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HPD issues proposed rules on Affordable New York Housing Program – guidelines for building service worker and construction worker wages
By Erica F. Buckley and Aaron Yowell
This is the second of three installments on the proposed rules and application for the Affordable New York Housing Program (aka 421-a) as released by the NYC Department of Housing Preservation and Development (HPD).
Part II – Rules on Comptroller’s Oversight of Wage Mandates for Building Service and Construction Workers
The second set of rules released by HPD provides details on the oversight and compliance of the expanded prevailing wage requirements and the new construction wage mandates of the Affordable New York Housing Program, with emphasis on the mandatory reporting requirements to the Comptroller for construction workers of certain large-scale projects of 300 or more units in certain areas of Manhattan, Queens and Brooklyn.
Prevailing Wage Mandates
First, the new rules drive home that the Affordable Housing New York program broadened significantly the prevailing wage mandate for building service workers.  Under the prior 421-a program, buildings with 50 or more units were subject to prevailing wages, unless at least 50% of the units were set aside for households at or below 125% of the AMI.   Now, projects with more than 30 units are subject, and an exemption is only available if all of the units are set aside as affordable for households at or below 125% of the AMI.  The result is that any mixed-income project with more than 30 units is subject to the prevailing wage requirements.  The proposed rule simply adds this exception to the existing prevailing wage rules which permit an owner to apply to the Comptroller for a determination that prevailing wages need not be paid so presumably the existing process for exemptions will continue.
Construction Worker Wages Pursuant to the Minimum Average Hourly Wage Act
The rules also make clear that the Comptroller is charged with enforcement of the construction wage mandates, (i.e., the “Minimum Average Hourly Wage Act”), and will provide mandatory forms that must be filed by owners of eligible multiple dwellings.  The forms seem likely to be logs that must be kept on-site and completed daily by contractors and sub-contractors.
Finally, the rules provide guidance on how the Comptroller may approve a plan by a third party administrator to pay out claims to construction workers who were not paid the appropriate wage under the Minimum Average Hourly Wage Act; empower the Comptroller to investigate whether a certified payroll report is inaccurate; and require that any contractor or sub-contractor who submits a false report be required to make a payment equal to the amount of the underpayment, with interest added thereon at a rate permitted by the New York Banking Law.  It is unclear from the rules where this money would be paid to.  The law expressly provides that HPD may not condition eligibility for benefits upon proof of wage compliance nor rescind benefits because of a failure to comply and nothing in the proposed rules affects this limitation.
In short, the rules make clear that the Affordable New York Housing Program will expand the number of mixed market rate and affordable projects that must pay prevailing wages to building service workers and clarifies the role the Comptroller will play in enforcement of all wage requirements under the law.


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