By Kushnick Pallaci PLLC | September 22, 2026
A construction crew arrives at the jobsite, but the work area is not ready. Another trade has not finished or a delivery never arrived. The superintendent sends everyone home. On another project, a subcontractor receives a late-night instruction cancelling the following morning’s work.
These situations raise two different questions: What must the employer pay its employees, and who ultimately bears that cost under the construction contract?
New York’s Construction Reporting Pay Act, signed September 9, 2026, adds Labor Law §§ 196-e and 224-g, effective December 8, 2026. Beginning on that date, covered construction employees will have new minimum-payment protections when they report for work or their scheduled shifts are cancelled on short notice.
For general contractors and subcontractors in New York City, Long Island, and throughout New York State, preparation should connect crew scheduling, payroll, jobsite communications, and contract administration.
New York construction reporting pay: the key rules
- Reporting for work: Under the general rule, a covered employee will be entitled to at least four hours of pay, or the regularly scheduled shift if shorter, at the promised hourly wage.
- Short-notice cancellation: A scheduled shift cancelled with less than 12 hours’ notice will require two hours of pay at the promised hourly wage.
- Covered prevailing-wage projects: Separate rules will require at least four hours of reporting pay, and two hours of short-notice cancellation pay, at the applicable prevailing wage including supplements.
- Contract reimbursement: Paying employees does not automatically give a contractor a right to recover that cost from the owner, general contractor, or another trade.
Which construction workers and projects are covered?
The general reporting-pay provision uses the definition of construction in Labor Law § 861-b. Coverage extends beyond new buildings to activities involving reconstruction, alteration, maintenance, rehabilitation, repair, renovation, demolition, excavation, and other improvements to land. Contractors should evaluate the work actually performed rather than relying only on a project’s description as new construction, renovation, or maintenance.
Worker classification also matters. Calling someone an independent contractor, paying against an invoice, or issuing a Form 1099 does not settle the question. The Construction Industry Fair Play Act establishes a presumption of employment, subject to its independent-contractor and separate-business-entity tests.
Before changing scheduling policies, identify covered employees and determine which projects fall under the separate prevailing-wage provisions. Public work and certain other covered projects require a different payroll analysis.
Four-hour reporting pay under Labor Law § 196-e
Beginning December 8, 2026, Labor Law § 196-e will generally require a covered construction employee who reports for work at the employer’s request or permission to receive payment for at least four hours, or the regularly scheduled shift if shorter, at the employee’s promised hourly wage.
Example: a crew member is sent home after one hour
An employee earning $40 per hour reports for a regularly scheduled eight-hour shift. After one hour, the employer sends the employee home because the work area is unavailable. Applying the general reporting-pay rule, the minimum payment would be $160. The employee earned $40 for the hour worked, leaving an additional $120 needed to reach the minimum.
This is a minimum-payment requirement. It does not automatically add four hours of pay on top of every completed workday. For payroll planning, identify both the promised hourly wage and the regularly scheduled shift; the general statute does not simply direct employers to use the minimum wage.
Two-hour cancellation pay when notice is less than 12 hours
Section 196-e separately requires two hours of pay at the promised hourly wage when an employer cancels a covered employee’s scheduled shift with less than 12 hours’ notice. The employee need not first arrive at the jobsite for this provision to apply.
Example: a 7:00 a.m. shift is cancelled the night before
An employee earning $40 per hour is scheduled to start at 7:00 a.m. The employer cancels the shift at 9:00 p.m. the previous evening, providing ten hours’ notice. Applying the cancellation rule, the payment would be $80.
For that same start time, 7:00 p.m. the previous evening marks the 12-hour point. Consider setting an internal decision deadline earlier so there is time to communicate the decision and address delivery problems.
A decision to cancel and notice to the affected employee are not necessarily the same event. Preserve the actual communication, including its timing, instead of relying solely on a supervisor’s recollection that the crew was notified.
Public works and other covered prevailing-wage projects
Labor Law § 224-g applies to construction projects covered by the prevailing-wage provisions identified in that section. It requires reporting pay of no less than four hours at the applicable prevailing wage, including supplements, for the employee’s regularly scheduled work classification. Unlike § 196-e, it does not contain the same shorter-scheduled-shift limitation.
The provision also requires two hours of prevailing wages, including supplements, for a scheduled shift cancelled with less than 12 hours’ notice.
Section 224-g contains an exception when the posted prevailing-wage schedule provides reporting-pay wages or benefits greater than those specified in that section. Contractors should review the applicable schedule and the exception’s scope before determining reporting-pay and cancellation-pay obligations. Payments owed under § 224-g are deemed prevailing wages or supplements.
Contractors bidding or administering New York public construction contracts should review wage schedules, work classifications, supplements, and relevant labor agreements together. A procedure developed for a private, non-prevailing-wage project should not automatically be carried over to a covered prevailing-wage project.
Do weather delays and jobsite shutdowns create an exception?
The enacted text does not contain an express, general exception for bad weather, missing materials, unavailable work areas, or an owner’s shutdown instruction. Contractors should not assume a cancellation is exempt simply because the underlying problem was outside their control.
That does not mean work should continue under unsafe conditions to avoid a payroll expense. Safety decisions and wage-compliance decisions should be handled separately.
Test how the company would respond to a forecast storm, cancelled inspection, delayed concrete delivery, or unexpected loss of site access. Identify who makes the decision, who contacts employees, who informs payroll, and where those communications are preserved. The objective is a documented decision and the correct payroll response when work cannot proceed.
Who pays the cost under the construction contract?
A statutory obligation to pay employees does not, by itself, establish a right to reimbursement from another project participant. The Act establishes employee compensation requirements; it does not create a general mechanism allocating those costs among owners, general contractors, and subcontractors.
Suppose a subcontractor’s crew is scheduled for Monday morning. Late Sunday evening, the general contractor cancels the work because the preceding trade is not finished. The subcontractor should evaluate employee-payment obligations separately from any request for reimbursement under the subcontract.
This is an issue to address during construction contract drafting, review, and negotiation. Review responsibility for site readiness, scheduling authority, suspension provisions, notice requirements, and additional labor costs before a dispute arises.
For new agreements and appropriate amendments, consider addressing:
- Who may direct crew mobilization, reassignment, or cancellation.
- How shutdown instructions must be communicated and documented.
- What notice and supporting records are required for additional compensation.
- How documented reporting-pay and cancellation-pay costs will be allocated, including any limitations or exclusions.
Vague language assigning “all delay costs” may leave important questions unanswered. Treat requests for additional time and requests for additional money separately during the contract review.
Preserving a reimbursement, delay, or change-order claim
When a shutdown has already occurred, preserve the information needed to evaluate a construction delay or change-order claim. The record should establish the planned work, scheduled crew, instruction that changed the plan, and reason the work could not proceed.
Keep schedule updates, emails, texts, daily reports, payroll records, and communications about reassignment or mitigation. A payroll entry establishes a recorded cost; it does not necessarily establish who caused the interruption, whether the cost was reasonably avoidable, or whether the contract permits recovery.
A separate cost code tied to each underlying event can make these expenses easier to evaluate. If responsibility remains disputed, the analysis should connect the contract, causation, notice, and supporting records as part of the broader construction litigation strategy.
Wage claims and potential general-contractor exposure
Section 196-e treats payments owed under that section as wages. Under Labor Law § 198, a successful employee wage claim can result in unpaid wages, reasonable attorneys’ fees, prejudgment interest, and—in the absence of the employer establishing the statutory good-faith defense—liquidated damages equal to the unpaid wages. Available remedies depend on the claim and applicable provisions.
A small payroll error can become significant if repeated across a crew. For example, a $120 shortfall affecting ten employees totals $1,200 for one event, before additional remedies. Employers should connect their payroll review with construction wage-and-hour defense planning, including wage demands, prevailing-wage investigations, payroll audits, and worker-classification disputes.
General contractors should also consider existing Labor Law § 198-e, which can impose liability for certain subcontractor wage debts at any tier. It has its own definitions, exclusions, notice procedures, and limitations, including exclusions for Article 8 contracts and certain residential contracts. Coverage should not be assumed merely because a project involves construction.
Whether a particular reporting-pay or cancellation-pay claim can be pursued against a prime contractor requires analysis under those provisions. Review lawful payroll-information requirements, documentation duties, notice procedures, and contractual remedies for subcontractor noncompliance. Section 198-e permits certain remedies against subcontractors while restricting arrangements that diminish employees’ statutory rights.
Payroll and scheduling records contractors should preserve
Labor Law § 195 already requires accurate payroll records for at least six years and addresses wage statements, rates, hours, and applicable supplements. For reporting-pay and cancellation-pay compliance, connect each payroll entry to the scheduling event.
A practical record should include:
- The original shift assignment and the person who authorized it.
- Any cancellation or change, including the time and method of employee notification.
- The employee’s actual reporting and work times.
- The reason for the interruption and any reassignment or mitigation efforts.
- The applicable rate, classification, supplements, and payment calculation.
These are recommended operational records; the new Act does not expressly mandate a particular scheduling application or cancellation form.
Keep actual hours worked distinguishable from payments for unworked time. Ask the payroll administrator to review wage-statement presentation, overtime treatment, supplements, and applicable labor agreements. Test several hypothetical reporting and cancellation scenarios before implementation.
How to prepare before December 8, 2026
- Confirm coverage and payroll rules. Identify covered employees and projects, distinguish the general and prevailing-wage provisions, and test payment calculations.
- Set scheduling and communication procedures. Designate who may schedule or cancel crews, establish an internal decision process, and preserve communications to employees.
- Review contracts and cost allocation. Address mobilization, suspension, notices, reimbursement, and subcontractor compliance rather than assuming existing forms cover the new payments.
- Train the field and payroll teams together. Give project managers, superintendents, dispatchers, and payroll personnel a consistent written procedure with examples drawn from the company’s work.
The procedure should make three questions easy to answer after an interruption: What was scheduled? What was communicated? What was paid?
The enacted text does not expressly resolve every operational question, including certain same-day reassignments, changes in shift start times, or events potentially implicating both reporting pay and cancellation pay. Do not assume the payments always stack, that one always replaces the other, or that a particular notification method is sufficient in every circumstance. Review any implementing regulations, agency guidance, or amendments before adopting a final policy and again before the effective date.
Discuss reporting pay, payroll compliance, and contract terms
A jobsite interruption can create both a payroll issue and a contractual cost-allocation issue. Address them separately, but document them together. Kushnick Pallaci PLLC assists New York City, Long Island, and other New York construction businesses with contract review, project disputes, and wage-and-hour defense.
For help reviewing how these requirements affect your contracts and project procedures, contact Kushnick Pallaci PLLC.
This article provides general information based on the law as enacted and reviewed as of September 22, 2026. It is not legal advice for a particular project or employment relationship. Applicable requirements, implementing guidance, and contract terms should be reviewed before action is taken.
