Senate advances prevailing wage bill
Energy companies warn of rate hikes
June 14, 2010
On June 1 the Senate passed a bill that would mandate public utility companies pay industry standard wages to their maintenance and janitorial subcontractors. But the utility companies say passage of this legislation would result in higher energy costs for consumers.
The legislation, sponsored by Assemblyman Michael Gianaris, D-Queens, and Sen. Eric Schneiderman, D-Manhattan, would amend the state's labor laws to close what bill supporters say is a legal loophole that exempts all public utility service workers classified as independent contractors, such as building cleaners, drivers, food service workers, gardeners and security guards, from being paid the same prevailing wages as other employees in similar positions at public agencies and authorities.
The bill (A.10257-a/S.7096-a), which is expected by Gianaris' office to advance soon through the Assembly Labor Committee where it has been since April 21, would also establish criminal penalties for utility companies that do not comply.
Several downstate legislators made appearances at a service workers' rally at the Capitol in mid May. Most of those participating in the rally were contracted by ConEdison Co. to clean offices. They are organized under SEIU Local 32BJ.
"Si se puede," the workers yelled, "Salario justo," meaning yes it is possible, salary justice.
"Don't believe the smokescreen the utilities are going to throw at you," said Gianaris. "They talk about how much this is going to increase their costs … but let's also remember that when their workers are not making a fair wage, they are relying on public subsidies — for health care, for housing and for other things. That is passing the cost already onto the taxpayer, and that's something that we're going to seek to end by paying a prevailing wage."
Gianaris said it's disingenuous for utility companies to object to paying workers industry standard wages in the name of keeping energy costs low on one hand while paying corporate executives exorbitant salaries on the other and bringing in billions in profits.
"Con Edison is going to sit here and cry poverty about paying people enough to live in New York. They have no problem paying their executives five million dollars a year to live. They don't talk about the escalating costs of their executives' salaries," he said. "So they line their own pockets, they impoverish the people who work cleaning their facilities and they stick it to the rate payers over and over again."
Although not able to attend the rally, Schneiderman later called the exemption disgraceful. "It's a disgrace that public utility executives are making millions of dollars a year while contracted workers are living in poverty. This bill ends the exploitation of working families at the hands of unaccountable monopolies like Con Edison," he said.
Hector Figueroa, union secretary treasurer, said although most building cleaners in state agencies and authorities earn around $22 an hour, public utility building cleaners earn at most $8.50, sans benefits such as health or dental insurance. Figueroa elaborated on Gianaris' point about workers often receiving public assistance and Medicaid, which taxpayers are already paying for.
"Con Edison and National Grid are being indirectly subsidized by taxpayers because when they pay poverty wages to workers that they employ through contractors, what they in fact are doing is passing the bill to taxpayers because these workers rely on food stamps, are eligible for all sorts of programs, need to use the emergency room because they don't have any health insurance. That's simply not right," Figueroa said.
"There's no reason for this exemption. Period," said Assemblyman Andrew Hevesi, D-Queens. "As a member of the Energy Committee, I follow the rate cases of these public utilities. They are constantly asking for rate increases. Constantly. And for reasons that are not so good," he continued. "They have no problems and no qualms about going to the Public Services Commission and asking for rate increases. The very idea that they're going to put their foot down and say we don't even want to ask for an increase to pay people a prevailing wage is an outrage."
Assemblyman Richard Gottfried, D-Manhattan, a co-sponsor of the bill, said at the rally that the justification for eliminating this exemption is simple. "Workers in this country should be entitled to a fair share of the wealth that they create. And they should be entitled to enough wages to support themselves and their families with an opportunity to grow and be educated and be healthy and live a productive life. That's what this bill is all about," he said.
National Grid Vice President of Government Relations William Flynn defended the exemption in written opposition to the bill, stating, "These individuals do not work for the utility or on utility facilities and have no impact on system operations or reliability."
Patrick Stella, National Grid's Capital District spokesman, clarified this statement by saying that as subcontractors, the workers are not on payroll, and "on utility facilities" refers to equipment and infrastructure, not buildings.
Flynn said because utility companies are private businesses, the prevailing wage standard for public agencies and authorities is not applicable.
"This legislation would wrongly place public utilities into the existing prevailing wage law along with the state municipalities, public benefit corporations and public authorities. … This bill would define utilities as a public agency, similar to municipalities or state agencies such as the Department of Motor Vehicle, and apply associated requirements on privately owned utilities such as National Grid," Flynn said. "It is not appropriate to force the same requirements on a private business which are required of government bodies, especially when it will result in higher utility bills."
He continued on to say this legislation would add tens of millions in costs for the company, which would be passed on to consumers. "Lawmakers need to recognize that these types of legislative measures will have a direct impact on utility bills for the people and businesses of New York," he said.