Certain New York City condominiums and cooperatives will soon have an obligation to pay their building service employees the “prevailing wage.” New York Real Property Tax Law § 467-a provides eligible NYC condominiums and cooperatives with a partial tax abatement. The New York State Assembly and Senate passed, and Governor Kathy Hochul signed on September 6, 2021, an amendment to § 467-a that requires recipients of the tax abatement to pay building service employees the “prevailing wage.” Certain recipients of a § 467-a abatement are excepted from the prevailing wage obligation, including: (1) buildings where the average unit assessed value is less than or equal to $60,000, and (2) buildings (i) where the average unit assessed value is more than $60,000 but less than $100,000, and (ii) with less than 30 dwelling units. The amended statute provides for promulgation of rules with respect to the prevailing wage obligation, which may clarify or impact the reach of the prevailing wage obligation.

 

The prevailing wage obligation is effective April 1, 2022.

 

In New York City, the “prevailing wage” for “building service employees” is the wage and benefit rate set annually by the New York City Comptroller’s Office. Historically, the “prevailing wage” for residential building service employees has been the wage rate and the cost of the contributions to the benefit funds under the Manhattan Local 32BJ residential union contract. A prevailing wage obligation could mean large increases in labor costs for certain covered condominiums and cooperatives that are paying their building service workers below the prevailing wage.

 

For questions about the law and its potential impact on your condominium or cooperative, please contact Robert Sparer, Daniel Rowoth, or Leighann George.