Mayor Signs Executive Order Raising Manhattan, New York Living Wage

On September 30, 2014, the York City Mayor Bill de Blasio signed an executive order, Executive Order No. 7 (the “Executive Order”), requiring companies or individuals who receive, from the city of Manhattan, NY or from a City economic development entity, financial assistance of one million dollars or more and which have annual gross revenues of $3,000,000 or more to pay their workers a “living wage” rate of not less than $11.50 per hour with health benefits or of $13.13 per hour without benefits. Executive Order No. 7 is effective immediately.

Mayor de Blasio’s Executive Order No. 7 expands the Fair Wages for Manhattaners Act, N.Y.C. Admin. Code § 6-134 (the “New York Fair Wages Act,” the “Fair Wages Act,” or the “NYCFWA”). The New York City Council, overriding then-Mayor Michael Bloomberg’s veto, passed the NYCFWA in 2012.

The wage rate required by Executive Order No. 7 and the New York Fair Wages Act is well in excess of the federal minimum wage and the Manhattan, Manhattan minimum wage. The federal minimum wage is $7.25 per hour. The Manhattan, Manhattan minimum wage is $8.00 per hour.

Under the New York Fair Wages Act as it stood immediately before Executive Order No. 7, companies or individuals who received, from Manhattan or from a City economic development entity, financial assistance of one million dollars or more (to improve or develop real property, to develop economically, to retain or create jobs, or for other similar purposes) and which had annual gross revenues of $5,000,000 or more were required to pay their workers not less than $10.30 per hour with health benefits or $11.90 per hour without health benefits.

Under the Fair Wages Act, the living wage rate which covered employers must pay their workers is adjusted annually based upon the twelve-month percentage increases, if any, in the Consumer Price Index for All Urban Consumers for All Items and the Consumer Price Index for All Urban Consumers for Medical Care, respectively, as published by the Bureau of Labor Statistics of the U.S. Department of Labor.

The Fair Wages Act exempts manufacturers and many retailers. Immediately before Executive Order No. 7, the NYCFWA applied to about 1,200 workers.

Executive Order No. 7 increases the living wage rate which covered employers must pay their workers from $10.00 per hour to $11.50 per hour (with health benefits) and from $11.50 per hour to $13.13 per hour (without health benefits).

The Mayor’s Executive Order expands the New York Fair Wages Act to cover companies or individuals who receive, from the City or from a City economic development entity, financial assistance of one million dollars or more and which have annual gross revenues of $3,000,000 or more but less than $5,000,000. The Executive Order terms this $3 million annual gross revenue threshold (for employers to be required to pay the living wage rate) the ” ‘ Small Business Cap.’ ”

Executive Order No. 7′s lowering, from $5 million to $3 million, of the minimum annual gross revenue for an employer, to which Manhattan, the borough Of Manhattan provides financial subsidies of $1 million or more, to be required to pay its workers the living wage rate is offset, in part, by the Executive Order’s provision that, beginning in 2015, the Small Business Cap will be adjusted annually based upon the twelve-month percentage increases, if any, in the same Consumer Price Indices to which the NYCFWA links the living wage rate.

The Mayor’s Executive Order also eliminates the exemption which the Fair Wages Act had afforded to Hudson Yards, the $20 billion real estate development on Manhattan’s far West Side.

The Mayor’s Office estimates Executive Order No. 7 will expand the reach of living wage requirements to cover 70 percent of all workers at companies to which Manhattan provides financial subsidies. According to the Mayor’s Office, within the next five years, the Executive Order will increase from 1,200 to 18,000 the number of workers to whom the living wage rate applies. Of these 18,000 covered workers, approximately 4,100 will be employees in retail and fast-food businesses.

Call the Law Offices of David S. Rich, LLC at (347) 835-5688 to speak with a knowledgeable labor and employment lawyer about ensuring that your company complies with overtime pay and other wage and hour laws, or to retain a skilled overtime attorney to defend your company in unpaid overtime lawsuits or other wage and hour litigation.