By Al Barbarino
Mayor Michael Bloomberg has filed a lawsuit against the City Council over the validity of the recently enacted Prevailing and Living Wage Laws.
The local laws would require certain industrial companies, developers and landlords who either receive city funds or rent office space to the city to pay wages that are above the state’s minimum wage.
Bloomberg vetoed the bills in April, but the Council over-rode his veto by a vote of 46-5 in June.
When he vetoed the bills, Bloomberg stated that the laws would hinder the city’s efforts to attract and generate local business, making city agencies less attractive tenants to affected landlords.
“The creation of well-paying, sustainable jobs has never been more critical to New York City residents and to the future of the city’s economic health,” Bloomberg said in his veto message.
The laws “would increase the costs associated with development by mandating higher staff costs for projects receiving financial assistance from the city” and “erase the competitive advantage induced by this assistance,” making it harder for companies with other options to commit to New York City, he added.
The City Council, however, has maintained that the bills are necessary to create better jobs and promote income equality.
“When we invest in economic development, we should expect that the jobs that are created are good jobs – ones that will protect and grow the middle class,” Council Speaker Christine C. Quinn said in statement.
“This bill does that and does so in a way that will not overburden businesses. The city has negotiated living wage requirements on individual deals in the past, and I believe that we must continue this work to provide as many living wage jobs as possible on subsidized projects.”
The lawsuit, brought by the New York City Law Department on behalf of Mayor Bloomberg, alleges that the laws are “pre-empted,” or overridden, by state and federal laws. Because the state has its own minimum wage law, the city is prohibited from enacting laws that require certain employers to pay higher wages, according to a statement from the Law Department.
The suit also claims that the laws unlawfully limit powers given to the Mayor under the City Charter. Such limiting laws are only valid if they are approved by the voters in a referendum, which these were not, according to the statement.
By imposing additional requirements on city economic development projects, the local laws conflict with the Mayor’s lawful discretion over the sale of city property if he has identified a public interest, it states.
“By these local laws, the Council seeks to impose a regulatory minimum wage upon selected sectors of the city economy that are remote from direct city involvement,” said Michael A. Cardozo, corporation counsel with the New York City Law Department.
“For good reason, the Court of Appeals has held that minimum wage regulation is a subject matter reserved to the state. To the extent that the local laws frustrate the purposes of state laws and interfere with state economic development programs, they are pre-empted.
“The local laws are also invalid because they purport to set the terms under which the City may acquire an interest in real property.”
