Most employers in the construction industry are aware that under New York State Labor Law, contractors and subcontractors must pay the prevailing rate of wage and supplements (fringe benefits) to all workers under a public work contract. Some are not aware that they must pay the prevailing wage rate set for the locality where the work is performed. Prevailing wage is the pay rate set by law for work on public work projects. This applies to all laborers, workers or mechanics employed under a public work contract. Even in cases where an employer does not regularly engage in public work contracts, each employer is responsible for paying prevailing wages. Contractors may be liable when their subcontractors are not paying prevailing wages. Penalties can be severe, including interest of 16% of unpaid wages and/or penalties of 25% of unpaid wages. In addition, if a violation is adjudicated as “willful” a company and its owner may be placed on a list preventing them from performing public work.