Crunch the Numbers on Prevailing Wages

New rule. On Labor Day 2021, Gov. Kathy Hochul signed the bill that made the co-op and condo property-tax abatements contingent on paying all building employees the prevailing wage, which is roughly equivalent to Local 32BJ’s pay and benefits schedule. The biggest issue in the non-union buildings that were not paying the prevailing wage was whether the cost of increasing each employee’s pay to get to that threshold was more or less than the tax abatement that the building was receiving, individually and collectively. That was the first threshold question. And secondly, on the budgeting side, how much of an increase in common charges or maintenance would residents have to pay to meet that prevailing-wage standard for all their employees?

Crunching the numbers. In the end, for many buildings, paying the prevailing wage would require a 20% to 30% increase in maintenance or common charges. We had some buildings that were willing to join the union, and we had many buildings that decided to forgo the tax abatement and keep their staff wages at the previous numbers.

No going back. Everybody understands that once you give people this combined increase in wages and supplemental benefits, it would be very, very tough to reduce it. So most of the buildings knew that it was a decision that wasn’t going to be reversed in terms of dollars. This is going to be an ongoing discussion for buildings that are not joining the union, and it was a huge challenge for us. It was a monthslong part of the budgeting process, and it was part of the explanation process to the board members. Nobody could really totally wrap their arms around the various parts of this. This was a big one.