Bloomberg News

New York City’s Prevailing Wage Law Thrown Out by State Judge

August 06, 2013

A New York City requirement for landlords and companies receiving economic aid from the city to pay workers a prevailing wage was struck down by a judge who said it was preempted by the state’s minimum wage law.

New York Supreme Court Justice Geoffrey D. Wright in Manhattan said the measure, in effect, would have raised the minimum wage for some private employees. Wright, saying he recognized the potential benefits of the ordinance, said he made the decision “with great compunction” in the lawsuit filed by Mayor Michael Bloomberg.

“This court believes that the Prevailing Wage Law could benefit the people of New York and does not see wisdom in the mayor’s zeal for the possibility of welcoming to New York City a business that would pay its building service employees less than the prevailing wage,” Wright said in the ruling dated Aug. 2 and posted on the court’s docket yesterday.

The bill passed by the 51-member City Council, overriding the mayor’s veto, would have mandated the payment of a prevailing wage to service employees in commercial or residential buildings whose employers receive at least $1 million in economic development aid from the city.

Employers would have been required to maintain records and to report hours and wage and benefit information for those workers. The requirement also would have applied to all buildings in which the city leases space, which the mayor said would increase its costs.

Law’s Requirements

The law required that the prevailing wage calculated annually by the city comptroller be paid to workers in businesses that receive more than $1 million in city tax abatements or low-interest financing and in buildings leased by the city. The law exempted small and nonprofit businesses, , manufacturing plants and facilities of the city’s Health and Hospitals Corp.

The bill was adopted by the council 44-4 in May 2012 and took effect in November. The mayor, the founder and majority owner of Bloomberg LP, the parent of Bloomberg News, sued the council in July 2012.

“This ill-conceived legislation threatened some of the most important job-creating projects in the city,” Julie Wood, a spokeswoman for the mayor, said yesterday in a statement. “Legislation like this makes it harder for companies to invest in New York City, at a time when we need to be making it easier.”

The city council disagrees with Wright’s decision and will take appropriate legal steps to overturn the ruling, Jamie McShane, a spokesman for the council, said in an e-mail.

The case is Mayor of the City of New York v. New York City Council, 451369/2012, New York State Supreme Court, New York County (Manhattan).

To contact the reporters on this story: Chris Dolmetsch in New York State Supreme Court in Manhattan at

cdolmetsch@bloomberg.net; Henry Goldman in New York at hgoldman@bloomberg.net

To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net; Stephen Merelman at smerelman@bloomberg.net


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