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.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
