Testimony of The Real Estate Board of New York to The Committee on Civil Service and Labor of The New York City Council Concerning Intros 1918, 1923, and 1926

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The Real Estate Board of New York (REBNY) is the City’s leading real estate trade association. Founded in 1896, REBNY represents commercial, residential, and institutional property owners, builders, managers, investors, brokers, salespeople and other organizations and individuals active in New York City real estate. REBNY strongly supports policies that expand the local economy, grow and improve the City’s housing stock and create greater opportunities for all New Yorkers. Thank you to the City Council for the opportunity to testify on Intro 1918, Intro 1923, and Intro 1926.

New York has been acutely affected by the unprecedented COVID-19 crisis, not only from devastation to public health but also an upending of virtually every aspect of society. The labor market is no exception. New Yorkers worry about their jobs and financial health – their ability to keep a home and food on the table. That is why REBNY has been an aggressive advocate for New York City, its businesses, and its employees, especially before the federal government. REBNY has advocated for additional MTA funding, state and local aid, business interruption programs, and reforms to the Paycheck Protection Program that can keep New York City businesses afloat and has provided technical assistance to thousands of independent contractors that comprise our membership.

REBNY understands that as the economic landscape rapidly changes and more New Yorkers file for unemployment insurance every week, there is growing uncertainty and anxiety about personal finances. While real estate, like every sector, has been impacted by the economic downtown, our members are committed to helping their fellow New Yorkers withstand this crisis. Not only are our members in close communication with our partners in organized labor and their employees to develop temporary agreements to adjust to the new circumstances while ensuring workers continue to receive a paycheck and benefits, including healthcare, but many residential property managers have voluntarily provided bonuses to frontline building service workers.

With this in mind, REBNY shares the Council’s commitment to protecting all workers. As the Council considers these measures, it is important to be mindful that imposing specific safeguards can lead to unforeseen consequences for those the legislation seeks to support. 

BILL: Int. 1918-2020

SUBJECT: A Local Law in relation to premiums for essential workers.

SPONSORS: Council Members Cumbo, Johnson, Kallos, Van Bramer, Lander and Chin

Int. 1918 requires large employers to pay premiums to certain essential non-salaried workers. Employers with more than 100 employees would pay hourly workers $30 for a shift under four hours, $60 for a shift of four to eight hours and $75 dollars for any shift over eight hours. The obligation would end when the state of emergency is lifted. The proposal includes an exception for certain collective bargaining agreements and real estate businesses assigned a North American Industry Classification System (NAICS) code beginning with 531.

Like all New Yorkers, REBNY members are deeply grateful for the sacrifices that essential workers are making during this crisis. Essential workers put their lives at risk from the elevated potential exposure to the virus and they deserve our gratitude.

As the predominant employer of unionized building service workers, working with the Realty Advisory Board on Labor Relations (RAB), our members are proud to have reached flexible agreements with our partners in organized labor to help essential building service workers and their families get through this unprecedented crisis. These agreements have supported the livelihoods of many building service workers and their families and will help workers maintain wages and benefits as work begins to resume. What’s more, we are proud that many of our members have voluntarily taken steps to provide additional compensation to those who continue to work throughout the pandemic.

While many property owners have been able to take these steps as a result of the industry’s partnership with organized labor, changes to this legislation are necessary to avoid significant cost additions to property owners and other businesses that will result in layoffs and business closures. This is particularly true as real estate employers with more than 100 employees tend to be large commercial employers who have been most significantly impacted by decreased rent collections that are essential to making payroll. Consequently, specifically for the real estate industry, the legislation should be amended to exempt any collective bargaining agreement and expand the exemptions to include businesses with NAICS codes including 236 (construction of buildings) and 561 (administrative and support services including security and janitorial services).

More generally, the Council must recognize that many employers simply do not have the financial resources in this crisis to provide additional compensation to their workers. With consumer spending falling, many “essential” businesses are struggling to keep their doors open and make payroll. Many are relying on loans from the federal government to operate at all, with current payroll parameters locked into place. This legislation will force those businesses, otherwise able to continue operating, to lay-off staff and close their doors, further deepening the economic crisis.

Given this reality, if the Council desires to provide additional compensation to “essential” workers, legislation should provide this money from City funds.  

BILL: Int. 1923-2020

SUBJECT: A Local Law to amend the administrative code of the City of New York, in relation to just cause employment protections for essential workers.

SPONSORS: Council Members Kallos, Johnson, Lander, Van Bramer and Chin

Int. 1923 precludes any employer to terminate, constructively discharge, reduce the hours, or indefinitely suspend an essential employee without providing just cause. In addition, before an employer could take any of the aforementioned actions, even for malfeasance, insubordination, gross misconduct, or criminal activity, the employee must have been subjected to progressive discipline within the last calendar year. The bill also grants any “discharged” employee the right to pursue civil action against the employer at the latter’s expense or seek an arbitration.

REBNY appreciates the Council’s intent to protect the jobs and welfare of essential employees. Their commitment has helped the city move forward through the current crisis. The unionized building service workers employed by our members already have such “just cause” protections by virtue of their collective bargaining agreements. However, the standards in the proposed legislation exceed the current “just cause” protections in these collective bargaining agreements.

In such unprecedented times, we are concerned that this is not the appropriate time to restrict the ability of employers to rapidly make adjustments to their staffing levels in light of the changing business conditions. This legislation prevents small businesses from changing with the economic conditions, forcing them to continue payments at risk of their continued financial viability and the ability to maintain the greatest number of employees on payroll or with insurance. We would welcome the opportunity to more fully discuss this type of legislation once the immediate crisis has passed.

BILL: Int. 1926-2020

SUBJECT: A Local Law to amend the administrative code of the City of New York, in relation to the expansion of worker coverage under the Earned Safe and Sick Time Act, and to repeal subdivision f of section 20-913 of such code, relating to exemptions from coverage under the Act, and the undesignated paragraph defining “employee” in section 20-912 of such code.

SPONSORS: Council Members Lander, Kallos, Van Bramer and Chin

Int. 1926 expands the coverage of the Earned Safe and Sick Time Act by broadening the definition of an employee to include many workers currently classified as independent contractors.

REBNY supports the Council’s intention to ensure that all persons enjoy the benefits of the Earned Safe and Sick Time Act. Particularly in a moment of crisis when workers may have to care for sick relatives or tend to their own health, it is critical they be afforded the time to do so. That’s why we are pleased that the federal government expanded coverage of paid sick and leave programs as well as unemployment insurance to include many independent contractors.

If the Council chooses to move forward with this legislation, it should provide an explicit exemption for real estate salespersons. Many brokers and salespersons choose to work as independent contractors to enjoy the flexibility of running their own business. They are appropriately classified as independent contractors. New, expanded, “tests” for determining whether a worker is an employee or independent contractor should be considered at the State level rather than on a program-by-program basis at the local level to avoid any preemption issues.

Thank you for the consideration of these points.

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CONTACT:

Zachary Steinberg
Vice President, Policy and Planning
Real Estate Board of New York (REBNY)
(212) 616-5227 
zsteinberg@rebny.com