By Sarah Trefethen
A New York State Supreme court judge on Monday ruled that the city’s prevailing wage bill – supported by the majority of the City Council but opposed by Mayor Michael Bloomberg – is invalid because the state already has a minimum wage law.
The bill required that service workers in buildings that receive city money – either where the City is a tenant or in developments that receive discretionary financial assistance – be paid a wage determined by the New York City comptroller, known as the “prevailing wage”.
The court’s decision will be welcome news to opponents of the legislation, which include the Real Estate Board of New York.
“Legislation imposing wage mandates increases costs on employers and reduces the creation of new jobs, discourages capital investment and lowers tax revenue for the City of New York,” Steve Spinola, REBNY president, wrote in Real Estate Weekly last year.
The City Council passed the bill in April last year. The mayor then vetoed the bill, the council overrode his veto, and the mayor sued.
“This ill-conceived legislation threatened some of the most important job-creating projects in the city. 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,” Julie Wood, the mayor’s press secretary, said in a statement praising the court’s decision.
For city leases, prevailing wages would have been required in any building where an agency occupies 10,000 s/f or more of commercial space and the aggregate city leases are at least 51 percent of the total square footage if the building is located within the 421-a exclusion area or 80 percent of the total square footage in buildings outside that exclusion area or anywhere in Staten Island.
Financial assistance offered is defined as cash payments, grants, bond financing, tax abatements or exemptions, tax increment financing, filing fee waivers, energy cost reductions, environmental remediation costs, a write-down in the market value of a building, land or leases, or the cost of capital improvement in the amount of at least $1 million given to an entity for the purpose of the improvement or development of real property, economic development, job retention or growth or other similar purposes if the project is larger than 100,000 s/f or 100 residential units.
Manhattan Borough President Scott Stringer, who is currently campaigning for the position of city comptroller, issued a statement condemning the court’s decision.
“Today’s decision striking down the City’s prevailing wage ordinance is a setback in our effort to ensure that New York City’s economic development dollars support solid, middle-class jobs,” Stringer said.
“At a time when so many New Yorkers are struggling to make ends meet, we should embrace progressive policy that closes the income gap and supports an economy that is built from the middle-up. The bottom line is that no New Yorker should work full time for poverty-level wages, especially on projects supported with taxpayer dollars. I urge the Council and advocates to use every legal avenue to overrule this disappointing decision.”