New York City Increases Hourly Wage for Workers at City-Subsidized Economic Benefit Projects; Expands Definition Of Covered Employers

October 2014Employment Update

On September 30, 2014, New York City Mayor Bill de Blasio signed an executive order that increases the living wage for workers employed at economic benefit projects that receive more than $1 million dollars in subsidies from the City (the "Executive Order"). The Executive Order also expands the New York City's Fair Wages for New Yorker's Act to cover additional employers.

The law is effective immediately, however it does not apply to projects which were awarded subsidies prior to September 30, 2014.

Living Wage Rate Increase
Specifically, the Executive Order requires employers who employ individuals at economic benefit projects that receive more than $1 million dollars in City subsidies to pay their employees at least $11.50 per hour if the employer provides health insurance, and at least $13.13 per hour if the employer does not provide health insurance. The living wage rate will be adjusted each year by the Commissioner of Consumer Affairs.

Law Covers Commercial Tenants of Subsidy Recipients
The Executive Order applies to all "Subsidy Recipients" as well as all tenants, subtenants, leaseholders, sublease holders and concessionaires of the Subsidy Recipient that occupy property improved or developed as part of a New York City economic benefit project. The Executive Order defines "Subsidy Recipient" as any entity or person that receives financial assistance of $1 million dollars or more as part of an economic benefit project or any assigned or successor in interest of such real property.

Commercial tenants that lease space from a "Subsidy Recipient" are covered under the Executive Order and must pay their workers the living wage rate of at least $11.50 per hour if they provide health insurance and at least $13.13 per hour if they do not provide health insurance.

However, since the Executive Order applies on a going forward basis it does not apply to commercial tenants that are currently leasing space in a City-subsidized project.

Moreover, small businesses with gross income below $3 million are exempt from the law.

Special thanks to Daniella M. Muller, an associate in the Employment Practice Group, for her assistance preparing this alert.

For more information on this issue or other employment matters, please contact:

Mara B. Levin at [email protected] or +1 212 592 1458 or
Carol M. Goodman at [email protected] or +1 212 592 1465.

Copyright © 2014 Herrick, Feinstein LLP. This alert is published by Herrick, Feinstein LLP for information purposes only. Nothing contained herein is intended to serve as legal advice or counsel or as an opinion of the firm.