With limited assessment, looking to expand living wage
Living wage is a fiscal policy fad at New York City Hall right now, with local elected officials pushing to strengthen and expand city laws that guarantee a wage floor for workers in city-subsidized projects and employees of contracted service providers.
But New York City's original living wage law established a base pay rate for contracted personnel back in 2002, and officials are only beginning to assess its implementation. The city comptroller in July produced annual reports on the matter for the first time in 12 years and the administration is beginning to face questions about oversight of living wages.
Now, as advocates and some City Council members push to build out the 2002 measure beyond the seven industries it currently covers and raise the compensation rate, some are calling on the city to comply with all of the public reporting protocols written into the measure.
“It’s in their best interest to get up to speed on what the current requirement is as they consider expanding the scope and the wage level,” said James Parrott, deputy director and chief economist of the left-leaning Fiscal Policy Institute. “What’s laid out in the law seems to me to be a fairly workable way to monitor compliance.”
The 2002 law requires city agencies contracting out services in certain industries to ensure selected firms pay personnel prevailing or living wage, whichever is higher. The city comptroller sets the prevailing wage for several industries every year.
The living wage gradually increased to its current level of $10 an hour and comes with health benefits or a supplemental $1.50 in compensation. Covered sectors include home care, building, day care, Head Start, food and temporary services as well as assisting those with cerebral palsy.
Prior to signing or renewing contracts, firms are required to submit a certificate of compliance agreeing to follow the law and providing financial details about implementation. Updated certificates must be filed annually. The law deems these public documents that need to be made available for inspection upon request. (The measure does allow firms in certain industries to submit alternative fiscal documents as substitutes for certificates.)
The comptroller is charged with usingthese submissions to compile an annual report for the administration and lawmakers summarizing and assessing implementation and enforcement of the law.
About a month after City & State began requesting recent reports in early July, Comptroller Scott Stringer’s office said that, independent of City & State’s inquiry, it realized the review had never been compiled and retroactively produced a dozen years of them.
“We can’t speak for previous administrations,” Stringer spokesman Eric Sumberg said. “With that being said, the comptroller began a review of the reporting requirements of the office last year, and the staff identified this report as one that had not been completed. The data found in the annual reports show that violations have been limited.”
Indeed, the reports show 34 cases of potential violations were opened and 31 closed during the first dozen years under the law. Most of the cases—18—were closed because the city lacked jurisdiction, seven resulted in small claims settlements, one was deemed a non-willful violation and three concluded when no violation was substantiated. The comptroller’s office said market compensation rates for many of the industries had risen above the living wage level, which may explain why there seems to be less enforcement. The contracts database the comptroller’s office uses cannot aggregate information by compliance certificate, so officials said they did nothave a sense of how frequently the annual certificates have been submitted.
The de Blasio administration did not respond to inquiries about whether certificates have been routinely filed and whether City & State could set up appointments to review them or would need to submit Freedom of Information Law requests to review the documents.
Still, some observers say the law is relevant. Advocates pointed to a 2014 state Supreme Court decision ruling that Maramont Corp., which had contracts to provide pre-packaged food to the city Department of Education, Department of Homeless Services and Housing Authority, failed to pay wages required by the living wage law to dozens of employees for about a decade. James Murphy, an attorney who represented the workers, said a judge issued an $89 million judgment against Maramont for back pay owed to workers, and the parties are working on finalizing a settlement that will not involve Maramont admitting guilt.
Murphy said he was aware of the city providing information about the living wage mandate, a pay schedule and sample certified payroll submissions with contracts, but does not typically do much follow-up.
“The city administration wasn’t even aware that we had this judgment until it showed up in the Daily News,” he said of the court case. “There wasn’t any enforcement or follow-up mechanism, which is something that happens in a lot of instances with prevailing wage cases for construction and trade labor.”
The limited details on living wage compliance have not curbed enthusiasm for expanding the measure. In its official budget responsethis year, the City Council wrote that no municipal and contractor employees should earn less than the $13.13 an hour. That was the rate required under the more recent 2012 living wage, which stipulated that any project receiving $1 million or more in city benefits must pay workers a so-called living wage. The pay rate under this subsidy living wage law has since risen to $11.65 an hour with benefits, or $13.30 an hour without for projects authorized after Sept. 30, 2014. De Blasio announced this May that the administration budgeted money to help nonprofit agencies contracted to do social services pay personnel $11.50 an hour.
City Council Contracts Committee Chairwoman Helen Rosenthal said she would be examining the November budget documents to see how the city could raise contractor wages to $15 an hour, via an administrative policy or legislation. She would also like to see human services providers, such as those with contracts to care for youth, senior citizens and homeless people, brought under the living wage regulatory scheme. This would encompass about 60,000 to 80,000 workers, according to Parrott.
Additionally, Rosenthal, said she’s now trying to gauge the efficacy of compliance measures written into the 2002 law, including whether the annual reports fulfill their goals.
“It depends on how you analyze the word ‘assessing’ the implementation,” she said. “That could be a bullshit statement. Or it could be detailed. And perhaps we need to tweak it to make it detailed. … I’m looking into it.”
Correction: An earlier version of this story did not include the accurate subsidy living wage law rate, which is currently $11.65 an hour for workers who receive benefits and $13.30 an hour for those who do not.
Read the New York City comptroller’s annual documents below on enforcement of the 2002 living wage law, which summarize the number of cases each year.