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Six Pertinent Provisions of the OBBBA for Construction Companies

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Nicholas L. Shires, CPA, Dannible & McKee, LLP

The One Big Beautiful Bill Act (OBBBA) introduces sweeping changes with significant implications for construction business owners and their leadership teams. As companies evaluate the legislation, it’s important to focus on the provisions most relevant to day-to-day operations. Here are six key areas to study.

  1. Accounting Exemption

For tax years beginning on or after July 4, 2025, contracts entered into for residential construction projects, per the amended definition under the OBBBA, generally qualify for an exception to the percentage-of-completion method of accounting.

That means, if eligible, you can use the completed-contract method (CCM) or other permissible methods. Under the CCM, for example, you can defer income until a project is substantially completed, which generally improves cash flow.

  1. Accelerated Depreciation

The OBBBA includes multiple provisions that will allow you to accelerate depreciation on eligible capital expenditures. These breaks can also improve cash flow, as well as make new investments in equipment and machinery more viable.

The law makes permanent 100% first-year bonus depreciation for qualified new and used assets acquired and placed in service after January 19, 2025. It also increases the Section 179 expense deduction limit to $2.5 million, with the phaseout threshold raised to $4 million. Those figures are effective for 2025, with annual inflation adjustments going forward.

In addition, the OBBBA creates a temporary 100% deduction for the cost of building “qualified production property” — for instance, facilities used to fabricate materials. This could boost demand for projects related to manufacturing. Construction must have begun after January 19, 2025, and before January 1, 2029, and the property must be placed in service before 2031.

  1. Bigger Business Interest Deductions

If you finance capital purchases, you may be able to deduct more of the interest under the OBBBA. The business interest deduction is generally limited to 30% of your adjusted tax income (ATI). Since 2022, though, deductions for depreciation, amortization or depletion were not added back to taxable income when calculating ATI. So, ATI was effectively measured based on earnings before interest and taxes, not earnings before interest, taxes, depreciation and amortization (EBITDA).

Beginning with the 2025 tax year, the OBBBA provides that ATI will again include depreciation, amortization and depletion in the calculation. In other words, ATI will revert to being calculated based on EBITDA. This will effectively increase the ATI base, generally raising the allowable business interest deduction.

  1. Distressed Community Construction Incentives

The quality opportunity zone (QOZ) program generally allows taxpayers to defer, reduce or exclude unrealized capital gains reinvested in qualified opportunity funds (QOFs). These funds invest in designated distressed communities across the country.

The OBBBA establishes a permanent QOZ policy that enhances the original program, which had been slated to sunset after 2026. The law also creates a new type of QOF for rural areas. Plus, the OBBBA permanently enhances the low-income housing tax credit. In sum, these programs could drive higher construction activity — including affordable housing and commercial development.

  1. Reduced Taxation of Overtime

For tax years 2025 through 2028, the OBBBA allows employees to deduct up to $12,500 ($25,000 for joint filers) of qualified overtime pay. This tax break is available regardless of whether a taxpayer itemizes. However, it begins to phase out when an individual’s modified adjusted gross income exceeds $150,000 (or $300,000 for joint filers).

The boost to take-home pay may make overtime more enticing to existing construction workers and job seekers considering the industry. But it also requires employers to track and report the amount of qualified overtime pay. What’s more, overtime pay will remain subject to payroll taxes and state income taxes.

  1. Elimination of Clean Energy Incentives

The OBBBA targets many of the clean energy incentives created or enhanced by the Inflation Reduction Act — including some that have spurred construction plans and projects. For instance, it eliminates the Sec. 179D energy-efficient commercial building deduction for buildings or systems on which construction begins after June 30, 2026.

The new law also eliminates the Sec. 45L new energy-efficient home credit for eligible contractors. The credit was due to expire in 2033, but it’s now available only for homes acquired on or before June 30, 2026.

And That’s Not All

The provisions highlighted here are only a portion of the changes in the OBBBA that could impact your construction business. Acting now is critical to identify the most relevant tax-law changes and take full advantage of the tax breaks available before opportunities are missed.

Nicholas L. Shires, CPA, is the partner-in-charge of tax services at Dannible & McKee, LLP, a certified public accounting firm with offices in Syracuse, Auburn, Binghamton and Schenectady, NY, as well as Tampa, FL. With over 20 years of experience, Nick provides tax and consulting services to a wide range of clients, with a focus on the construction industry. For questions regarding the tax provisions of the One Big Beautiful Bill Act (OBBBA), contact Nick at nshires@dmcpas.com or (315) 472-9127. Learn more @ DMCPAS.com.

2025 Year in Review

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Earl R. Hall Executive Director – Syracuse Builders Exchange

As the fourth quarter of the year begins, we at the Syracuse Builders Exchange (SBE) reflect on the success of the past 12 months, as we begin to focus on 2026 with optimism and excitement.

The past year marked another period of record growth and achievement for SBE and our members. Guided by our mission to acquire and disseminate important industry information, further the best interest of the regional building and construction industry, and to foster and develop relationships within the industry, SBE delivered measurable value across our wide range of membership benefits and services throughout the year.

Acquiring and Disseminating Information

Through Syrabex’s e-plan room, weekly e-bulletins, periodic emails, and Construction Contractor Magazine, SBE acquired and disseminated timely and important information construction industry employers and their employees rely upon every day.  Whether it’s construction projects in the planning stages, projects actively bidding, bidders lists, contract awards, new federal or state legislation, information from our many professional partners or other information contractors need to know, SBE delivered using a wide range of communication mediums.

Education and Safety Training

SBE’s education and safety training programs reached both record participation and course offerings, equipping members with the skills and knowledge to navigate evolving industry technologies such as Building Information Modeling, safety standards, and general business practices. The Association delivered workshops, seminars, and certifications that not only advanced individual careers but helped employers provide a safer and more efficient working environment both on the job site and in the office.

Safety remained a top priority, with new training modules, additional training resources and instructors, and industry-wide campaigns designed to reduce incident rates for our member firms and the industry in general. These efforts underscored SBE’s commitment to not only our member employers, but ensuring every worker returns home safely at the end of the day.

Membership Growth and Engagement

Membership significantly expanded this past year, led by the migration of 100 new members from the Mohawk Valley Builders Exchange.  Absent those new members, SBE still experienced membership growth, driven by out-of-area contractors looking to take advantage of the Association’s services and the abundance of future construction opportunities central New York will offer over the next decade.

Sustained membership growth reflects the value of SBE’s services, the strength of our membership and the tremendous services our staff delivers every day to our member employers and their employees. Engagement through events, emails, phone calls, and electronic/digital platforms fostered stronger business relationships between our staff and members.

Today, SBE remains New York State’s oldest and largest construction industry Association with approximately1,070 member firms.  Never in the 153-year history of the Association has SBE had more members or more benefits and services.

Networking and Social Event

During the year, SBE provided the most networking and social events in the history of the Association, delivering:

  • Multiple “meet and greets” in the Utica region
  • Two sold-out golf tournaments (Syracuse and Utica)
  • Clay Sport Shooting for Charity
  • Meet the Generals
  • Clambake
  • Meet the MWBE/DBE/SDVO Contractors
  • Cabin Fever (Utica)
  • Two Construction Career Day events (Syracuse and Utica)

These events are vital to SBE’s membership as they strengthen professional relationships, foster collaboration, and create opportunities for members to share knowledge and best practices. These gatherings help connect contractors, suppliers, designers, and industry leaders, often leading to new business partnerships and project opportunities. They also build a sense of community within the industry, allowing members to exchange ideas, discuss challenges, and celebrate achievements together. Ultimately, SBE’s networking and social events enhance the value of one’s membership by promoting growth, visibility, and long-term success for both individuals and companies.

Looking Ahead to 2026

As SBE celebrates this year’s successes, we remain focused on future opportunities and challenges. Our priorities include partnering and collaborating with industry partners to advance workforce development initiatives, embracing technology innovation and new industry standards in our education and safety programs, enhancing the functionality within the e-plan room by applying Artificial Intelligence features to deliver faster and more effective outcomes for our end-users, delivering quality social and networking events, promoting New York State’s only construction industry Multiple Employer Pension Plan (MEP) and continuing to be a strong advocate for SBE’s member employers and the industry.

SBE continues to have a meaningful impact on our contractors, their employees, and our regional community and industry partners.  As we look forward to building on this momentum in 2026, we are reminded that the success of the Association is the result of our loyal, diverse, and dedicated member firms.  On behalf of the SBE staff and Board of Directors, it has been a pleasure to service construction industry employers and their employees during the year.  

Benefits of Content Marketing

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Increased Brand Awareness

Consistently publishing valuable and relevant content helps to increase visibility. As your content reaches a larger audience, more people become familiar with your brand.

Establishes Authority and Expertise

By providing high-quality, informative content, you position your business as an authority in your field. This helps build trust and credibility with your audience.

Improved SEO and Organic Reach

Quality content that is optimized for search engines (SEO) can help your website rank higher on search engine results pages (SERPs). This boosts your organic traffic.

Engagement with Audience

Content marketing encourages interaction with your audience, whether through comments, shares, or likes. This helps in building a community around your brand.

Lead Generation

Well-crafted content can help attract potential customers and drive them down the sales funnel. Offering valuable content, like whitepapers or ebooks, in exchange for email subscriptions can be an effective way to gather leads.

Cost-Effective Marketing

Compared to traditional forms of advertising, content marketing can be a more affordable long-term strategy. Once content is created, it can continue to generate value over time without ongoing costs.

Better Customer Relationships

Content allows you to directly communicate with your audience, answer their questions, and address their pain points. This strengthens customer loyalty and satisfaction.

Supports Other Marketing Channels

Content marketing supports various other marketing efforts, like printed media, social media, email marketing, and paid ads. For example, blog posts can be shared on social media, driving traffic to your website.

Increased Conversion Rates

Engaging and relevant content can help move prospects closer to conversion by addressing their specific needs and demonstrating how your products or services can solve their problems.

Long-Term Results

Content that continues to provide  value can work for you over time, generating leads and traffic long after it’s published. Blog posts, videos, and infographics can attract new audiences months or even years after they’re created.

Builds Trust and Relationships

By offering useful, honest, and relevant information, your brand can build long-lasting relationships with its audience. This trust can eventually convert into higher customer loyalty and advocacy

In summary, content marketing helps you build stronger relationships with your audience, boosts your printed and online visibility, and can be more cost-effective than traditional advertising, all while providing long-term benefits.

Patriot Sons USA: A Certified SDVOB, Providing Experienced Asbestos Abatement

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By Elizabeth Landry

Frederick W. Dambach, President and CEO of Patriot Sons USA, has spent a lifetime in service—first to his country, and now to the health and safety of our communities. A U.S. Army veteran who served during both the Vietnam War and Operation Desert Storm, Dambach comes from a proud military family with deep-rooted traditions of service. His father served in World War II, and many of his siblings, cousins, and even his son have followed similar paths.

Throughout his civilian career, Dambach held a diverse range of roles—from working in power plants and building submarines to managing an electrical supply branch, selling computers, and serving as a high-voltage lineman. But it wasn’t until 2015, encouraged by his son, that he charted a new course. He enrolled in the Entrepreneur Bootcamp for Veterans (EBV) at Syracuse University, and in 2019, he founded Patriot Sons USA—a company focused on asbestos abatement and environmental remediation.

Drawing from firsthand experience with asbestos exposure during his early career, Dambach developed a passion for addressing the long-term health and environmental consequences of hazardous materials.

“Back then, we didn’t know the dangers. We worked with asbestos without any protection,” he recalled. “Now, I’ve become educated on the risks—and that knowledge drives our mission every day.”

Today, Patriot Sons USA is a federally registered and New York State-certified Service-Disabled Veteran-Owned Business (SDVOB) offering asbestos abatement, mold and lead remediation, and industrial cleaning services. The company plays a vital role on construction sites, often serving as the first team onsite to create safe working conditions for other trades by removing hazardous materials like asbestos, tile flooring, pipe insulation, or even biological contaminants such as pigeon guano.

“We’re in the business of cleaning up dangerous situations,” says Dambach. “Whether it’s abatement in a commercial building or an environmental hazard at a military facility, safety always comes first.”

Though the early years required persistence and patience, the company has seen significant growth in recent years, securing larger contracts across New York State—from Buffalo to Queens. Dambach credits this momentum to an expanding team of skilled professionals and a shared commitment to excellence.

“We’ve brought on some key full-time team members, including a project manager with over 20 years of experience,” Dambach shared. “And I’ve learned a lot from my son. The student has truly become the teacher.”

Patriot Sons USA may still be a young company in the broader construction contracting space, but its mission is grounded in discipline, integrity, and a genuine desire to serve—principles rooted in Dambach’s military background.

“We started out wanting to serve the VA and fellow veterans. That mission has evolved, but our values haven’t. We take pride in our work, prioritize safety, and don’t cut corners. We’re Patriot Sons for a reason—we aim to lead by example.”

Looking ahead, Dambach envisions the company expanding into emergency response services and broadening hazardous material cleanup efforts. More importantly, he hopes Patriot Sons USA will be a family legacy—continued by his children and grandchildren with the same purpose and pride.

“At the end of the day, it’s not just about profit,” he reflected. “It’s about doing work that matters—leaving a legacy of impact, honor, and purpose. In the military, you’re given a mission. In the private sector, you create your own. This is mine, and it feels right.”

From all of us at CNY Publications, Construction Contractor Magazine, and the Syracuse Builders Exchange, we extend our deepest gratitude to Fred Dambach and his family for their continued service—to our country, our industry, and our community.

 

Nexus Requires Compliance and Begins by Filing Tax Returns

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Shawn T. Layo, CPA, Dannible & McKee, LLP

“Nexus” is a Latin term that refers to the relationship of a taxing jurisdiction that enables it to subject your business to taxation. In addition to your business’s home state and city, other states and local jurisdictions where you conduct business can have nexus.

Traditionally, nexus was determined by a physical presence such as a branch office or construction location, but e-commerce has extended the definition of nexus. Today, having employees, equipment or even significant sales activity in another state could establish nexus, and with it, a requirement to file tax returns and potentially pay taxes.

Sales Tax Nexus

Sales tax nexus laws vary widely by state and can be triggered by seemingly small activities. For example, if you have an employee in a new state or buy some machinery there, that alone can subject you to sales tax. While these activities may mandate a contractor to file sales tax returns in that jurisdiction, that does not mean the company will owe taxes there. So, it is imperative that you are aware of the administrative burdens of entering new jurisdictions, as non-compliance can be costly. The same state can also have different standards for different taxes, such as income and sales tax.

Construction companies often must collect and remit sales tax on the total charge to the customer for any repair, maintenance and installation services provided. If taxes are not collected and paid, your business will be liable and could face penalties and interest. Many businesses go bankrupt due to unpaid sales taxes and the compounding penalties that follow. Just because a job is small or out of state doesn’t mean it escapes scrutiny.

Income/Franchise Tax

You already file income or franchise taxes in the state and jurisdiction where your company is based. However, if you operate in multiple states through offices, warehouses or employees traveling into another state or generating meaningful sales there, you may need to file tax returns in those states.

It’s critical to stay up to date on filing income/franchise tax returns in all appropriate jurisdictions. If your business ever has to bring a lawsuit in that state, your company must be qualified to do business there as a foreign corporation and filing tax returns supports this qualification. Most states require minimal paperwork and often a certificate of good standing from your home state to register to do business in another state. Your attorney can help you with filings and compliance issues.

When doing business in multiple states, it is imperative to know how each state computes and allocates its overall net income and, subsequently, how that net income is taxed. If you generated $1M of income in a year, but half your sales are attributable to State A and the other half are attributable to State B, does each state tax $500k? Potentially, each state has different rules for computing and allocating income. You may need to track revenue on a job-by-job, state-by-state basis and track the equipment and labor employed in each. How to do this depends on how each state allocates their income and whether they factor in sales, wages and/or property employed in and out of the state.

Voluntary Disclosure Programs

If you find that your construction business has not been properly filing sales or income/franchise taxes, you will likely be liable for back taxes, penalties and interest in each state and/or jurisdiction. A positive note is that the statute of limitations is set at three years after filing, after which the taxing authority can’t audit your return.

If you realize after the fact that you should have filed in a tax jurisdiction but did not talk to your tax consultant about filing an amended return, you may also be liable for back taxes, penalties and interest. However, many states have “voluntary disclosure” programs that encourage businesses to catch up by filing outstanding or amended returns. In many cases, penalties are waived, and payment terms can be very favorable. Keep in mind that it is better to voluntarily come forward than to be found out by the taxing authority. If you have any questions about nexus and what it may mean for your business, please contact us.

Shawn T. Layo, CPA, is a tax partner at Dannible & McKee, LLP, a certified public accounting firm with offices in Syracuse, Auburn, Binghamton and Schenectady, NY, as well as Tampa, FL. With more than 24 years of experience, Shawn specializes in providing tax planning and compliance services for a variety of clientele with a focus on construction, architectural and engineering, multi-state corporations and high-net-worth individuals. For more information on this topic, contact Shawn at slayo@dmcpas.com or (315) 472-9127. Visit our website at DMCPAS.com to learn more.

2024 NY Workers’ Comp Bills: What Construction Companies Need to Know

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The Lovell Safety Management Executive Team

In 2024, the New York State Legislature passed four workers’ compensation bills that could reshape how claims are managed. Two of these bills were signed into law by Governor Hochul, and two were vetoed. Construction companies, which already operate in high-risk environments, should pay close attention to these changes, especially as they affect claim costs, mental health claims, and treatment protocols.

1.Signed into Law: Limited Mental Stress Claims Expansion (A.5745/S.6635, amended by A.1677/S.0755)

Governor Hochul signed this bill on December 6, 2024, with chapter amendments finalized in January 2025. It expands eligibility for workers’ compensation mental stress claims but only for specific psychiatric diagnoses.

What Changed?
Previously, only police officers, firefighters, and EMTs could file mental injury claims without showing their stress was “greater than” that of a similar coworker. Now, all employees, including those in construction, will be eligible to file a mental stress claim (only in mental-mental injury claims)—as long as their diagnosis fits into one of three psychiatric conditions:

• Post-Traumatic Stress Disorder (PTSD)

• Acute Stress Disorder

• Major Depressive Disorder

To qualify for benefits the employee must prove that:

• The stress arose out of an extraordinary work-related stress that is attributable to a distinct work-related event or series of events that are:

• Directly related to employment and

• Occurring during the performance of the employee’s work duties

Impact on Construction
Construction workers frequently face traumatic events: serious injuries, falls from heights, or fatal accidents. This new law may increase:

• Claims related to mental health after job site incidents.

• Challenges in disputing those claims due to the now-subjective stress threshold.

• Length and complexity of claims, potentially delaying return-to-work timelines.

Recommendation: Immediately investigate and report mental stress claims to Lovell. The new standard applies to specific mental claims and the old standard of the “stress being greater than that of a similar worker” remains in effect for other types of mental stress claims. Legal counsel at Lovell/NYSIF will determine which standard is applicable based on the facts of the case. Train field supervisors to document traumatic events with pertinent information. Strengthen mental health resources for workers and ensure HR is prepared to handle these claims sensitively but rigorously.

2. Signed into Law: Occupational Therapy & Physical Therapy Assistants Now Allowed to Treat Claimants Governor Hochul signed this long-standing bill on September 27, 2024. It authorizes licensed occupational and physical therapy assistants to treat injured workers under supervision of licensed physical therapists and occupational therapists.

What Changed?
Previously, New York law only allowed licensed OT/PT providers to treat injured workers. This bill now permits OT/PT assistants to perform treatment, so long as they work under the supervision of an authorized OT/PT.

Impact on Construction
Many injured construction workers need some form of physical rehabilitation. This change:

• Should improve therapy accessibility.

• Is not expected to increase claim costs significantly, as assistants are already commonly used in comp cases.

3. Vetoed: Out-of-Network Pharmacy Access (A.1219-A/S.1974-A)

This bill would have allowed injured workers to bypass the employer’s designated pharmacy network under certain conditions. Governor Hochul vetoed the bill on December 13, 2024.

Why Was It Vetoed?
The Governor cited:
• Increased litigation over “qualifying” conditions.

• Delays in benefit delivery due to added bureaucracy.

• A rollback of pharmacy cost savings won in the 2007 comp reforms.

Some examples that would have allowed workers to use non-network pharmacies included:

• Delays of more than 72 hours in receiving prescribed meds.

• Denial of reauthorization requests.

• Disputes between treating physicians and IMEs.

Instead of the bill, the Workers’ Compensation Board (WCB) issued new regulations, clarifying when a worker may use a non-network pharmacy at the end of 2024, providing a 60-day comment period and then based on comments, finalization of the new regulations.

Impact on Construction
The veto preserves critical cost controls for employers and carriers. Most construction employers in a Lovell Safety Group will not see major changes as NYSIF already provides first-fill prescriptions pending establishment or acceptance of the claim.

4. Vetoed: Medical Treatment Guidelines Rollback (A.6832-A/S.6929)

This bill was vetoed on November 22, 2024, and would have fundamentally altered how treatment is approved in NY workers’ comp.

What the Bill Would Have Done
• Undermined the Medical Treatment Guidelines (MTGs) by letting providers bypass them.

• Eliminated the Prior Authorization Request (PAR) process.

• Forced carriers to rely on costly Independent Medical Exams (IMEs) for treatment reviews which may delay treatments.

Why It Was Vetoed?
Governor Hochul argued the bill would:

• Lead to over-treatment and questionable procedures.

• Increase litigation and delay care.

• Undo years of reform aimed at improving outcomes and lowering costs.

Impact on Construction
The veto protects construction employers from:

• Skyrocketing treatment costs.

• Legal disputes over unnecessary
or non-evidence-based care.

• System abuse seen prior to MTG
and PAR implementation.

Bottom Line for Construction Employers

The 2024 legislative session brought both relief and risk for New York construction firms in 2025. While some protections were preserved through vetoes, the signed mental stress bill opens the door to more complex, subjective claims.

Key Takeaways:
• Expect more mental stress claims tied to specific traumatic events, especially after serious job site incidents.

• OT/PT assistants can now legally assist in the treatment of injured workers, potentially speeding up recovery.

• Pharmacy access rules are evolving but the cost-saving structure remains in place for now.

• The veto of Medical Treatment Guidelines (MTG) rollbacks is a win for employers concerned about runaway treatment costs.

The Governor also passed two workers’ compensation bills in her Budget that would expand access to treatment. Those bills will allow for residents and fellow physicians in a Graduate Medical Program to treat claimants and permit carriers to pay for medical treatment pending a decision on compensability. 

Lovell Safety Management closely monitors legislative developments, actively working to reduce the impact of potential negative changes on the members of our five construction and eight general industry workers’ compensation safety groups. Our programs are designed to return profits to members in the form of dividends, and to date, Lovell safety group members have received over $1.28 billion in dividend savings. The 2025 legislative session closed in mid-June, and we will provide a full update on any new developments or additional legislative changes in early 2026.

In summary, the 2024 legislative session brought both relief and risk for New York construction firms in 2025. While some protections were preserved through vetoes, the signed mental stress bill opens the door to more complex, subjective claims. For any questions regarding workers’ compensation and the legislation, please contact Lovell at 1-800-556-8355.

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NYS 2025 Workers’Compensation Updates

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Brett Findlay, Vice President, Business Risk Specialist, OneGroup

 Overview of 2025 Workers’ Compensation Changes in New York State
New York State continues to see positive trends in workers’ compensation. For the tenth year in a row, an aggregate rate decrease is expected. Additionally, the New York State Assessment dropped again in January 2025. With these encouraging trends setting the tone for 2025, let’s take a closer look at the specific updates to workers’ compensation rates and assessments that could impact employers across New York State.

Upcoming Rate Reduction
On May 8, 2025, the Board of Governors for the New York Compensation Insurance Rating Board (NYCIRB) announced they voted to file their annual loss cost indication with the New York State Department of Financial Services. This filing, once reviewed and approved, will take effect on October 1, 2025.

The proposed change reflects a 13.2% average decrease in the overall loss cost (or rate) level. This figure is based on NYCIRB’s standard ratemaking methodology and applies to policies renewing on or after the effective date.

However, this 13.2% reduction is an aggregate average—the actual impact will vary depending on the classification codes used in your policy. Some businesses may see more significant savings, while others may experience smaller changes or even increases depending on their specific risk profile and claims history.
The workers’ compensation market remains soft overall, but volatility continues due to the experience modification rating (EMR) formula changes introduced in 2022. These changes can significantly affect individual policy premiums, especially for businesses with fluctuating claims experience.

If you have questions about how these changes might affect your policy or renewal timeline, consider reaching out to OneGroup and see if they can help you review your coverage and workers’ compensation plan.

Policy Timing and Planning
These rate changes only apply to policies renewing on or after October 1, 2025. If your policy renews before then, the new rates won’t apply until your next renewal. It’s a good idea to review your classifications now to better forecast future costs.

New York State Assessment Decrease
In January 2025, the New York State Assessment rate dropped from 9.2% to 7.1%, marking the largest single-year reduction in several years. This assessment is a mandatory surcharge applied to all workers’ compensation policies in New York to fund the state’s Workers’ Compensation Board and related programs.

This latest decrease continues a multi-year trend of declining assessment rates:

• 2021: 11.8%
• 2022: 10.2%
• 2023: 9.8%
• 2024: 9.2%
• 2025: 7.1%

Since 2021, the assessment rate has dropped by nearly 40%, resulting in a cumulative reduction of almost 20% in aggregate costs to policyholders. This trend reflects improved system efficiency and reduced administrative costs at the state level.

For employers, this means lower overall premium costs, even before factoring in the upcoming rate reductions. However, the actual savings will depend on your total payroll, classification codes, and claims history.

If you’re unsure how this impacts your current or future premiums, contact us we can help you analyze your policy and identify opportunities for savings.

What This Means for Contractors
These changes can significantly impact your insurance costs. For personalized guidance, reach out to OneGroup’s team of specialists dedicated to risk management and construction industry insurance.

For more information on renewing your insurance, you may reach out to Brett Findlay at 315-280-6376 or by email at BFindlay@OneGroup.com

If You Work On Both Public And Private Projects, You Must Understand The Concept Of Annualization.

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By Gabrielle Kehoe, Sheats and Bailey, PLLC

As you all know, if you work on public projects, either New York or Federal, you must pay prevailing wages.  The prevailing wage rate is based on geography and classification of the work being performed.  Prevailing wages consist of two things: hourly wages and supplemental (or fringe benefit) wages.  The former is the wage paid to the employee in his/her check and supplemental wages are meant to represent the hourly value of benefits like health insurance, retirement contributions or paid time off.

Supplemental wages, what counts?

If your company contributes to a retirement plan, provides health insurance, disability insurance, sick leave or vacation pay, training or apprenticeship programs, or more, those qualify as supplemental benefits or “bona fide” benefit contributions.  However, statutorily required payments such as social security, workers’ compensation, or reimbursements for travel expenses are not included in fringe benefits.

What weight do these benefits bear on prevailing wages?

Under both New York and federal law, contributions to bona fide benefits can offset the prevailing wage’s supplemental wage allocation.  If your company contributes to a bona fide benefits plan, you can deduct these contributions from that supplemental wage allocation.  However, New York and federal projects differ on how to calculate these contribution deductions.

New York’s calculation

Under New York’s Labor Law, annualization is used to calculate deductions. Annualization requires that all qualifying benefits paid to an employee to be identified and totaled for the year.  Then, that total must be divided by the total hours the employee worked on both public and private projects. Once that is calculated, the hourly rate for the annual bona fide benefits paid to an employee is found.  This number should be compared to the supplemental fringe benefits set on the prevailing wage schedule, and the difference between the two must be paid weekly to the employee.

For example: Let’s say the total annual contributions to a bona fide benefits plan for one employee equals $10,000 and that employee worked full time on both public and private projects for a total of 2,080 hours.  Meaning, there was $4.80 paid ($10,000/2080 hrs) to that employee in fringe benefits every hour on top of their hourly rate over the past year.  Now consider that the hourly supplemental benefit rate is $39.80 on top of the basic hourly wage rate.  Only $35.00 needs to be paid on top of the basic hourly wage to satisfy the prevailing wage rate.

Federal calculations

Federal law differs from New York in that there are two different ways to calculate supplemental wage deductions.  The choice between the two relies on whether the employee has immediate eligibility (or are expected to become eligible) and immediate 100% vesting (i.e., there are no conditions to be satisfied to receive the contributions to the plans) of the prevailing wage contributions for their bona fide benefit plans or if the employee has not yet and is not expected to qualify for the plans due to being a member of an excluded class.

First is the dollar-for-dollar method. This method can be used toward fringe benefit obligations for contributions to eligible retirement plans.  To be eligible the retirement plan must require that the employee be immediately eligible for the plan and 100% vesting (i.e., has complete ownership) of the plan contributions.  This formula excludes hours worked on non-governmental or ineligible projects. This method allows full credit for the amount of contributions made on Davis-Bacon Work.

For example: an employee worked 1,000 hours on Davis-Bacon projects and the fringe benefit rate is $10 an hour for the year.  The employer contributes $7.00 an hour to a fully vested, immediately eligible retirement plan for an employee working on a Davis-Bacon project, the employer can then credit the full $7.00/hour or $7,000.00 a year toward their fringe benefit obligation. Please note this dollar-for-dollar method cannot be used when calculating a credit on fringe benefits for NYS prevailing wage projects.

Second, like New York, the annualization method is used when an employee does not have immediate or expected eligibility to the bona fide benefits plan.  This formula allows for all hours worked on both eligible government projects to be balanced against the total hours worked on ineligible projects.

This will look like New York’s annualization calculation from the previous section.

How can fringe benefits be paid to laborers?

Under New York and federal law, these benefits can either be paid in weekly cash wages, or on a bona fide benefits plan, such as a retirement account.  However, those who work both State and Federal Jobs need to make sure they do not apply the dollar-for-dollar federal method when determining contribution credits on New York prevailing wage jobs.  The dollar-for-dollar method can only be applied to federal projects, and New York only uses the annualization method to calculate prevailing wages.  Misapplying the dollar-to-dollar method on New York jobs can lead to underpayment of fringe benefits and result in a DOL audit and costly fines. 

The information provided in this article is not intended to serve as specific legal advice for any particular situation. Competent legal and experienced counsel should be consulted.

 

Gato Flooring:Comprehensive Solutions for Flooring, Walls, and Windows

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By Martha Conway

Sofia Gato’s journey in the flooring industry began when she arrived in the United States from Portugal and took a position as an administrative assistant at a flooring company. What started as a job soon became a passion, igniting her ambition to build something of her own. Fourteen years later, Gato Flooring, LLC, stands as a testament to her vision – a certified Woman-owned Business Enterprise that transcends the role of a typical contractor. It is a company built on expertise, reliability, and an unwavering commitment to excellence. Today, Gato Flooring serves a diverse clientele, including educational institutions, municipal buildings, healthcare facilities, commercial kitchens, laboratories, and other specialized spaces across New York state and the greater Tampa Bay Area.

 

“Our team is very strong and knowledgeable,” Gato said. “We’re not just installers; we’re problem-solvers. Whether a client needs a complete buildout or simply the right materials for their project, we deliver solutions tailored to their needs.”

 

With extensive experience in new construction and renovations, Gato Flooring offers full installation services while also acting as a trusted supplier of materials for contractors. This dual capability allows the company to adapt to a wide range of project demands, ensuring clients receive precisely what they require, executed with precision and care.

Gato’s philosophy centers on doing the job right the first time.

“We want potential customers to understand that we pour effort into every installation to ensure there are no callbacks, no punch lists, no lingering issues,” she explains. “That’s our primary objective. We’re meticulous – some might even say overly particular – because quality matters.”

This dedication has earned Gato Flooring a reputation for reliability and attention to detail, qualities that resonate with clients who value durability and performance in their built environments.

Flooring Design: Balancing Purpose and Aesthetics

When it comes to flooring, Gato stresses the importance of aligning design with functionality.

“Before making decisions about flooring, walls, or window treatments, clients must first consider the purpose of the space,” she said. “That’s the cornerstone. Too often, aesthetic is prioritized – beautiful designs that catch the eye – but if they don’t serve the 

space’s practical needs, they’re doomed to fail.”

This pragmatic approach ensures every project delivers not only visual appeal, but also long-term utility.

Gato Flooring offers an extensive array of flooring options to accommodate a wide range of needs in diverse building environments. Beyond conventional carpet and tile, the company provides specialized solutions: acoustic flooring for sound-sensitive environments, artificial turf for recreational spaces, concrete and engineered wood for durability, and polished concrete or quartz for a sleek, modern finish. For fitness centers or indoor sports facilities, Gato Flooring supplies resilient surfaces designed to withstand heavy use.

“We have something for every need,” Gato said, emphasizing the versatility of her offerings.

In addition to flooring materials, Gato Flooring provides essential interior accessories – wall base, trim, adhesives, cleaners, and transition pieces – to ensure seamless integration and a polished final result. This comprehensive approach simplifies the process for clients, offering everything they need under one roof.

Specialized Wall Solutions: Engineered for Performance

Gato Flooring’s expertise extends beyond floors to include advanced wall solutions tailored to highly specialized environments. The company specializes in hygienic PVC wall cladding, a critical component for spaces requiring sterile or seamless conditions, such as laboratories, healthcare facilities, and commercial kitchens.

“Our team is certified to install these walls with major manufacturers such as Altro and Gerflor,” Gato said. “These walls aren’t like standard drywall or fiberglass-reinforced panels. They’re purpose-built materials, engineered to meet stringent hygiene and durability standards.” Unlike traditional finishes, hygienic cladding resists impact, inhibits bacterial growth, and maintains integrity in high-moisture or high-traffic areas.

For clients undertaking combined flooring and wall projects, integrating these systems streamlines construction and enhances functionality. The compatibility of flooring and wall materials allows for a unified installation process, reducing seams and potential weak points. It also eliminates the problems associated with trying to retrofit these systems after the fact.

Beyond functionality, Gato Flooring offers customizable wall panels that blend practicality with creativity.

“We can reproduce custom images or artwork onto durable panels,” Gato said. “These are vibrant, long-lasting designs available in various formats to suit specific client needs.”

This option appeals to businesses or institutions aiming to make a statement using their branded graphics in a corporate lobby or educational institutions using murals in a school, while ensuring the robustness required for commercial use.

Window Treatments: Enhancing Efficiency and Style

The scope of Gato Flooring’s expertise doesn’t end with floors and walls; the company also provides premium window treatments that elevate function, form, durability, and beauty. Offerings include blinds, shades, drapes, and shutters, each designed to optimize light control, reduce energy costs, and enhance privacy.

“These aren’t just decorative,” Gato emphasizes. “They’re engineered to manage heat, glare, privacy, and insulation, all while complementing the space’s unique aesthetic.”

Available in a wide range of styles and materials, these treatments cater to diverse tastes, from minimalist designs to bold, statement-making installations. This holistic approach – addressing floors, walls, and windows simultaneously – positions Gato Flooring as a one-stop solution provider, capable of transforming entire interiors with cohesive, high-quality professional results.

Floor Preparation: The Foundation of Success

A successful flooring installation hinges on meticulous subfloor preparation, an area where Gato Flooring possesses unparalleled proficiency. The business invests in state-of-the-art materials, tools, and equipment to assess, prepare or repair subfloors, addressing issues such as cracks, unevenness, or moisture infiltration before installation begins. The preparation process may involve cleaning, leveling, grinding, sealing, or replacing plywood to meet manufacturer specifications. Moisture, in particular, poses a persistent threat; undetected during installation, it can lead to significant damage later. Gato Flooring mitigates this risk through rigorous inspection, testing, and remediation to ensure a stable, durable base.

“Our goal is a flawless foundation,” she said. “That’s what guarantees longevity.”

Commitment to Excellence

At the heart of Gato Flooring’s operations is a dedication to exceeding customer expectations.

“We have an excellent, professional and well-trained team to ensure project success and consistent, top-tier results,” Gato said, explaining that this commitment to pursuing perfection often manifests in added value for clients. “It’s our way of showing we care about their experience and the outcome.”

In addition to being a certified New York State Woman-owned Business Enterprise, Gato Flooring is a certified WBE with the Port Authority of New York and New Jersey, as well as a certified Disadvantaged Business Enterprise.

Headquartered at 839 Broad St., Suite 2, Utica, and with a second location in Tampa, Fla., at 8270 Woodland Center Blvd., Suite 101, Gato Flooring serves all of New York state and the Tampa Bay region. Offices are open from 7 a.m. to 4 p.m.

“Though the company focuses exclusively on commercial projects, walk-ins are welcome,” Gato said.

For more information, visit gatoflooring.com or call 315.790.5508.

Lien Law Trusts:  More Value Than A Mechanic’s Lien?

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Lien Law Trusts can be more powerful than a mechanic’s lien and can help you get paid when you take on a construction project.  When a contractor doesn’t get paid, one of the first things they can do is get a mechanic’s lien in place.  A lien can be a valuable tool to enforce the right to get paid.  However, a mechanic’s lien can come with a minefield of problems and expenses.  An alternative for companies to consider is Lien Law Trusts.  

In common law, a trust is created when one party seeks to protect assets.  A parent might set up a trust for their child.  The parent is the grantor and the child is the beneficiary.  The parent might designate an attorney, bank or some other representative to manage the trust. 

A trustee is charged with legal responsibility for taking care of the beneficiary, which is a duty of trust and fidelity.  Their motive must always be in the best interests of the beneficiary, not themselves.  If they take money from the trust, they are responsible, and in some cases can be charged with larceny under the Penal Law. 

This concept of a trust between a trustee and beneficiary applies to construction projects in New York.  In NY, a contractor that receives payment on a project becomes trustee of those funds.  As a trustee, the contractor must apply the trust fund assets for the trust purposes before the contractor applies the money to its own overhead or profit.  Trust purposes include payment of subcontractors, vendors, and labor.  If the trustee/contractor uses trust funds for some purpose other than the payment of trust fund obligations, then the contractor may have diverted trust funds. 

A diversion of trust funds can carry serious legal implications, like personal liability for the individuals that were knowingly diverting trust funds.  The corporate form does not protect these individuals from personal liability.  Strong public policy reasons encourage the liability of corporate principals and officers who knowingly and willfully participate in the diversion.  They have taken money that belongs to another and spent it in violation of the trust.  A diversion of trust assets can be a criminal larceny.  A diversion of trust assets can be criminal because the diverting trustee has taken funds which are not its property and applied them for some purpose other than those defined by statute.  

The New York trust fund statutes permit an unpaid beneficiary to demand a complete accounting from its trustee.  The accounting must be verified under oath, and provide a detailed analysis of all trust fund assets received by the general contractor.  The accounting will include a detailed check-by-check analysis of all payments made with trust fund assets.  They require that each check be identified, together with the check number, date, payee and payee’s address. 

Discovery in trust fund litigation should include a complete report from the contractor’s cost accounting system.  These are programs where contractors enter all costs assessed against a project.  Cost accounting programs will show labor dollars paid, materials purchased and application of project funds to overhead.  Overhead may include a contractor’s general conditions such as the project site trailer, site storage facilities, vehicles dedicated to the site and project manager.  Remember that a trustee must first apply trust funds for payment of the beneficiaries.  A trustee which takes trust assets to pay its overhead or profit may be diverting trust assets.  The information contained in a complete job cost accounting report can be beneficial to the subcontractor or vendor. 

Whenever a subcontractor or vendor is unpaid, they should consider utilizing the trust fund statute. 

The information provided in this article is not intended to serve as specific legal advice for any particular situation. Competent legal and experienced counsel should be consulted.