COMPLIANCE CORNER - MAY 2026

The New Prevailing Wage Requirements for Custom Off-Site Fabrication May Increase Your Project Labor Costs Significantly and Create Compliance Nightmares

Unless enforcement of the newly added provision is enjoined, effective June 18, 2026[footnoteRef:1] for newly bid work, New York State Labor Law Section 220(3)(f), will fundamentally expand the scope of "public work" to include off-site custom fabrication. This is a sea change to the Labor Law as past enforcement was always limited to the “site of the public work.” Labor Law Section 220(3)(f)(i) mandates that custom fabrication be treated as public work, requiring the payment of prevailing wages regardless of whether the work is performed on-site, off-site, or in another jurisdiction. This expansion was enacted through Senate Bill S.2536-A and Assembly Bill A.2747-A, with clarifying amendments later added via S.8833/A.9464. Contractors and subcontractors employing custom fabrication workers are required to abide by the law. . As such, the minimum steps should be taken: (1) identify any items that could be considered “custom fabrication,” (2) ensure all entities performing the custom fabrication register with the NYS DOL (Labor Law Section 220-i, (3) before fabrication begins report your intent to use custom off-site fabrication to the Department of Jurisdiction (agency), (4) ensure the project prevailing wages are being paid to the workers fabricating the item, even if out of state, (5) collect and electronically file certified payroll reports, at least every 30 days (Labor Law Section 220-j) and (6) make sure workers have at least the required 10 hour OSHA (Labor Law 220-h). Remember that certifications you sign swear to the accuracy of the information being reported. [1: This date may be as early as June 14, 2026 as there is now some confusion.]

Under this addition to the Labor Law, "custom fabrication" is defined as work solely and specifically designed and engineered for a particular public work project. This does not include "off-the-shelf" materials or items that are stocked and readily available. The following components are explicitly identified in Labor Law Section 220(3)(f)(iii) as covered custom fabrication:

• Wall Panel Systems: Both exterior and interior systems.
• Woodwork
• Electrical
• Mechanical
• Plumbing
• Mechanical Systems: HVAC, ventilation or exhaust duct systems.
• Rebar cages
• Mechanical Insulation

The new law also requires the contractors to be responsible for and monitor compliance to several new administrative burdens to maintain eligibility for public works, including:

• Prevailing Wage Rates: Workers must be paid the prevailing wage and supplemental benefits for the county where the project is situated, even if the fabrication shop is located in another state or country.
• Mandatory Registration: Off-site fabricators must register as public works contractors with the New York State Department of Labor.
• Certified Payrolls: Contractors must maintain and electronically submit certified payroll records for all covered off-site workers at least every 30 days.
• Reporting Obligations: Departments of jurisdiction must report planned custom off-site fabrication to the fiscal officer.
• Notification of Labor Law Requirements: Contractors and subcontractors are required to notify entities that they contract with for custom fabrication work that the requirements of this section are applicable.

Pre-Award & Bidding Best Practices

• Registration Verification
• Supply Chain Audits
• Budgeting for Premiums

Contracting & Vendor Management

• Standardize Contract Clauses
• "Intent to Use" Documentation
• Notification of Vendors

Payroll & Record-Keeping Systems

• Centralized Electronic Filing
• Flag Off-Site Workers
• Retention Policy
• OSHA 10 Compliance

Internal Compliance Oversight

• Designate a Compliance Officer
• Fringe Benefit Allocation