State law scheduled to take effect June 18
By ALEX ETCHEN
AGC of America and AGCNYS have filed suit against New York state, challenging a law that requires the payment of New York state prevailing wage rates for fabrication work done in another state.
AGC of America and AGC of New York State – and other business and industry groups – filed a lawsuit in federal court over a recently passed New York state law. The law would require payment of New York prevailing wage rates for custom fabrication of materials and components used in public works projects in the state, even when that fabrication occurs offsite and, in some cases, outside New York.
The law is scheduled to take effect on June 18, and contractors would bear the burden of compliance.
This case is about more than a wage-and-hour issue. The challenge raises a fundamental question: Can a state impose its own prevailing wage regime on manufacturing activity occurring outside the construction site (and potentially outside the state entirely), simply because the finished product will be used on a public project within its borders?
AGC is arguing that such a law is unconstitutional. Because the Commerce Clause of the Constitution gives the Federal government exclusive power to regulate commerce between the states, it is unconstitutional for a state to impose new laws that would regulate conduct beyond its borders and disadvantage out-of-state firms.
AGC’s involvement in this case was made possible by the Construction Advocacy Fund. The Construction Advocacy Fund enables AGC to fight in courts nationwide to protect the industry from regulatory overreach.
