Buildings Get Billions, Workers Get Bilked

Jan. 6, 2016 — While building owners in New York City – including many co-ops and condos – get more than $1 billion in annual tax breaks under the 421-a program, hundreds of workers in those buildings are being illegally underpaid, according to a new investigation by ProPublica.

A 2007 state law said that no tax benefits would be granted to 421-a buildings that fail to pay “prevailing” wages to their non-union employees – a rate set by the city comptroller and pegged to union contracts. The law covers buildings of 50 or more units that started construction after December 2007.

Since then, according to city estimates, up to 400 buildings have fallen under the requirement to pay “prevailing” wages, but in 2013 the 32BJ labor union found that nearly half of the buildings it surveyed had underpaid employees. Last summer the state legislature transferred oversight of the wage requirement from the city’s department of Housing Preservation and Development (HPD) to the city comptroller.

One victim of the lax oversight is Francis Alphonse, the super at 341 Eastern Parkway in Brooklyn. By law he should be paid $24.83 an hour plus $10.38 in benefits; in reality he’s paid $15.63 an hour with no benefits.

“When you know the government is giving out these big tax breaks and they do nothing for workers,” Alphonse said, “it’s like you want to cry.”