A Significant Expansion of Prevailing Wage Coverage

New York’s prevailing wage law has historically focused on labor performed at the public work jobsite. That paradigm changes on June 18, 2026, when amendments to Labor Law § 220 take effect, extending prevailing wage requirements to certain off-site custom fabrication performed in connection with public works projects, even when that fabrication occurs outside the project site or outside New York altogether.

For contractors, subcontractors, and fabricators that have long relied on off-site manufacturing to manage labor costs, scheduling, and staffing, the amendment represents a fundamental shift in risk allocation and project pricing. While the legislation attempts to resolve long-debated questions about off-site fabrication, it also leaves important issues unsettled, particularly as to scope, administration, and enforcement.

The Prevailing Wage Law Prior to the Amendment 

Before the amendment, Labor Law § 220(3) required contractors on public works projects to pay laborers, workers, and mechanics not less than the prevailing rate of wages for work performed “upon [a] public work.” Courts and the Department of Labor generally understood that phrase to mean work performed on the jobsite, unless off-site work was moved there as a device to evade prevailing wage obligations.

Under that framework, the prevailing rate of wages was tied to union wage and benefit rates in the county where the work was physically performed. As a result, off-site fabrication, particularly in shops or factories, often fell outside prevailing wage requirements, creating both economic incentives and recurring disputes in modern construction projects that increasingly depend on prefabricated components.

The New Rule: Custom Fabrication Is Included

The amendment adds new Labor Law § 220(3)(f)(i), which provides that, “[f]or the purposes of this subdivision,” a legal day’s work subject to prevailing wages “shall include custom fabrication regardless of whether the custom fabrication occurs on-site, off-site, or in another jurisdiction.” 

Importantly, the applicable prevailing wage is not determined by where the fabrication occurs. Instead, the statute mandates payment of the prevailing rate for the New York county in which the public works project is located. Wage rates contained in collective bargaining agreements governing the location of the fabrication are irrelevant. Overtime and fringe benefits likewise track the project county’s prevailing wage schedule. In effect, the Legislature has shifted the analytical focus from where the work is performed to why it is being performed.

By eliminating the traditional distinction between on-site labor and off-site fabrication, the amendment significantly broadens the reach of prevailing wage enforcement and alters cost assumptions that have long shaped bidding and procurement strategies on public work.

What Constitutes “Custom Fabrication”?

For purposes of § 220(3), the statute defines “custom fabrication” to include the fabrication of: (1) exterior or interior wall panel systems; (2) woodwork; (3) electrical, plumbing, heating, cooling, ventilation, or exhaust duct systems; (4) rebar cages; and (5) mechanical insulation solely and specifically designed and engineered for a specified public work project.

An earlier version of the amendment defined “custom fabrication” to include enumerated items “but not limited to” those categories. The removal of the phrase “but not limited to” reflects a legislative intent that the statutory list be exhaustive, not illustrative. 

The statute also identifies express exclusions. “Custom fabrication” does not include: (1) components, portions, modules, or materials stocked or readily available absent a specified public work project; or (2) any highway, structure, vehicle, or watercraft used to support transporting persons.

However, even within the transportation exclusion, the statute specifies that electrical, plumbing, heating, cooling, ventilation, or mechanical insulation work in rest areas, transit stations, or depots remains covered. 

Conclusion

For attorneys litigating or counseling in this space, disputes are likely to hinge on whether particular fabrication activities fall within, or just outside, the enumerated categories, and whether a given item was truly “custom” as opposed to stock or modular.

That question will be particularly salient in disputes involving hybrid fabrication models, multi-use components, or fabrication performed for multiple projects. The amendment’s “for purposes of this subdivision” limitation further suggests that courts may be asked to reconcile this expanded definition of public work with existing doctrines developed in other prevailing wage contexts.

Whether the statute ultimately narrows or expands through enforcement and judicial interpretation remains to be seen. As June 18, 2026 approaches, proactive planning will be essential to managing the legal and financial consequences of this New York’s expansion of prevailing wage law coverage from the jobsite to the shop floor.

Denice Cioara

Denice Cioara is an associate with Adams Leclair LLP.  She can be reached at dcioara@admasleclair.law