New York Governor Andrew Cuomo announced recently that nonessential construction is expected to restart in parts of the state, but before the state of emergency order is lifted, New York City Council wants to ensure essential workers receive hazard pay.
According to The Real Deal, a bill sponsored by Council member Laurie Cumbo would require essential businesses with more than 100 employees to give hourly workers an extra $30 to $75 per shift during the pandemic. Many forms of construction are considered essential, including affordable housing, infrastructure, work on healthcare facilities and work that supports other forms of essential business.
The General Contractors Association of New York expressed skepticism about how well the bill would work.
“While we understand the sentiment of this proposal, it would increase the cost of construction at a time when tax revenues are down dramatically and essential capital projects are being postponed and at risk of being canceled,” said Felice Farber, the association’s senior director, in a statement.
Brian Sampson, president of the Associated Builder and Contractors’ (ABC) New York chapter, said the additional costs would likely fall to owners due to force majeure clauses in contracts. But some smaller owners may struggle to cover those costs in the interim.
He also pointed to public projects that are not subject to collective bargaining agreements. The extra costs, he added, would be passed on to taxpayers.
Brendan Schmitt, a partner in New York City-based Herrick’s real estate department, said responsibility for additional costs would vary on a case-by-case basis, depending on whether the construction contract stipulated maximum costs for work. He noted that decreases in productivity from shutdowns of sites and from virus-prevention measures on those that remain open — will likely prove a greater cost burden than extra pay for workers would.
“The $60 is nothing to sneeze at, but it’s probably not going to move the needle in the way that social distancing rules have,” he said.