided to the NYSDOL demonstrating the contractor or subcontractor has workers’ compensation insurance coverage for all workers as required by law.
After Registering with the NYSDOL
“Unless the commissioner determines a contractor or subcontractor unfit to be registered, the commissioner shall issue a certificate of registration to the contractor or subcontractor upon receipt of the fee, form and documentation” required by Section 220-i. The NYSDOL provided on its website that once a contractor or subcontractor completes their registration, it may take “several weeks” for the NYSDOL to review their application and issue a certificate. Once issued, the certificate is valid for “two (2) calendar years from the date of registration.” Upon the expiration of the certificate, Section 220-i requires contractors and subcontractors renew “not less than ninety (90) days before the date of expiration.”
Penalties for Failing to Register
Section 220-i(8) outlines the penalties for failing to register with the NYSDOL when a contractor or subcontractor is required to do so under the law. Section 220-i(8) provides that “a contractor bidding on a contract for public work [or starts work on a covered project] knowing it is not registered, or allows a subcontractor to commence work on a covered project that it knows or should have known is not registered,” is subject to a fine of up to $1,000. A subcontractor who engages in work on a covered project and knows they are not registered is subject to the same penalty. Section 220-i(8) penalties also extend to owners and developers who hire contractors or subcontractors to engage in private work deemed a covered project. Where an owner or developer hires a contractor or subcontractor to work on a covered project and knows, or should have known, that the agent contractor or subcontractor is not registered, they are subject to a fine of up to $1,000.
Contractors, subcontractors, developers, and property owners should be aware of this new law and prepare for compliance with Section 220-i, which goes into effect on Dec. 30, 2024.
