Effective December 8, 2026, pursuant to the New York Construction Reporting Pay Act, employers in the New York State construction industry will be subjected to new reporting requirements and will be required to pay both union and non-union workers for certain last-minute schedule changes, even when the disruption is caused by weather, failed inspections, material shortages, site-access restrictions, or delays attributable to owners, general contractors, or other trades.
For many contractors, routine decisions that have historically been considered part of construction scheduling risk may now create mandatory wage obligations, prevailing wage compliance concerns, and potential wage-and-hour litigation exposure.
The Two New Payment Obligations
Reporting Pay
When a covered employee reports to work at the employer's request or permission, but receives little or no work, the employer generally must provide guaranteed compensation, as follows:
Public Works Projects
- Minimum payment of four hours
- Paid at the applicable prevailing wage rate, including supplements
Private Construction Projects
- Minimum payment of four hours, or the employee's regularly scheduled shift, whichever is less
- Paid at the employee's promised hourly wage
Shift-Cancellation Pay
When a scheduled shift is canceled with less than 12 hours' notice, employers generally must pay two hours of compensation to the affected employee.
There are no express exceptions for:
- Weather-related shutdowns
- Failed inspections
- Material or equipment shortages
- Site-access restrictions
- Safety shutdowns
- Delays caused by owners, construction managers, or other trades
- Other unforeseen project disruptions
Additionally, if the employer cancels a shift inside the 12-hour window, payment is generally required regardless of the cause of the disruption.
Why Construction Employers Should Pay Attention
The practical impact of the law extends far beyond payroll and creates increased wage-and-hour exposure. For private construction projects, reporting-pay and cancellation-pay obligations are expressly treated as wages under Article 6 of the New York Labor Law. As a result, employees may seek:
- Unpaid wages
- Liquidated damages
- Attorneys' fees
- Class-wide relief in appropriate cases
Because relatively small underpayments can be repeated across large workforces and multiple projects, construction employers should expect increased scrutiny from the plaintiffs' bar.
Additional Public Works Compliance Risks
For public works projects, these payments are treated as prevailing wages or supplements under Article 8. Accordingly:
- Payments must be reflected on certified payroll reports.
- Underpayments may trigger prevailing wage investigations.
- Reporting errors may create additional compliance exposure.
Employers should review all applicable prevailing wage schedules and collective bargaining agreements. Existing prevailing wage reporting-pay provisions may supersede certain statutory reporting-pay obligations if they provide greater benefits, although no similar statutory exception exists for cancellation pay.
Potential Cost-Recovery and Contract Issues
On many projects, the employer responsible for paying reporting or cancellation pay may not be the party responsible for causing the disruption. As a result, owners, construction managers, general contractors, and subcontractors should evaluate:
- Contractual delay provisions
- Contractual force majeure clauses
- Contractual no-damages-for-delay provisions
- Change-order procedures
- Cost-reimbursement mechanisms
- Schedule-notification requirements
- Subcontract risk-allocation language
It is anticipated that disputes may arise when late schedule changes force contractors to incur reporting-pay or cancellation-pay obligations that another project participant caused. Allocating responsibility among various contractors for such obligations via contractual provisions will be challenging.
Six Steps Contractors Should Take Before December 8
1. Determine Coverage
Identify which employees, projects, and entities are covered by the Act, including projects subject to prevailing wage requirements.
2. Formalize Scheduling and Cancellation Procedures
Establish clear responsibility for:
- Scheduling crews
- Monitoring weather and site conditions
- Making go/no-go decisions
- Communicating cancellations
- Documenting delivery of notices
Because liability may turn on timing, employers should maintain timestamped records showing when notices were sent and, where possible, received.
3. Improve Project Communication
Because late information often creates the problem, project managers, superintendents, owners, safety personnel, inspectors, and subcontractors should have a reliable process for communicating about issues such as:
- Failed inspections
- Site-access restrictions
- Delayed deliveries
- Weather concerns
- Safety shutdowns
- Delays by predecessor trades
The earlier that information reaches those responsible for staffing decisions, the easier it will be to avoid triggering payment obligations.
4. Review Contracts and Subcontracts
In addition to assessing how the Act impacts existing construction agreements, parties who are entering into new agreements should consider provisions addressing:
- Shutdown notifications
- Schedule-change responsibilities
- Recovery of reporting-pay and cancellation-pay costs
- Weather-related disruptions
- Owner-directed suspensions
- Delay claims
- Documentation requirements
- Applicable wage-and-hour compliance obligations
5. Update Payroll and Timekeeping Systems
Contractors should create separate payroll codes for both reporting pay and cancellation pay. Payroll systems should be configured to apply the correct rates, to properly reflect payments on wage statements and payroll records, and to ensure accurate treatment for overtime and prevailing wage compliance purposes.
6. Train Project Leadership
Superintendents, forepersons, dispatch personnel, and project managers are often the individuals whose scheduling decisions will trigger liability. Training for these individuals should address common scenarios, including:
- Same-day weather shutdowns
- Material-delivery failures
- Delayed predecessor work
- Failed inspections
- Owner-directed shutdowns
- Last-minute text message cancellations
Bottom Line
The Act shifts a significant portion of construction scheduling risk onto employers. Beginning December 8, 2026, same-day weather calls, delayed starts, failed inspections, and other everyday project disruptions may create mandatory wage obligations even when those events are outside the employer's control. Accordingly, construction employers should use the time before the Act’s effective date to review scheduling practices, payroll systems, certified payroll procedures, collective bargaining obligations, and contract language so they are prepared when the law takes effect.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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