New York State Passes Healthy Terminals Act

Seyfarth Synopsis: Over a year since it was introduced, the New York State Senate and Assembly recently passed the Healthy Terminals Act.  The Act, among other things, gives the government the authority to set prevailing wages and overtime rates for covered airport workers.  At this time, it is unclear whether Governor Cuomo will sign the Act.

Introduction

On July 22, 2020, after a year of sitting in committee, Senate Bill S6266D (also known as the Healthy Terminals Act) passed in both the New York State Senate and Assembly.  The purported impetus behind the Act was the number of airport workers who were uninsured.  The Act is heading to the Governor’s desk for his signature.  If it is signed, the Act will take effect on January 1, 2021.

Prevailing Wage

A key priority for worker groups lobbying for the legislation was to have a prevailing wage for covered airport workers.  If the Governor signs the bill, the “fiscal officer,” usually the Comptroller of a city, will determine the prevailing wage every September 1st beginning in 2021 “for the various classes of covered airport workers in the locality.”  “Wage” includes the “basic hourly cash rate of pay” and a supplemental benefits rate for fringe benefits, including “medical or hospital care, pensions or retirement or death compensation for injuries or illness resulting from occupational activity, unemployment benefits, life insurance, disability and sickness insurance, accident insurance, and other bona fide fringe benefits not otherwise required by federal, state, or local law to be provided by [the] covered airport employer.”  The obligation to pay prevailing supplements may be discharged by furnishing any equivalent combinations of fringe benefits or by making equivalent or differential payments in cash under the fiscal officer’s rules and regulations.

Overtime

The bill amends the existing Prevailing Wage for Building Service Employees law to include “covered airport employers” and “covered airport workers.”  Pursuant to this amendment, covered airport workers will be entitled to overtime at a rate not less than one-and-one-half times the prevailing basic cash hourly rate for work of more than eight hours in any one day or more than forty hours in any workweek.  N.Y. Labor Law § 232.

Covered Airport Employers, Employees, and Locations

The Act applies to “covered airport employers,” which is defined broadly to cover any entity employing any covered airport worker in an occupation, industry, trade, business, or service.  However, it does not apply to a public agency.  Notably, and although exclusions may come in through the regulatory rulemaking process if the bill is signed into law, the bill itself appears to cover air carriers and their employees.  The bill itself also appears to cover private-sector employers covered by collective bargaining agreements and does not explicitly allow for a waiver in collective bargaining agreements.

Covered airport workers include “any person employed by a covered airport employer to perform work at a covered airport location provided at least one-half of the employee’s time during any workweek is performed at a covered airport location.”  It does not include any person employed in an executive, administrative, or professional capacity as defined under the United States Fair Labor Standards Act.  Furthermore, it does not include any employees covered under the Public Work and Grade Crossing Elimination Work Articles of the New York Labor Law.

Finally, a “covered airport location” are the airports within the state operating under the jurisdiction of the Port Authority of New York and New Jersey.  This currently includes John F. Kennedy, LaGuardia, and New York Stewart International Airport.

Other Requirements

The bill contains extensive recordkeeping requirements associated with the calculation of the prevailing wage.  It also includes various contracting-related language requirements.

Employer Takeaways

Assuming that Governor Cuomo signs the bill, it is imperative for employers with air terminal operations to consider how this Act will impact them.  Employers should carefully consider whether they can avail themselves of various federal and state constitutional and preemption or other defenses.