Annualization

Annualization reform would allow contractors to provide, and employees to receive, benefits, without penalty

Overview

​Currently, the New York State Department of Labor calculations annualize both private and public benefits by the same method, resulting in excessive costs to contractors already providing benefits to their workers. Because of these calculations, many contractors are eliminating traditional benefit packages and, instead, are offering the benefits as a cash supplement in the employee’s paycheck.

This growing practice eliminates the double payment as previously offered benefits by contractors, but exposes the employee to higher taxes and the employer to more payments in payroll taxes and other burdens; all without the employee receiving important benefits. Annualization reform would again allow contractors to provide, and employees to receive, benefits, without penalty.

ABC SUPPORTS

  • S5695 and A2539 –This legislation would change the manner in which workers’ supplemental benefits are calculated to use the annualization methodology pursuant to the federal Davis-Bacon Act and provide that any person debarred from federal contracts due to violations of the wage requirements in the Act would similarly be debarred from being awarded New York state and local contracts. 

ABC OPPOSES

  • S3995/A5414 – This bill would provide that any person debarred from federal contracts due to violations of the wage requirements in the federal Davis-Bacon Act would similarly be debarred from being awarded New York state and local contracts. The legislation fails to recognize the inconsistency between federal Davis-Bacon Act work and New York State public jobs. S5695 and A2539 addresses those concerns and provides for a more fair approach to debarment reciprocity.

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