On January 9, 2017, New York Governor Andrew Cuomo issued Executive Order No. 162 (EO or Order) aimed at "Ensuring Pay Equity by State Contractors." It received limited press coverage, coming as it did amid a burst of press releases and policy proposals announced by the Governor during the statewide "State of the State" speaking tour he undertook this year in place of the traditional address to the state Senate and Assembly in Albany at the start of the legislative session.
The provisions of the Order will have significant implications for the vast array of industries that contract with New York State, and it appears that many of these industries have only just become aware of the EO's requirements or that its effective date of June 1, 2017, is fast approaching. Below, we summarize the EO's requirements. It is important to note, however, that even at this late stage, it appears that the Cuomo administration does not have a complete plan in place with respect to the requirements and implementation of the Order, and may be just beginning to work through certain issues relating to it. According to a report in POLITICO New York, Alphonso David, Counsel to the Governor, has stated that agencies will be receiving guidelines from the Governor's office by the Order's effective date of June 1, 2017. But David also told POLITICO that the guidelines will be "a work in progress" and that the administration is endeavoring to ensure that they not be "overly burdensome."
The EO clearly notes that its intent is to remedy pay disparity on the basis of race, creed, color, national origin, sex, age, disability or marital status. The Order cites Article 15-A of the Executive Law, which requires government contractors to report on the composition of the workforce used in the performance of state contracts. The Order notes that this required data does not specifically include salary information for contracted employees and that, as a result, cannot be used to identify inequities in salary payments.
Accordingly, the Order adds the requirement that state agencies and authorities include a provision in all state contracts, agreements and procurements issued and executed on or after June 1, 2017, requiring contractors to provide detailed workforce utilization reports. These reports must include:
- The job title and salary of each employee performing work on the contract, or
- If the contractor cannot identify the individuals working directly on the contract, the job titles and salaries of every employee in the contractor's overall workforce.
The EO also requires state agencies and authorities to include a provision in all state contracts, agreements and procurements issued and executed on or after June 1, 2017, imposing the same requirement on all subcontractors with respect to their employees.
The EO further requires that all holders of prime contracts valued at more than $25,000 report such information to state agencies and authorities on a quarterly basis, and that holders of prime construction contracts valued at more than $100,000 report the information on a monthly basis.
Finally, the Executive Order states that the required information must be reported in the form and manner prescribed by the New York State Department of Economic Development, and that such form and manner will be communicated to all agencies and authorities by June 1, 2017.
The Dentons team will be staying in close contact with all stakeholders and providing updates moving forward.
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