Labor law in New York

27 February 2019

New York Labor Law section 240 and 241 provides contractors and owners with no margin for error.

Labor Law sections 240 and 241 – often referred to as the ‘Scaffold Law’ – places full responsibility for all gravity-related injuries on the contractor and owner in New York State.

Although workers’ compensation regulations mean site employees cannot make a claim against their employer, they are able to make claims against a main contractor or building owner.

Consequently, the labor laws remain a significant concern for these principal project stakeholders.

Awards to plaintiffs have rocketed in recent years to the extent that a construction company in New York would typically price insurance at around 10 per cent of its construction value, and 75 per cent of the loss fund that the contractor would put together would be for liability claims.

It has even been suggested, but not as yet substantiated, by the city’s Department of Education that these additional costs are equivalent to the provision of two new schools a year.

As a result, many insurers have pulled out of writing New York construction business on the liability side or have shifted their attachment point above $25 million, or even $50 million.

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The impact on the lower layers has been that terms and conditions have become much more restrictive and pricing has risen significantly.

In order to minimise the risk of exposure to the labor laws, robust site safety programmes should be implemented as a matter of course.

In addition, contractors and owners have implemented a range of initiatives to reduce the impact of Labor Law section 240 on their businesses.

A number of precautions that have been adopted by contractors include fall protection programmes, drug and alcohol testing, minimising the use of ladders on job sites, and return to work programmes.

Providing on-site medical services to assess injured parties – as opposed to a third-party medical contractor that might inflate the scope of the injury – is another precaution employed by contractors and building owners as they seek to reduce their exposure to such risks apparent during a project’s construction phase.


For more information please contact Paul Woodward, Head of North American Casualty on +44 7901 555672