A Primer on New York State MWBE Certification

By: Danielle Dietrich

What is MWBE Certification?

New York State’s MWBE certification is a designation that recognizes businesses owned and operated by minorities or women. This certification opens doors to a variety of benefits, including:

• Government contracts: Increased access to government contracts at all levels, from local to state.
• Procurement opportunities: Participation in procurement programs and initiatives designed to support MWBE businesses.
• Networking: Connections with other MWBE businesses and industry leaders.

Eligibility Requirements

To qualify for MWBE certification in New York State, a business must meet the following criteria:

• Ownership: At least 51% ownership by minority or woman citizens or permanent residents.
• Operation and control: Minority or woman owners must actively manage day-to-day operations.
• Personal net worth: Must not exceed $15 million (with certain exceptions).
• Business size: Less than 300 employees, calculated as the average total employees over four calendar quarters.
• Independence: Must be an independent business, not a subsidiary or division of another company.
• Active business: Must have been in operation for at least one year.

To meet the definition of minority, the controlling owner(s) must be:

• Black: Persons having origins from any of the Black African racial groups.
• Hispanic: Persons of Mexican, Puerto Rican, Dominican, Cuban, Central or South American descent of either Native American or Latin American origin, regardless of race.
• Asian-Pacific: Persons having origins from East Asia, Southeast Asia, or the Pacific Islands.
• Asian-Indian Subcontinent: Persons having origins from the Indian subcontinent.
• Native American or Alaskan Native: Persons having origins in any of the original peoples of North America.

Personal Net Worth

The following assets are not included in the New York State $15 million personal net worth limitation:

• Primary residence or the mortgage for that residence.
• Ownership interest in the applicant firm.
• Ownership interest in a holding company established for the exclusive and sole purpose of leasing machinery, equipment, or vehicles exclusively to the certified minority or women-owned business enterprise, that is majority owned by the minority group member or women relied upon for certification, and the holding company does not own any other assets of any kind.
• Up to $750,000 of any qualified retirement savings plan.

Industry-Specific Exemptions:

In certain industries, women and minority-owned businesses may be exempt from the personal net worth requirement. These industries include:

• Electricity distribution;
• Natural gas distribution;
• Geotechnical construction technologies; and
• Mechanical, electrical, and plumbing (MEP) engineering.

Out-of-State Businesses

If your business is located outside of New York, you may still be eligible for certification if you can demonstrate that you are certified as an MWBE in your home state (if such a certification exists in your home state). Additionally, your business must be authorized to do business in New York.

If you have questions about applying for MWBE certification, please contact Danielle Dietrich, Esq. at ddietrich@potomaclaw.com or 412-449-9141.

This blog is posted with the understanding that the author, publisher, and distributor of this blog and/or any linked publication are not rendering legal, accounting, or other professional advice or opinions on specific facts or matters and, accordingly, assume no liability whatsoever in connection with its use. By viewing Potomac Law Group’s blog posts, the reader (‘you”) understands that there is no attorney-client relationship between you and Potomac Law Group. The blog should not be used as a substitute for obtaining legal advice from an attorney, and you are urged to consult your own legal counsel on any specific legal questions you may have.

Pursuant to applicable rules of professional conduct, portions of this blog may constitute Attorney Advertising.