Staff Salaries: To Increase or Not

Attracting workers. Despite the prospect of higher wages because of the prevailing wage regulations, there seems to be a shortage of people interested in working as porters, doormen and handymen in the industry. It has become challenging to hire employees for these positions.

Regardless of the size of the building, there are challenges related to frequency, cost, the service component, and attracting people for different positions. Buildings that do not pay prevailing wages may find it harder to attract or retain employees. Lower wages may lead to lower-quality staff, and other buildings paying prevailing wages may poach their workers.

There’s no going back. Once a building starts paying prevailing wages, it becomes challenging to revert to lower wages. Buildings risk losing their staff, making the switch a long-term commitment. Non-unionized buildings, particularly condominiums where a significant portion of owners do not qualify for property tax abatements, also need to consider the interests of qualifying and non-qualifying owners and project the increased staff costs if prevailing wages are paid.

Economic decisions. Many buildings opt for unionization because it includes paying the supplemental benefit along with the wage, and the union provides excellent medical benefits. Unionization can be a strategic choice for attracting and retaining employees. The decision on unionization or paying prevailing wages depends on the specific circumstances of each building. Non-abating buildings can still pay their employees the prevailing wage and provide the supplemental benefit in cash to qualify for tax abatements. However, they must ensure they actually pay the wage and benefit to avoid potential audits and clawbacks. The strength of the onsite management, communication with the superintendent or resident manager, and the ability to manage the union’s demands play significant roles in determining the best approach. 

Don’t forget. The city publishes a list of buildings that do not take advantage of property tax abatements. This list can be used to identify buildings that may not be paying prevailing wages, and their workers can be targeted for recruitment.