By: Thomas S. Tripodianos Published: November 2012

Prevailing Wage and New York Labor Law Section 220

Question. Is an employee who worked on a mix of private and public projects, but cannot identify the specific "public works" contracts he worked on entitled to be paid the prevailing wage for time spent on "public works" projects?

Answer. NO. Because there was no evidence Employer agreed to pay its workers a prevailing wage, Employee could not maintain a contract breach action. Thus, he was limited to statutory enforcement mechanisms under §220 or other laws.

Employee alleges he is entitled to be paid the prevailing wage for time he spent working on "public works" projects pursuant to contracts that Employer allegedly made with various public entities. Employee maintains that he was an intended third-party beneficiary of those contracts, which under New York Labor Law Section 220 ("Section 220") would have been required to contain a provision guaranteeing that each laborer on the project was paid a prevailing wage. Section 220 provides in relevant part:

The wages to be paid for a legal day's work, as hereinbefore defined, to laborers, workmen or mechanics upon such public works, shall be not less than the prevailing rate of wages as hereinafter defined.... Such contracts shall contain a provision that each laborer, workman or mechanic, employed by such contractor, subcontractor or other person about or upon such public work, shall be paid the wages herein provided.

N.Y. LABOR L. §220(3)(a) (emphasis added). Among other things, Section 220 gives employees a statutory mechanism with which to initiate an administrative enforcement proceeding.

Employee is suing to enforce Employer's alleged public works contracts on a third-party beneficiary theory. In New York, a party asserting rights as a third-party beneficiary must establish (1) the existence of a valid and binding contract between other parties, (2) that the contract was intended for his benefit and (3) that the benefit to him is sufficiently immediate, rather than incidental, to indicate the assumption by the contracting parties of a duty to compensate him if the benefit is lost. And, New York law is clear that laborers may ordinarily assert third-party beneficiary claims to enforce the "prevailing wage" provision that Section 220 requires of public works contracts. But because there is no evidence that Employer contracted to pay its laborers a prevailing wage, the issue is whether Employee can maintain a breach of contract case even though he cannot point to a contract with a prevailing wage clause. Employee cannot.

New York courts have indicated that a breach of contract claim depends on the actual insertion of Section 220's prevailing wage language into the contract. In short, although Section 220 sets out what Employer was supposed to promise in its public works contracts, Employee needs to prove what Employer actually promised before he can prevail in a breach of contract case.

Because there is no evidence that Employer actually agreed to pay its workers a prevailing wage, Employee cannot maintain a breach of contract action. Employee is limited to the statutory enforcement mechanisms under Section 220 or other laws.

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