As the amount of work performed by subcontractors continues to grow, so does the need for STA services and representation. STA represents its members on important City and State-wide boards, task forces and committees. STA works closely with all City and State agencies as well as local, state and national industry organizations on behalf of its member subcontractors.
STA provides the following member services
- The School Construction Authority
- The Comptroller’s Prevailing Wage Enforcement Council
- The Building Trades Employer’s Association (BTEA)
- Empire State Subcontractors Association
- National Subcontractors Association
- New York Building Congress
STA members can save money from reduced workers’ compensation costs through the largest Safety Group in New York State. Through the Safety Group, STA members can benefit from up front savings as high as 25% along with additional year end dividends. The Safety Group also provides educational programs and professional services with proven cost savings.
During the second year of its operation, the Safety Group was expanded to become available to all chapters of the Empire State Subcontractors Association (ESSA). This original group of 12 STA members back in 1994 has grown to 56 members with an excess of four million dollars of statewide premium volume.
Additionally, participating ESSA members statewide have been greatly involved in the politics of Workers’ Compensation Reform. This program has continuously proven to be of value to subcontractors’ specific workers’ compensation problems. It is critical that subcontractors’ unique needs be presented in today’s reform efforts.
With the industry looking toward the subcontractor to perform ever-increasing portions of the construction contract, the need for legislation to help protect subcontractors continues to grow.
In 1975, with the support of the Empire State Subcontractors Association, STA embarked on a legislative program that has successfully produced 40 laws to protect and improve the economic well-being of its members. The very first piece of legislation made it illegal for any contract to contain a ‘waiver of lien’ on either public or private jobs. Subsequent legislation throughout the years further enhanced the lien process. Other legislative victories addressed such issues as Prompt Pay and Timely Requisitions for Contingent Payment. STA submitted briefs in support of the Court of Appeals’ decision on the abolishment of the “pay if paid” clause and supported the legislation for the Workers’ Compensation Reform to allow for payment based on “Hours Worked” as opposed to salary.
STA continues to propose legislation that would require owners to put retainage into interest bearing escrow accounts and seeks to modify the Safe Place to Work Law (240/241) to permit a negligence standard. STA is working full time in Washington, Albany, and New York City to effect legislative change that benefits subcontractors. As STA continues to press for legislative change at all levels of government, it is proud of its victories:
- Ban On Waiver of Mechanic’s Lien
It is illegal for any contract to contain a waiver of lien provision on either public or private jobs.
- Ban On Broad Form Hold Harmless
Subcontractors and suppliers cannot be compelled to agree to hold harmless and indemnify GCs and owners whether public or private jobs against their negligence.
- Anti-Wrap Up Insurance
Owners or contractors can no longer compel a subcontractor or supplier to buy his insurance from a source other than that of his choice. Subs can no longer be back-charged on public or private jobs in the event an owner chooses to purchase blanket insurance to cover all trades on a job.
- Completed Job Notification
Enables a subcontractor or materialman to demand written notification from a public owner as to the date when the contract has been determined completed and accepted. Since a lien on public job can be filed at any time within 30 days after completion and acceptance of the project, a sub or materialman would be alerted on his last chance to file a lien.
- Lien Filing Information
This requires that the name of the owner of the real property and the name of the building (if different) and a legal description of the real property (on private jobs) be given on each construction contract and subcontract agreement. During construction, the contractor and subcontractor must be notified of any change.
- Payment/ Retainage
Contractor may hold no more that 5% retainage from subcontractors on progress payments when performance and payment bonds are provided. Law requires contractors to pay subs within 15 days after the contractor receives payment from public owners.
- Recovery of Interest and Fees in Bond Claims
Law authorizes a judge to compensate subcontractors and suppliers who recover on public improvement action against a labor and material payment bond by allowing the recovery to include interest. The recovery may also provide reasonable attorney’s fees when the court feels that the claim or defense against the bond was frivolous.
- Extension of Payment Bond Filing Time
Law extends the time period for a second tier sub to file a notice against a payment bond to 120 days (similar to the lien period) and allows a sub to initiate a suit up to one year from the time his payment becomes due on private or public jobs.
- Sub to Be Paid Percentage of Work Completed
This requires contractors to pay the subcontractors the amount received from the public owner. The contractor is required to pay the subcontractor the amount representing that portion of the sub’s work that has been completed and accepted.
- Private Job Payment Bonds to Be Filed
When the cost of construction on a private project exceeds $10,000, you are required to file copies of payment and performance bonds with the County Clerk’s Office in the county where the job is done.
- Intermediate Hold Harmless
Prohibits the use of “hold harmless” agreements wherein owners and general contractors require subcontractors to indemnify them for partial negligence of such owners and contractors.
- Extension of Lien Filing Time
This extends the lien filing period on private work from the previous four months to eight months from the last performance of work or furnishing of materials. The four-month period continues to apply to single family dwellings. Note: The eight-month lien period applies only if the owner’s construction contract was entered into after Sept. 1, 1982.
- Timely Requisition Required for Contingent Payments
Law prevents a contractor from claiming a contingency payment contract clause “the sub gets paid only if and when the contractor is paid by the owner” as a defense to a demand for payment by a subcontractor, where the contractor has failed to requisition final payment within 90 days of substantial completion of public job.
- Prompt Payment
Law requires state agencies and the Comptroller’s Office to make contract payments within 45 days (period reduced to 30 days in 1988), or face an interest payment that would be charged to the responsible agency.
- Plan Deposit Refund
This allows non-bidders and subcontractors who don’t bid directly with the public owner to recoup deposit less the actual cost of reproduction if the plans are returned in good condition.
- Interest On Diverted Trust Funds
This provides for payment of interest on diverted trust funds and that a trustee or transferee shall be liable for interest on funds diverted for public or private jobs.
- Individual Claims Replace Previous Class Action
Based on this law, claimants are now allowed to maintain a class action regardless of the number of claimants in public or private jobs.
- Trust Fund Rights Extended
This extends the time period subs may file claim under trust provisions of lien law for public and private jobs.
- Time Period Established for Subs to Obtain Contract Information
This provides for a 30-day time period within which a construction owner must provide a sub or supplier the terms of his contract with the prime contractor.
- Eight Month Lien Filing Period
This clarifies the Lien Law as to when the eight-month period applies as opposed to the four-month period. Law provides an eight-month filing period for liens by subs and suppliers when performing work for housing developers.
- Amendment of Lien Law in Relation to Continuing a Mechanic’s Lien
This amends the Lien Law in relation to continuing a mechanic’s lien on a public improvement lien by filing an extension thereto.
- Interest Pass Through On Late Payments
This requires interest pass through on late payment from the state to primes.
- Subcontractor Prompt Payment
The amends section 139-f of the State Finance Law. This added teeth to the 15-day period between prime contractors and subcontractors on state projects by asserting interest penalties against prime contractors who fail to pay within 15 days.
- Amendment of Section 11-b of The Lien Law
This amendment allows the mandatory service of a copy of the notice of lien to the contractor to be made either simultaneously with the filing of such notice with the County Clerk or within 30 days thereafter.
- Service of Lien by Mail
This law enacted in 1991 amended section 11 of the Lien Law. It made it clear that lienors may choose from a number of alternative methods of serving a copy of the notice of lien upon the owner in the first instance, without first having to attempt personal service.
- Amendment of The Lien Law as It Relates to The Industrial Development Agency
This new law permits subcontractors and suppliers the right to file a lien against projects financed through the Industrial Development Agencies.
- Prompt Pay
Passed in 1992, this act amends the general municipal law related to providing interest to contractors upon late payment by a public owner and providing interest to subcontractors and materialmen upon late payment by a contractor.
- Prompt Pay Law – Permanent
This new law has reduced the payment period of 45 days to 30 days with some exceptions. The law now requires local governments which includes cities, counties, towns, villages and school district to pay interest on payments made later than 30 days after the contractor has submitted an ‘approval requisition’ for payment.
- Hold Harmless Technical Corrections Bill
This bill made a technical correction to clarify subdiv. 1 section 5-322.1 of the General Obligations Law which was causing confusion due to an error in the original wording.
- Lien Law Made More “User Friendly”
The new law allows subcontractors and suppliers to serve a copy of the Notice of Lien on the owner and/or contractor up to five days prior to filing the Notice of Lien in the County Clerk’s Office or with the public owner. The lienor can now mail their Notice of Lien to the owner and/or contractor at the same time the lien is mailed to the County Clerk or public owner.
- Extends Duration of Public Lien (Section 18 Lien Law)
Extended the duration of public improvement liens from six months to one year. Also established a limit on the number of extensions of both private and public improvement liens which are allowed.
- Lien Discharge Undertakings (Section 21 Lien Law)
Sets the amount of an undertaking required to discharge a lien at 100% of the lien amount. Prior to enactment of this law, undertakings to discharge liens (usually in the form of a bond), were required to be set by a judge with or without a stipulated agreement between the surety providing the bond and the lienor. This eliminates the time and expense of this procedure by setting the amount of the undertaking at 110% of the lien amount.
- Technical Amendment – Duration of Public Lien (Section 21 Lien Law)
Makes Section 21 of the Lien Law consistent with Section 18 of the Lien Law, as amended by ESSA in 2000, which extended the duration of public improvement liens from six months to one year.
- Modifies The Miller Act to Provide 100% Payment Bond
On the Federal level modification of the Miller Act established in 1993, which provided 100% performance bond but only $2,500,000 for a payment bond. Effected January 1, 2003, we were able to modify the Miller Act to provide 100% performance bond and 100% payment bond for all subcontractors and suppliers. The Miller Act had not been updated since 1933. The 1993 amendment was signed by Bill Clinton.
- Payment Bond On Hybrid Projects (Section 5 Lien Law)
Requires payment bonds or other forms of security to be posted by owners on certain “hybrid” construction projects valued at more than $250,000, such as those where a private building is constructed on public land.
- Lien Foreclosure Actions
This bill would exempt owners as necessary parties to lien foreclosure actions where the lien has been “bonded off”.
- Payment Bond Precondition (Section 5-322.1 General Obligations Law)
Made contract provisions requiring subcontractors and suppliers to exhaust all lien remedies before initiating legal action against a payment bond against public policy, void and unenforceable.
- Lien On Retainage Law (Chapter 367 Laws of 2011)
Amends Section 10 of the lien Law, and will allow subcontractors to effectively reopen their lien rights on private projects and file a lien for unpaid retainage up to 90 days after the retainage was due to be released.
- Statute of Limitations On Payment Bond Claims (Chapter 380 Laws of 2011)
Amends Section 137 of the State Finance Law. This new law states that the statute of limitations for commencing a payment bond claim begins on the date the public improvement has been completed and accepted by the public owner.
- SCA Bill (Chapter 519 Laws of 2014)
Effectively “preserves” a subcontractor’s right to file a notice of claim against the SCA on an unresolved change order for up to 90 days after the date of payment for the amount claimed was denied by the SCA. Previously, a notice of claim against SCA had to be filed within 90 days after a potential claim was considered “accrued”, which was a vague standard that often resulted in the unjustifiable anomaly of a subcontractor’s claim being time-barred in court, before they realized they had a claim.
Business Practice Interchange
The Business Practice Interchange (BPI) provides STA members with confidential information about general contractors and builder-owners generally unavailable from any other source. The BPI allows STA members to benefit from the experience of fellow subcontractors regarding the individual payment practices of builder-owners and general contractors.
STA maintains files on general contractors and builders whom STA members have reported doing business with in the past two years. This allows STA members the benefit of being able to consult with other members who have had prior experience in dealing with a particular contractor or builder. STA members are not referred to by name in these files, but by membership code only.
How It Works. STA office maintains a file on each general contractor and builder with whom any STA member has reported doing business within the past year or two. On each general contractor’s or builder’s card is listed, BY MEMBERSHIP CODE, all STA members who have reported doing business with or made inquiries about that particular general contractor or builder.
An STA member desiring information about a particular GC or builder can call STA’s office at 212-398-6220 for the STA member code numbers listed on the card of that GC or builder. The office gives these numbers immediately if the requested GC or builder has been reported to STA. The member then consults his/her copy of STA Membership Directory for the Business Interchange listing and then finds the name of the company that corresponds with the code numbers given by STA. Checking the Membership section, the principals of the company are listed and direct contact can be made with member subcontractors or suppliers who have dealt with the subject inquiry. STA maintains a close relationship with chapters throughout the country and in most cases can obtain information throughout the nation.
STA members benefit from the coordinated efforts of “Umbrella Actions” which help unpaid subcontractors and suppliers get paid on troubled private projects. The idea that a coordinated action by subcontractors and suppliers could effectively encourage owners and contractors to meet their financial obligations is at the heart of STA and is essentially what led to the formation of the organization more than 50 years ago.
Before STA. Before the formation of STA, trade contractors faced the same difficulties they now encounter, except that construction managers were not then a factor. Owners and developers ran short of cash; “extras” soared; problems in construction arose; jobs suffered from delays; and general contractors, on occasion, diverted money to pay for other projects. Unpaid subcontractors and suppliers, on projects where various combinations of such problems existed, found themselves forced to seek payment from entities that were substantially larger and with more resources than the individual subcontractors had. By joining forces those subcontractors and suppliers discovered that they could stand up to defaulting owners and developers and general contractors and get results without paying large sums for legal fees.
How It Worked. Originally, the motivating force behind “Umbrella Actions” was Irwin Taylor, Esq., STA’s original legal counsel. When STA’s Executive Director received information from several members that indicated that a project was “in trouble” he would notify Mr. Taylor, who would then call a meeting of all subcontractors on the project. Those who found that their work had been stopped, or that payments were not being made in accordance with their subcontracts, would meet jointly with Mr. Taylor. Prior to meeting with the subcontractors, Mr. Taylor would informally discuss with the contractor the problems that interrupted payment to subcontractors. When the unpaid subcontractors met with Mr. Taylor, he would urge appropriate action, including the filing of mechanic’s liens and, if necessary, the commencement of legal action.
At the meeting, unpaid subcontractors and suppliers learned about the nature of the problems on the project from the general contractor’s prospective. Sometimes meetings with the general contractor were arranged to see if problems resulting in non-payment could be amicably resolved. At such meetings the general contractor would be impressed with the prospect that it would face a united community of unpaid subcontractors and suppliers.
If the problems could not be resolved, subcontractors were advised of their lien rights and received project descriptions to facilitate the filing of liens. Subcontractors also found that they could save legal fees by combining their collection efforts where no conflict of interest existed between the subcontractors.
How it works now. The tradition started by Irwin Taylor continues today. When STA’s Executive Director receives information indicating that several subcontractors on a project are not being paid, and that there may be problems that will impact on all or substantially all of the trade contractors on that project, he initiates the Umbrella Action. A meeting is scheduled with all trade contractors who have an interest whether they are STA members or not. At the meeting, information on filing mechanic’s liens is distributed. In addition, information is exchanged among the attendees as to the nature of the problems on the project, and what each has been told by the general contractor or construction manager. On occasion, at such meetings, trade contractors have been “shocked” to learn that the general contractor or construction manager has given different reasons for interruption in the project payments to different subcontractors.
On behalf of the unpaid subcontractors, STA’s general counsel then calls the general contractor or construction manager explaining that a significant number of trade contractors have banded together to coordinate their efforts to enforce their contract rights. Counsel’s ensuing dialogue with the general contractor or construction manager usually then provides sufficient information for the trade contractors to decide whether legal action is necessary. Frequently, when faced with the prospect of dealing with a united subcontractor front, payment is facilitated. However, sometimes a project is so “troubled” that litigation must go forward.
The Future of Umbrella Actions. Umbrella Actions give subcontractors a chance to get information, facilitate filing mechanic’s liens and help cut legal costs, while giving all affected subcontractors a chance for united action. Remember, in unity there is strength.
Government Agency Interaction
STA members working for public agencies have the advantage of Government Agency Interaction which helps them in situations of delay and non-action in the processing of Notice of Direction (NODs) and Change Orders (COs).
The STA’s Public Agencies Committee is able to help STA members participating in public projects by reviewing NODs and COs of the following agencies:
- NYC Department of Environmental Protection
- NYC Department of Design & Construction
- NYC Housing Authority
- NYC School Construction Authority
- NYC Mayor’s Office of Contract Services
The Public Agencies Committee is able to review NODs and COs with these agencies regularly and monitor the process towards identifying the reasons for delay and non-payment.
NOTICE OF DIRECTION AND CHANGE ORDERS
If you are having problems with Notices of Direction (NODs) and Change Orders (Cos) and if you doing work for the following agencies (see list below) , the STA can be of invaluable assistant to you.
- New York City Department of Environmental Protection
- New York City Department of Design & Construction
- New York State Dormitory Authority
- New York City Health and Hospital Corporation
- New York City Housing Authority
- New York City School Construction Authority
- New York City Transit Authority.
Through the efforts of our association’s Public Agencies Committee, we will be able to review NODs, (Notice of Direction), and COs (Change Orders) with the above agencies regularly. This joint effort will monitor the progress of the processing of the NODs and COs and help identify the reasons for delay or non-action by the agency involved.
The agencies have indicated that it is in everyone’s best interest to process COs in a timely fashion. If you want to take advantage of this opportunity, you must provide STA with accurate information on the following:
- Project name and contract number.
- Location by borough.
- Name of Prime Contractor or CM.
- NOD or CO identification number.
- Trade involved.
- Description of work involved.
- Date of submission.
The agencies request that you submit only orders that are at least 60 days old.
StayAlert Lien Reports
STA’s StayAlert Lien Reports provide its members with the latest available information about liens filed. StayAlert is a listing of commercial liens filed in New York City during the previous month. It is an invaluable business tool that helps subcontractors steer clear of contractors and owner-builders who fail to pay their bills.
The Subcontractors Trade Association (STA) has negotiated an agreement with Dodge Data & Analytics to provide STA members access to a virtual PlanRoom covering the New York area. Basic access to the PlanRoom is free of charge to STA members.
CLICK HERE TO GO TO THE STA PLANROOM
The STA PlanRoom allows members to:
- Find work by evaluating bidding documents on current projects out to bid provided by Dodge
- Load their own projects and share them with other STA members publicly or privately
- Network with other STA members using the member list provided in the PlanRoom
- Manage contact lists
- Send notifications on projects
- Additional functionality is available.
STA continues to look for ways to help you be more successful and we believe the STA PlanRoom is a great benefit of your membership. You join us for many reasons, but two common themes include: first, how can I work with other professionals? and second, how can I grow my business? The STA PlanRoom meets both of those objectives.
To get a better understanding of how the STA PlanRoom can help your business, join a Dodge hosted webinar! During these webinars, Dodge will review how you can use the STA PlanRoom to load a project, review current projects posted by Dodge, use STA’S Membership list to collaborate on projects, import or build your own contact lists and how to sign in.
Wednesday, September 13: 8:00am, 11:00am, 4:00pm
Thursday , September 14: 8:00am, 11:00am, 4:00pm
Wednesday, September 27: 8:00am, 11:00am, 4:00pm
Thursday , September 28: 8:00am, 11:00am, 4:00pm
Wednesday, October 4: 8:00am, 11:00am, 4:00pm
Thursday , October 5: 8:00am, 11:00am, 4:00pm
Webinar Call Information:
Meeting Phone Number: 1-844-740-1264
Meeting Number: 802-613-312