A new New York law imposes prevailing wage requirements on data center construction—and most trades don't realize it applies to them.
Most construction and trades owners in New York haven't heard of S10642, the data center bill signed into law. But buried in it is a provision that will directly affect labor costs for any contractor or subcontractor hired on large data center projects: a mandatory prevailing wage requirement.
Here's what you need to know.
Under the new Labor Law § 224-g (subdivision 2), added by § 10 of S10642, any contractor or subcontractor performing construction or expansion work on a data center with 5 megawatts (MW) or more of peak demand capacity must pay prevailing wages—meaning union-scale wages as determined by the Department of Labor.
This applies to all covered data center construction or expansion commenced after the bill's enactment. The provision took effect immediately upon enactment (§ 12).
If you're in electrical, HVAC, plumbing, carpentry, steel work, or any specialty trade, and you bid on or are hired for work at a data center facility meeting that 5 MW threshold, you're covered. So are general contractors and construction managers overseeing such projects.
The requirement applies whether you're doing new construction or expansion work. It doesn't matter if you're a small firm or large—the rule is the same.
Prevailing wage rates in New York are typically significantly higher than market wages. For example, prevailing wage rates for electricians, carpenters, and other trades often run 50–100% above standard market rates, depending on the trade and region.
This means:
Higher labor costs. Every worker on a covered project must be paid at the prevailing rate, even if your standard crew rates are lower.
Compliance burden. You must track and document prevailing wage payments. Failure to comply triggers enforcement orders and potential debarment under Labor Law § 220-b, which can bar your firm from public and prevailing wage work in the future.
Bid implications. When you bid on data center work, you'll need to factor prevailing wage into your labor costs. Clients expecting market-rate bids may be surprised by the jump.
If you work in construction or trades in New York, review your current and pipeline projects. If any involve data center construction or expansion at a facility with 5 MW or more capacity, assume prevailing wage applies.
Confirm the facility's peak demand capacity with the project owner or general contractor. Understand the prevailing wage rates that apply to your trade in the relevant region—the Department of Labor publishes these rates by trade and county.
Update your estimating templates and bid procedures to account for prevailing wage on covered projects. If you're unsure whether a project is covered, ask the project owner or your labor attorney before bidding.
Source: S10642, New York State; Labor Law § 224-g (subdivision 2); § 10 (page 11); § 12 (effective date).