LIC Condo Board Settles Wage Dispute with Service Workers

There's no such thing as a free lunch — or a free tax break. The popular 421-a tax abatement, for instance, comes with the requirement that a building receiving the tax relief must pay its non-union employees prevailing wages, which are pegged to the wages and benefits enjoyed by members of Local 32BJ of the Service Employees International Union.

Unit-owners at the Jackson, an 11-story, 54-unit condominium in Long Island City, Queens, are enjoying a sliding, 15-year tax abatement under the 421-a program. But they're just been hit with bad news: the condo board has reached a $119,000 settlement with the building's service workers after an investigation revealed that they were not paid prevailing wages. The settlement includes unpaid benefits plus interest.

“Companies cannot expect to reap tax breaks like 421-a and not pay their employees the required wages and benefits,” Comptroller Brad Lander tells the Long Island City Post. “This disregard for the law will not be tolerated, and this settlement serves as a warning to all companies that they must follow the law when it comes to fair compensation.”

Six workers at the Jackson claimed that the condo failed to pay them legally required supplemental benefits. As a result, the workers collectively missed out on a total of $87,676 in supplemental benefits from October 2017 to December 2019.

The 421-a is administered by the city's Department of Housing Preservation and Development and is given to property developers in exchange for offering affordable housing. The abatement typically lasts anywhere from 10 to 25 years, and it decreases as it moves toward its expiration date. 

The prevailing-wage requirement for recipients of the 421-a abatement is not to be confused with another rule, instituted in 2022, that ties the popular co-op and condo property tax abatement to payment of prevailing wages and benefits. That rule, which caused an uproar among smaller co-ops and condos, required boards and their property managers to do a complicated cost-benefit analysis to determine if the cost of paying prevailing wages and benefits to non-union employees outstripped the benefits of the property tax abatement. Buildings with unionized staffs did not face that dilemma.