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Prevailing Wages Not Required for Charter School Construction

NY Charter School Assoc. v. Commissioner of Labor
2010 WL 4065431 (Oct 19 2010, NY Court of Appeals)

New York’s highest court has just affirmed an appellate court ruling that Charter Schools, and therefore their contractors, are not required to pay prevailing wages under Labor Law Sec. 220 for “all construction, renovation, repair and maintenance” of charter school buildings.

As noted in the decision: “This litigation was sparked by an opinion letter dated August 31, 2007, wherein the NY Dept of Labor declared that the prevailing wage law mandate of Labor Law Sec 220 applied to all charter school projects….This determination was in stark contrast to the position taken by the DOL in the previous seven years.”

The NY Charter School Assoc and three charter schools filed suit seeking a judgment that the Commissioner’s new position was in excess of her jurisdiction.

Under Erie County IDA v Roberts two conditions must be met for the prevailing wage law to apply: “(1) the public agency must be a party to a contract involving the employment of laborers, workmen, or mechanics, and (2) the contract must concern a public works project.”

The Court held that construction, renovation, repair and maintenance projects undertaken by charter schools do not meet the first condition or contract requirement in Erie. Thus the Commissioner was enjoined from imposing prevailing wage laws on them.

However, charter schools do not get a blanket exemption from prevailing wages. The court noted that “there may be contracts where a charter school acting in place of,or on behalf of a public entity, where prevailing wage law may apply.” For example in Pyramid v. DOL, where a private developer acting on behalf of the DOT permit built a road on State land.

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