Will Unionized New York City Construction Workers be Entitled to Premium Pay Under Pending City Legislation?

As we previously blogged, the New York City Council has introduced an expansive COVID-19 relief package, which includes a proposed bill requiring large “essential businesses” to pay premiums to certain essential, non-salaried workers.

Specifically, the proposed legislation would apply to “essential businesses,” as defined by the Empire State Development Corporation in accordance with Governor Andrew Cuomo’s Executive Order 202.6, that employ (or are permitted to employ) 100 or more persons.  Under the proposed legislation, such “large essential employers” must pay their employees premiums of (1) $30 for any shift of less than four hours; (2) $60 for any shift of between four and eight hours, inclusive; and (3) $75 for any shift of greater than eight hours.

Construction businesses who meet the definition of “large essential employers” are likely to wonder whether they must pay these premiums to employees covered by a collective bargaining agreement.  The short answer, at least as the proposed bill is drafted, is yes.

The City Council’s proposed legislation states that essential employees entitled to premium pay do not include employees “covered by a collective bargaining agreement,” but only if the subject collective bargaining agreement “expressly waives the provisions of this local law and provides comparable or superior benefits for essential employees.” (emphasis added).

Although it is not clear whether this legislation will be passed in its current form, several observations about the text of the proposed bill will be of interest to construction firms.

First, even if a collective bargaining agreement is amended in an effort to opt-out of the provisions of the new legislation, essential unionized employees must likely be paid the same or similar premiums payable to non-unionized employees.  As noted above, the bill in its current form would require large essential employers to provide “comparable or superior benefits,” even where the collective bargaining agreement waives the provisions of the new law.  Note, however, that the proposed legislation does not indicate what a “comparable or superior benefit” entails, and it remains to be seen how this provision will be interpreted if the legislation is passed in its current form.

Second, and by way of comparison, the proposed legislation goes a step further, in terms of influencing the contents of collective bargaining agreements, than does the New York City Earned Safe and Sick Time Act.  That law does not apply to employees in the construction industry covered by a valid collective bargaining agreement so long as the provisions of the law are expressly waived in the collective bargaining agreement.  The proposed premium pay legislation, by contrast, requires not just an express waiver of the new law in the collective bargaining agreement, but also the provision of “comparable or superior benefits” for essential employees.  Therefore, as written, the new legislation would not allow the union to opt-out of the law by simply agreeing to a waiver of premium pay.

Third, and as a practical matter, the concept of “essential workers” under the Governor’s Executive Order arises out of interim, emergency-type measures necessary to address the current COVID-19 pandemic.  Given the (hopefully) relatively short period of time that the Executive Order will remain in effect going forward, parties to few, if any, collective bargaining agreements will be able to realistically negotiate a timely and specific carve-out of the proposed legislation before its relief measures become moot.

We will continue to monitor the New York City Council’s pending legislation and provide additional updates as they become available.

As the law continues to evolve on these matters, please note that this article is current as of date and time of publication and may not reflect subsequent developments. The content and interpretation of the issues addressed herein is subject to change. Cole Schotz P.C. disclaims any and all liability with respect to actions taken or not taken based on any or all of the contents of this publication to the fullest extent permitted by law. This is for general informational purposes and does not constitute legal advice or create an attorney-client relationship. Do not act or refrain from acting upon the information contained in this publication without obtaining legal, financial and tax advice.  For further information, please do not hesitate to reach out to your firm contact or to any of the attorneys listed in this publication.