Do New York charter school construction, renovation, and repair projects have to pay prevailing wages under Labor Law § 220?

Plain-English summary

The State Comptroller asked the Attorney General whether prevailing wages and supplements had to be paid to workers on charter school construction, renovation, and repair projects. Attorney General Eliot Spitzer concluded that, as a general rule, they did. New York's Constitution (Art. I, § 17) requires prevailing wages for workers on "any public work," and Labor Law § 220 implements that mandate. A project is subject to the prevailing wage requirement if it satisfies a two-part test: a public entity must be party to a contract involving the employment of laborers, and the project must be a public work.

Charter schools satisfy both prongs in most circumstances. The charter itself is a contract entered into with a public entity (the Board of Regents and the charter entity). After the school is incorporated, the charter school is itself an "independent and autonomous public school," so its construction contracts also satisfy the contract prong. The public-work prong is satisfied because a charter school provides publicly-funded compulsory public education, performing an essential public purpose, even when housed on private property. The Education Law also exempts charter school property from real estate taxes and assessments, reinforcing the public-benefit conclusion.

Spitzer flagged a narrow exception. If a private developer who has no operational connection to the charter school builds and owns a building, funds the project entirely with private money, and leases the space to the school for a term substantially shorter than the building's useful life, the project may look more like a private commercial real estate investment than a public work. Even then, the fiscal officer (the Commissioner of Labor outside New York City; the NYC Comptroller in the city) has to look at the specific facts. Education Law § 2854(1)(b)'s general carveout of charter schools from "state and local laws governing public or private schools" does not displace prevailing wage requirements, which are anchored in the State Constitution rather than the kind of "schools" laws § 2854 targets.

Currency note

This opinion was issued in 2000. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Q: Why is the charter itself the "contract" for prevailing wage purposes?
A: Charter applicants must describe the facilities to be used for the school (Education Law § 2851(2)(j)). Once approved, that description becomes a term of the charter, which is entered into with a public entity (the Board of Regents and the charter entity, which can be a school board, the Board of Trustees of SUNY, or the Regents). If the facility will be built or renovated, the charter itself is a public contract involving the employment of construction workers.

Q: What if the charter school doesn't sign the construction contract directly?
A: Direct privity is not required. Labor Law § 220 has been construed to reach lease agreements, financing contracts, and even subcontractor warranty agreements that flow from a public entity's contract. Any contract entered into by a public entity that contemplates construction work counts.

Q: Does the public-work prong require public ownership of the property?
A: No. Charter schools may own, lease, or rent their buildings, and may operate on a private work site (Education Law § 2853(3)). The public-work test focuses on whether the primary objective is to benefit the public, not on who holds title. Because charter schools provide public education and the buildings are designed for that purpose, the public-work test is generally met.

Q: When might prevailing wages NOT apply to a charter school project?
A: When the project looks substantially like a private commercial development. The opinion described one such scenario: an unrelated private developer builds and owns the building, funds it entirely with private money, and leases the space to the charter school for a term substantially shorter than the building's useful life. In that case the school is just one tenant among many a developer could attract, and the public benefit is incidental. Each such case is fact-specific and is decided by the fiscal officer.

Q: Doesn't Education Law § 2854(1)(b) exempt charter schools from state and local laws?
A: Footnote 1 of the opinion addresses this. § 2854(1)(b) carves charter schools out from laws governing "public or private schools, Boards of Education or school districts," not from generally applicable laws like minimum wage, criminal law, or zoning. Labor Law § 220's prevailing wage requirement is grounded in N.Y. Const. Art. I, § 17, which applies to all public works. Any general exemption in the charter school statute cannot override the constitutional mandate.

Q: Who enforces prevailing wage compliance?
A: Outside New York City, the Commissioner of Labor is the fiscal officer responsible for prevailing wage determinations and compliance investigations. Inside New York City, that role belongs to the City Comptroller. The fiscal officer can compel back-pay remediation, impose civil penalties, and, on a willful violation, recommend debarment from public work projects (Labor Law § 220-b(3)(b)).

Background and statutory framework

The prevailing wage requirement traces to the New York Constitution. Art. I, § 17 declares that laborers, workers, and mechanics "engaged in any public work" cannot be paid less than the prevailing rate of wages in the same trade or occupation in the locality. Labor Law § 220 implements that constitutional mandate, defining the practical compliance machinery (schedule determinations, compliance investigations, penalties, debarment).

Charter schools are creatures of the Education Law's Article 56 (added in 1998). They are independent public schools chartered by the Board of Regents under § 2853, designed to operate with greater autonomy from school district control while still serving the essential public purpose of providing compulsory public education. The Charter Schools Stimulus Fund (State Finance Law § 97-sss) provides state grants and loans for start-up costs and for acquisition, renovation, or construction of charter school facilities. Tax exemptions for charter school property (Education Law § 2853(1)(d)) confirm that even privately-owned charter school facilities serve a public function.

Courts have repeatedly construed Labor Law § 220 liberally because of its constitutional foundation. Brian Hoxie's Painting Co., Inc. v Cato-Meridian Cent. School Dist., 76 N.Y.2d 207 (1990), held the prevailing wage law applies to all school district contracting. Matter of Erie County IDA v Roberts and the 60 Market St. case extended the contract prong to lease and financing arrangements. The narrow private-commercial exception in 60 Market St. (Dutchess County leasing office space) and Vulcan Affordable Housing Corp. (low-income housing on private property) is the line Spitzer's opinion preserved for hypothetical charter school scenarios where private commercial purpose dominates.

Citations and references

Constitution and statutes:

• N.Y. Const. Art. I, § 17 (prevailing wage)
• N.Y. Labor Law § 220 (prevailing wage implementation)
• N.Y. Education Law § 2853 (charter school as public school)
• N.Y. Education Law § 2854 (general statutory exemptions)
• N.Y. State Finance Law § 97-sss (Charter Schools Stimulus Fund)

Cases:

• Cayuga-Onondaga Counties Bd. of Co-op. Educational Services v Sweeney, 89 N.Y.2d 395 (1996) (constitutional origins of prevailing wage)
• Brian Hoxie's Painting Co., Inc. v Cato-Meridian Cent. School Dist., 76 N.Y.2d 207 (1990) (prevailing wage law applies to school district contracts)
• Matter of Erie County IDA v Roberts, 94 A.D.2d 532 (4th Dep't 1983), aff'd, 63 N.Y.2d 810 (1984) (IDA-private lease is public work contract)
• Matter of 60 Market St. Assoc. v Hartnett, 153 A.D.2d 205 (3d Dep't), aff'd, 76 N.Y.2d 993 (1990) (private commercial dev exception)
• Matter of Vulcan Affordable Housing Corp. v Hartnett, 151 A.D.2d 84 (3d Dep't 1989) (private property, no public use, no public work)

Source

• Landing page: https://ag.ny.gov/libraries-documents/opinions/opinions-year
• Original PDF: https://ag.ny.gov/sites/default/files/opinions/2000-F3_pw.pdf

Original opinion text

OPINIONS OF THE ATTORNEY GENERAL

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Opn. No. 2000-F3
NY CONST, ART I, § 17; EDUCATION LAW §§216, 216-a, 226, 2850, 2851, 2852, 2853, 2856;
LABOR LAW §§220, 220-b; STATE FINANCE LAW §97-sss.
Projects for the construction, renovation or repair of a building for a charter school generally will be
subject to sections 220, et seq., of the Labor Law.
April 7, 2000
Hon. Carl P. Carlucci
First Deputy Comptroller
Office of the State Comptroller
Alfred E. Smith State Office Bldg.
Albany, NY 12234

Formal Opinion
No. 2000-F3

Dear Mr. Carlucci:
You have asked whether prevailing wages and supplements must be paid to employees on projects
for work in connection with charter schools, such as work to construct, renovate or repair buildings for
use as charter schools. For the reasons set forth below, we conclude that as a general rule prevailing
wages and supplements must be paid on such projects, but there could be certain circumstances in which
the prevailing wage statutes may not apply.

1. Prevailing Wages and Supplements
   The New York State Constitution provides that laborers, workmen and mechanics engaged in
   "any public work" cannot "be paid less than the rate of wages prevailing in the same trade or occupation
   in the locality within the state where such public work is to be situated, erected or used." NY Const, art
   I, § 17. This provision emanates from the 1905 State Constitution. Cayuga-Onondaga Counties Bd. of
   Co-op. Educational Services v. Sweeney, 89 N.Y.2d 395, 401 (1996). The prevailing wage requirement
   was retained and written in its present form in the 1938 State Constitution. Id.
   Labor Law § 220 implements this constitutional requirement. Labor Law § 220(3) provides that
   "[t]he wages to be paid for a legal day's work ... to laborers, workmen or mechanics upon such public
   works, shall be not less than the prevailing rate of wages" and supplements provided must be in
   accordance with the prevailing practices in the locality. See Labor Law §220(5)(a), (b) and (c).
   The statute provides that the "fiscal officer" determines the prevailing wages and supplements to
   be paid, and these schedules become part of the specifications for the work. Id., §220(3). Outside New
   York City, the Commissioner of Labor is the fiscal officer required to ascertain prevailing wage rates
   and supplements. Id. In New York City, the City Comptroller is the fiscal officer who makes this
   determination. Id. Upon a verified complaint in writing of any interested person or any employee
   organization, the fiscal officer must undertake a compliance investigation to determine whether a
   contractor or subcontractor is paying prevailing wages and supplements. Id., §220(7). The fiscal officer
   may also undertake such an investigation on his or her own initiative. Id. Upon determination of a
   violation of the prevailing wage provisions, the fiscal officer is authorized to require remediation and
   assess civil penalties. Id., §220(3), (8). Upon determination of a wilful violation, additional penalties

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apply, including possible debarment from bidding upon public work projects. Id., § 220-b(3)(b).
Conviction of a wilful violation of the law is a misdemeanor Id., §220(3).
Labor Law § 220 has been interpreted to apply to projects which meet both prongs of a two-part
analysis: first, a public entity must be a party to a contract involving the employment of laborers,
mechanics or workmen; and second, the project under construction must be a public work project.
Matter of Erie County Industrial Development Agency v. Roberts, 94 A.D.2d 532 (4th Dep't 1983),
aff'd, 63 N.Y.2d 810 (1984).
In order to determine whether a charter school building project meets the two-part test of Labor
Law § 220, it is first necessary to examine the statutory purpose and nature of charter schools.

2. Charter Schools
   The purpose of charter schools is to provide opportunities to operate independently of existing
   schools and school districts, provide flexibility to improve student learning and achievement and meet
   other goals. Education Law §2850(2). "Eligible applicants" to establish a charter school include
   teachers, parents, school administrators, community residents or any combination. Id., § 2851. An
   application may be filed in conjunction with a college or university, museum, educational institution,
   not-for-profit corporation or for-profit business or corporate entity authorized to do business in New
   York State. Id., 2851(1). Information required in an application is specified by statute and includes a
   description of the proposed facilities of the school. Id., § 2851(2)(j). If the information regarding the
   facilities is not known at the time of the application, it must be provided later, not more than 10 days
   after acquiring the facility. Id.
   A charter school may be located in an existing public school building, in space provided on a
   private work site, in a public building or in any other suitable location. Id., § 2853(3). Charter school
   operations are financed by payments from the school district for each student enrolled where he or she
   resides in accordance with a fixed formula. Id., § 2856(1). Additionally, a fund is established in the joint
   custody of the State Comptroller and the State Commissioner of Taxation, known as the Charter Schools
   Stimulus Fund, for grants and loans to charter school applicants for start-up costs and costs associated
   with acquisition, renovation, or construction of school facilities. State Finance Law § 97-sss.
   The applicant submits the application to a "charter entity," which includes the board of education
   of a school district, the board of trustees of SUNY or the Board of Regents. Id., §2851(3)(a). Upon
   approval of an application by a charter entity, the applicant and charter entity enter into a proposed
   agreement allowing the applicants to organize and operate a charter school. Id., § 2852(5). The proposed
   agreement contains all the information required to be provided in the application, as supplemented or
   modified. Id., § 2852(5).
   The charter entity then submits the proposed charter, the application and supporting
   documentation to the Board of Regents for final approval. Id. The Board of Regents may issue a charter
   to operate a charter school as proposed by the charter entity, or it may return the proposed charter for
   reconsideration. If the Board of Regents does not act within 60 days the proposed charter is deemed
   approved. Id., §2852(5-a). A subsequent revision of a charter may only be made upon the approval of
   the charter entity and the Board of Regents. Id., §2852(7).
   Upon approval of a charter, the Board of Regents incorporates the charter school as an education
   corporation. Id., §2853(1)(a). An education corporation formed to operate a charter school has all the
   corporate powers necessary to carry out a charter school program, all of the powers of an education

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corporation formed to operate an elementary or secondary school and those powers granted under the
Not-For-Profit Corporation Law that are made applicable to charter schools. Id., §2853(1)(b)
(referencing Education Law §§216, 216-a, 226). The charter entity and the Board of Regents are the
"public agents" authorized to supervise and oversee the charter school. Id., §2853(1)(c).
Significantly, "[a] charter school shall be deemed an autonomous public school." Id., §2853(1)(c).
Also, the charter school law provides that
[t]he powers granted to a charter school under this article constitute the performance of
essential public purposes and governmental purposes of this state. Id., § 2853(1)(d).
Thus, any "eligible applicant" that receives a charter from the Board of Regents to operate a
charter school operates an education corporation. A charter school is deemed an independent public
school, is overseen by the Board of Regents and provides publicly-funded compulsory public education.
It makes no difference whether the successful applicant for a charter is in the private or public sector.
Rather, all charter schools are public entities performing essential public and governmental purposes.

3. Application of the Two-Part Analysis
   As noted above, Labor Law § 220 applies to projects that meet both the "contract" and the "public
   work" prongs of a two-part analysis.1
   a. "Contract" Test
   The "contract" prong of the test is met when a public entity is a party to a contract involving the
   employment of workers. Courts have construed this requirement liberally because Labor Law § 220
   implements the constitutional mandate to pay prevailing wages to workers "engaged in the performance
   of any public work." NY Const, art I, § 17 (emphasis added).
   For example, the public agency need not be a direct party to the contract that requires the
   employment of workers in order to satisfy the contract requirement. Any contract, including a lease or
   financing contract, that a public entity enters into that involves the construction, renovation, or repair of
   a building would contemplate the employment of laborers, workers or mechanics and thus would satisfy
   the first "contract" prong of the test. See Matter of 60 Market St. Assoc. v. Hartnett, 153A.D.2d 205 (3d
   Dep't), aff'd 76 N.Y.2d 993 (1990) (lease agreement between county and limited partnership providing
   financing for construction project); Matter of Erie County Industrial Development Agency v. Roberts,
   94 A.D.2d 532 (4th Dep't 1983), aff'd, 63 N.Y.2d 810 (1984) (lease agreement between industrial
   development agency and private business); Bridgestone/Firestone, Inc. v. Hartnett, 175 A.D.2d 495 (3d
   Dep't 1991)(warranty agreement between subcontractor and supplier pursuant to requirement for
   warranty in general contract between state and contractor).
   Accordingly, contracts that contemplate the construction, renovation or repair of a building for use
   as a charter school may satisfy the "contract" prong of this test. For example, a financing agreement
   between any entity and an IDA to finance the construction or renovation of a facility for use as a charter
   school would satisfy the contract requirement. Similarly, a grant or loan agreement entered into between
   the State and any entity to receive money from the Charter Schools Stimulus Fund would satisfy the
   contract requirement. Likewise, any agreement to lease all or part of an existing public building for use
   as a charter school that involves renovations or repairs to the building would satisfy the contract prong.
   Importantly, for charter school construction projects, as a general rule the charter itself will

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constitute the "contract" by a public entity that meets the first prong of the prevailing wage analysis.
Applicants for a charter are required to provide the charter entity with information about the facilities to
be used for the school. That information, if approved by the charter entity, becomes a term of the
proposed charter. Education Law §2852(5)(a). Once approved by the Board of Regents, it becomes a
term of the charter. Id. § 2852(5-a). If the information about the facilities is not known at the time of the
application, it must be provided to the charter entity, and, if applicable the Board of Regents, within 10
days of acquiring facilities for the school. Id., § 2851(2)(j). This and other updated information also
becomes part of the charter. Id., § 2852(5). As a result, if an applicant for a charter school will use a
building that will be constructed or renovated to house a charter school, then the charter that is issued by
the State will meet the "contract" clause of the analysis, because it is a contract entered into by a public
entity involving or contemplating the employment of laborers, mechanics or workmen. The "public
entity" involved will be either the Board of Regents, or SUNY or the school district that signs the charter
agreement, and in certain circumstances the applicant could be a public entity as well.
In addition, after the charter school has been established, any contract entered into by the charter
school as part of a project to perform construction work upon, renovate or repair a building used by the
school will satisfy the "contract" prong of the test. Upon approval of a charter by the Board of Regents,
the charter school becomes incorporated as an education corporation and is deemed to be an
"independent and autonomous public school." Education Law § 2853(1)(c). Thus, the law makes clear
that the charter school itself is a public entity, and contracts entered into by the charter school that
involve or contemplate the employment of workers will meet the test. Although Labor Law § 220(2) is
limited to contracts entered into by "the state or a public benefit corporation or a municipal corporation
or a commission appointed pursuant to law," as noted above this statutory list cannot supersede the
constitutional requirement that prevailing wages be paid to workers engaged in the performance of "any"
public work. As a result, the statute is liberally construed and has been interpreted to cover contracts
entered into by other public or governmental entities. See e.g., Stephens and Rankin, Inc. v. Hartnett,
160 A.D.2d 1210 (3d Dep't 1990) (holding that Labor Law §220 applies to commission created by
federal law).
b. "Public Works" Test
Under the second prong of the prevailing wage analysis, the project under construction must be a
"public works" project. The term "public works" is not defined in the Labor Law.
Because the statute does not define "public work", it has generally been given its plain
meaning. ... Contemporary definitions focus upon the public purpose or function of the
particular project. ... To be a public work the project's primary objective must be to benefit
the public.
60 Market St. Assoc. v. Hartnett, 153 A.D.2d 205, 207 (3d Dep't), aff'd, 76 N.Y.2d 993 (1990)
(citations omitted). Courts consistently have held that the purpose or function of a project determines
whether it is a public work and have examined whether the purpose includes public use or enjoyment.
Matter of Erie County Industrial Development Agency v. Roberts, 94 A.D.2d 532 (4th Dep't 1983),
aff'd, 63 N.Y.2d 810 (1984); Cattaraugus Community Action, Inc. v. Hartnett, 166 A.D.2d 891 (4th
Dep't 1990); Matter of Vulcan Affordable Housing Corporation v. Hartnett, 151 A.D.2d 84 (3d Dep't
1989). The Court of Appeals has concluded that the prevailing wage law applies to all public works
including contracting by school districts. Brian Hoxie's Painting Co., Inc. v. Cato-Meridian Cent.
School Dist., 76 N.Y.2d 207 (1990).
We believe that, as a general rule, any project involving the construction, renovation or repair of a
building, the purpose of which is to provide a facility for a charter school would, as its objective, benefit

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the public. Such a project, therefore, would meet the "public work" prong of the test for application of
the prevailing wage laws. A charter school is characterized as a public school and carries out an essential
public purpose in providing compulsory public education to students. Without question, a charter school
benefits the public.
The "public work" test generally will be met by such construction activities even if the charter
school is not located on public property. The charter school law provides that operators of charter
schools may own, lease or rent their buildings and that a charter school may be located on a private work
site. Education Law § 2853(3)(a). New construction or renovations may be required at these privatelyowned locations. Nevertheless, any such construction or renovation of a private building to provide a
facility for a charter school must meet the unique needs of a school and the children who will attend.
Moreover, as noted above, the school itself is statutorily designated as a public school which is fulfilling
an essential public and governmental purpose. Thus, construction projects for charter schools are
distinguishable from construction projects on private property at issue in prior cases in which the
prevailing wage laws were held not to apply. See e.g., Matter of Vulcan Affordable Housing Corp v.
Hartnett, 151 A.D.2d 84 (3d Dep't 1988) (Labor Law § 220 held not to apply to construction of low and
moderate income housing on private property, because there was "no public use of the structure . . . no
public access and no public enjoyment" of the project); Matter of Cattaraugus Community Action Inc. v.
Hartnett, 166 A.D.2d 891 (4th Dep't 1990) (holding that prevailing wages need not be paid on
construction of home for homeless teenage mothers, because private entity developed and owned the
facility, project was to be used for a "specific and narrowly defined group" and owner agreed to
maintain facility as home for only seven years).
The exemption of charter schools from taxes, fees and assessments supports the general
conclusion that all charter schools -- including those located on private property -- benefit the public.
(Nonprofit organizations have exemptions from some of these taxes and charges under other provisions
of law.) A charter school is exempt to the same extent as other public schools from all taxation, fees,
assessments or special ad valorem levies on its earnings and its property, including property leased by
the charter school. Education Law §2853(1)(d). Assessments and ad valorem levies are charges on real
property paid by the owner of the property. Presumably, this exemption is provided to public and private
owners of buildings used for charter schools because the legislative scheme for development of charter
schools contemplates projects in which private owners lease facilities to charter schools and, therefore,
benefit the public.
Nevertheless, there may be circumstances in which the "public work" test will not be met and the
prevailing wage laws would not apply to a charter school construction project. For example, if an entity
involved in the operation of a charter school were to enter into a contract with a developer who had no
connection with the charter school, for the construction of a new developer-owned building, and the
project were controlled by the private developer, financed entirely by the developer's funds, and the
building leased to the charter school operator for a period substantially shorter than the useful life of the
building, then Labor Law § 220 might not apply. Under existing case law, in these circumstances the
builder could be deemed to be undertaking the project purely to make a profit, and the public benefited
only incidentally. See 60 Market St. Assoc., supra, 153 A.D.2d at 207-08.
If any of these factors were not present, however, then it is more likely that prevailing wages and
supplements would have to be paid on the project. Moreover, some characteristics of any charter school
project may distinguish it from the project under review in 60 Market St. Assoc. in which Dutchess
County leased office space from a private developer. Generally, office space easily can be reconfigured
for other tenants, supporting the conclusion that the private developer would profit from the short-term
county tenancy as from any other tenant, rather than principally provide a public benefit. In contrast,
design of a charter school would require substantially more tenant-set specifications, for example,

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classrooms, an auditorium, gymnasium, laboratories and other unique characteristics of a school. Thus,
the tenant-operator of the charter school would have more control over design, and a private developer
would be more constrained with respect to future tenants of that space as configured. Further, under the
Charter School Law the private owner of the building receives exemptions from various real property
assessments, establishing some public connection to the project. The fiscal officer will have to undertake
a case-by-case analysis of the circumstances in determining whether Labor Law §220 will apply.
For the reasons set forth above, we conclude that projects for the construction, renovation or
repair of a building for a charter school generally will be subject to sections 220, et seq., of the Labor
Law as indicated in this opinion.
Very truly yours,
ELIOT SPITZER
Attorney General

1 The application of Labor Law § 220 to charter school projects is not affected by Education Law § 2854(1)(b), which
provides in part: "A charter school shall meet the same health and safety, civil rights and student assessment requirements
applicable to other public schools except as specifically provided in this article. A charter school shall be exempt from all
other state and local laws, rules regulations or policies governing public or private schools, Boards of Education or school
districts, including those relating to school personnel and students except as specifically provided in this article." This
provision does not exempt charter schools from all state laws, but rather from only those laws that specifically apply to public
or private schools. Any other interpretation would preclude applications of all labor laws, like minimum wage laws, as well
as zoning laws, criminal laws, and hosts of other general laws that are not mentioned in the charter school law. Moreover,
given the constitutional mandate of the prevailing wage law, any general exemptions from State law found in the charter
school law would not eliminate the prevailing wage requirement.

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