New York City Expands Living Wage Law For City Contractors

On September 30, 2014, New York City Mayor Bill de Blasio signed Executive Order No. 7, “Living Wage For City Economic Development Projects,” which raises the city’s “living wage” (i.e., minimum wage) for certain employers that contract with the city or that receive government subsidies. The executive order also covers more employers than the existing New York City law.

Mayor de Blasio enacted the executive order pursuant to New York City’s Fair Wages for New Yorkers Act, which the New York City Council passed in 2012 over former Mayor Michael Bloomberg’s veto. As we covered in the August 2013 issue of the New York eAuthority, the law’s initial passage let to litigation that pitted the mayor’s office against the New York City Council, which was then abandoned by the current administration.

Under the new executive order, covered entities are required to pay employees who do not receive health benefits an increased living wage of $13.13 per hour, up from $11.90 per hour. Employers that provide health benefits are required to pay employees $11.50 per hour, up from $10.30 per hour.

The executive order also expands the living wage law’s reach, for example, by covering commercial tenants in projects that receive more than $1 million in city subsidies. Mayor de Blasio’s administration estimates that an additional 18,000 workers over the next five years will be affected by these expansions. However, the executive order does not apply to (1) manufacturers; (2) businesses with gross income below $3 million; and (3) housing projects with more than 75 percent affordable units.

Mayor de Blasio has indicated that additional amendments to New York City wage laws are forthcoming, and we will continue to monitor any new laws that will affect New York City employers.