New York Off-Site Custom Fabrication Prevailing Wage Law Temporarily Halted by Preliminary Injunction, by Andrew L. Richards, Esq., 6-11-26

On June 8, 2026, the U.S. District Court for the Northern District of New York entered a consent order providing for a preliminary injunction that suspends enforcement of New York Labor Law § 220(3)(f), the amendment extending prevailing wage obligations to certain off-site custom fabrication for public works projects. The order is significant because the statute had been scheduled to take effect on June 18, 2026, but its effective date is now suspended and stayed unless and until the court later lifts that relief.

What the court ordered
The consent order provides that the amendment’s effective date is suspended and stayed during the preliminary injunction period, unless the court later denies the plaintiffs’ emergency motion, grants a defense motion to dismiss, or otherwise terminates the suspension. During that period, the defendants are barred from enforcing any aspect of the amendment.

The order also states that no public owner, private owner on a prevailing-wage-covered private project, general contractor, subcontractor, fabricator, or other project participant, regardless of location, is required to comply with the amendment or include it in contract terms while the injunction remains in effect. In addition, the defendants are barred from pursuing enforcement measures based on alleged noncompliance with the amendment, including civil penalties, debarment proceedings, and criminal referrals.

Litigation posture
As discussed in the earlier KD client alert, the plaintiffs filed suit on May 28, 2026, seeking temporary, preliminary, and permanent injunctive relief before the statute became operative. The complaint challenges the law on multiple grounds, including allegations that it unlawfully regulates fabrication outside New York, burdens interstate and foreign commerce, is impermissibly vague, and creates compliance obligations that are impractical to administer.

The consent order notes that the complaint alleges the amendment is ultra vires, void ab initio, and unconstitutional under the Commerce Clause, Due Process Clause, Takings Clause, Contracts Clause, and Equal Protection Clause of the U.S. Constitution. The parties also agreed to extend the briefing schedule, with defendants’ opposition to the emergency motion and any joint cross-motion to dismiss due July 21, 2026, plaintiffs’ reply and opposition due August 18, 2026, and defendants’ reply due August 25, 2026.

Practical implications
For now, affected parties may pause implementation efforts that were tied solely to the June 18, 2026 effective date of the amendment, because the order suspends both the effective date and enforcement of the law pending further court action. However, parties should continue monitoring the litigation and consult counsel regarding project-specific obligations, as the court’s order provides interim relief and does not resolve the merits of the underlying constitutional and statutory challenges.

Importantly, the amendment has not been repealed or invalidated. Rather, the June 18, 2026, effective date has been suspended and stayed unless and until the court lifts that suspension or otherwise permits the amendment to take effect.

Immediate considerations for industry participants

• Review solicitations and contract forms for public works projects advertised on or after June 18, 2026, and confirm whether parties are removing or pausing custom-fabrication prevailing wage clauses while the injunction remains in place.
• Revisit vendor and fabricator communications to ensure no party is acting on the assumption that certified payroll, registration, or prevailing wage supplements are currently required under the suspended amendment.
• Track the revised briefing schedule and any future order that could reactivate the statute on relatively short notice.

Continue legal and operational analysis of product categories that may qualify as “custom fabrication,” particularly where project-specific engineering or out-of-state fabrication is involved, because those coverage questions remain central to the dispute.

Author:
Andrew L. Richards
Co-Chair of Construction Practice Group