Judge strikes down prevailing wage law

August 7, 2013 By Charisma L. Miller, Esq. Brooklyn Daily Eagle

Public Advocate Letitia James, who is currently running to be the next attorney general for New York State, was honored by the MBBA last week with the Public Servant of the Year Award. Photo by Rowena Husbands/Blink of An Eye Photography Online

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A judge has ruled in favor of New York City Mayor Michael Bloomberg’s suit against the “prevailing wage” law that set pay for workers in some buildings.

The law required that a prevailing wage, higher than the state’s minimum wage, be paid to building service workers employed by companies that receive over $1 million in economic development aid, employees of contractors that receive seven figures from the city in economic development aid and building service workers employed by companies that lease property to the city.

In May 2012, the City Council voted 44-4 in support of the law. Bloomberg vetoed the measure last year and sued the City Council after it overrode his veto, asserting that the law was invalid.

Bloomberg argued that the law violated existing rules stating that no local law can supersede standing labor laws. He also argued that the prevailing wage law pre-empted the state’s minimum wage act — the only claim that Manhattan Supreme Court Justice Geoffrey Wright addressed in reaching his holding the case.

The City Council argued that case precedent gives it the ability to set wages for non-city employees. The Council cited a case ruling that while it is not permitted to set a citywide minimum wage, it may order the terms of city contracts, thus mandating the pay that employers with city contracts must pay their workers.

As such, the City Council’s argument went, the law requiring a prevailing wage for employees of entities that receive city monies is valid and appropriate. Wright disagreed, finding the cited case law “distinguishable” from the case at hand.

The prevailing wage law “mandates that private employers [landlords and building owners] pay their private employees [building service workers] a wage higher than the state’s minimum wage if one of the landlord’s tenants is either financially benefiting from an investment by the City of New York or is the City of New York itself,” Wright summarized.

Thus, Wright concluded, “this amounts to a citywide minimum wage increase for certain private employees, paid by their private employers” and is therefore invalid.

The prevailing wage law guaranteed wages of up to $20 an hour for building-services employees.

“Legislation like this makes it harder for companies to invest in New York City at a time when we need to be making it easier,” said Julie Wood, first deputy press secretary for the Mayor’s Office.

“I renew my support for the prevailing wage legislation, and join my colleagues in the fight for higher union-level wages for workers in buildings where the city is the major leaseholder,” said Council Member Letitia James. “In his decision, Justice Wright recognized — contrary to arguments from the administration — this legislation is beneficial to many of the city’s service workers and good for our local economy.”

A spokesman for City Council Speaker Christine Quinn said she disagreed with the decision and would appeal.