A new law, signed by Governor Hochul on September 4, 2024, and effective immediately, will require all contractors and subcontractors working on public work projects, as well as on privately owned projects requiring the use of prevailing wages, to electronically submit their certified payroll reports, and payment bond, to the government “fiscal officer” for uploading to a public online database. 

The purpose of this amendment, creating section 220-j of the NY Labor Law, is to “provide a more streamlined system for the Department of Labor to collect and maintain certified payrolls already required by the law.” It is further believed that this new requirement will “ensure contractors maintain these records” and “increase efficiency for DOL enforcement activities and resulting collections.”

The Labor Law had earlier been amended in 2022, in section 220-i, to require all public work contractors to register, as of the end of 2024, with the Department of Labor and pay a registration fee in order to bid on public work in New York. This new requirement to upload certified payroll reports is being viewed by the legislature as going hand in hand with that registration requirement.

Failure to comply with the law can result in a penalty of one hundred dollars for each day the contractor or subcontractor is in violation of the new law, after a 14-day grace period. Unlike certain other Labor Law requirements, there is no vicarious liability imposed upon the contractor for a failure by the subcontractor; the penalties accrue only to the entity which fails to provide the payroll records.

The certified payrolls are to be submitted monthly, unless the contract requires more frequent reporting. The fiscal officer will redact the payrolls to shield personally identifiable information.

The new law contemplates the fiscal officers (the NY State and NY City Comptrollers) developing and implementing an online database “no later than December 31, 2024” so there may be some delay before the first payroll reports go online.

Previously, payment bonds had to be filed with, and were theoretically available from, the public owner.  This did not always prove to be the case. The furnishing of payment bonds now to two centralized repositories (the local municipality and also the State Comptroller), will be of interest to lower tier contractors and vendors who often struggle to obtain a copy of those bonds in order to bring claims against the surety. 

With certified payroll records soon to be available to the public, one can expect class action attorneys and other interested parties to join the DOL in being on the lookout for violations.