Prevailing Wage Proposed for Human Services Workers by Contracts Chair Kallos, Council Members Lander and Rosenthal
Legislation Aims to Force City to Stop Contracting to Pay Human Service Workers Poverty Wages and Close Gender Pay Gap.
New York, NY – New York City provides services to millions of youths, seniors, homeless, and veterans in poverty through human service non-profits whose government contracts ironically pay workers poverty wages. Legislation proposed by Contracts Chair Ben Kallos and Council Member Lander, would raise wages for 200,000 human service employees working at non-profits who do business with the city by setting a prevailing wage rate. Once passed into law, the Comptroller would work with the human services sector to determine the average wage or adopt a collectively bargained wage for new contracts which would be required to provide this funding. Once prevailing wage rates are adopted, the city would be required to fully fund wage increases as part of new contracts, modifications, or renewals increasing overall funds to non-profits providing vital human services.
Undervalued & Underpaid: How New York State Shortchanges Nonprofit Human Services Providers and their Workers, released by the Human Services Council in 2017, found the following staggering statistics:
- Average annual pay for human services workers is $29,600 in New York City. Such pay is only about 40 percent of the average for all workers and falls far short of the income needed to meet United Way’s survival family budget needs.
- Human services workers in New York City are overwhelmingly women (over 82%) and four-fifths of which are women of color (80%). Across New York State they are well-educated — 41 percent have a four-year college degree and another 25 percent have an associates’ degree or some college — and most work full-time or close to full-time schedules.
- Inadequate pay is not just a problem for the lowest-paid human services workers. Average pay for middle-tier occupations such as social workers and substance and drug abuse counselors is 20 - 40 percent greater in hospital, school and civic organization settings than in primarily government funded nonprofit human services providers.
- Pay is so low that 60 percent of those working in the human services sector were utilizing or had a family member utilizing some form of public assistance benefit such as Medicaid or food stamps.
Currently we are operating in a system where social workers, case managers and other human service professionals sometimes even with advanced degrees earn significantly less than building services workers or security guards at the same organization. This occurs since some of the job titles that have benefitted most from prevailing wage laws have benefited these types of blue-collar workers who happen to be mostly male. This issue has added to the gender pay gap, since many of the job titles requiring a prevailing wage are dominated by men.
“A worker led recovery is essential to coming back stronger from coronavirus in an equitable way that invests in lifting people out of poverty and with them our city,” said Contracts Chair Ben Kallos. “With more New Yorkers in need during this pandemic than ever before, the best thing we can do to recover is to pay our human service workers on the frontlines the wages they need to play an active role in our city’s recovery. Thank you to the Human Services Council, Homeless Services United, and United Neighborhood Houses for the work of their sectors and calling attention to these inequities and guiding the way forward. I am committed to ensuring that the prevailing wage will not be an unfunded mandate, that these wages will be funded with the passage of this legislation, that this first step in our fight to raise wages, and that these vital non-profits not see cuts to other parts of their budgets to fund these wage increases. I will not rest until the Mayor must fully fund our non-profits and pay their workers a fair wage.”
“Every New Yorker should know that our government is paying essential human services workers poverty wages, and it is fundamentally and completely unacceptable,” said Michelle Jackson, Executive Director of the Human Services Council (HSC). “We need to establish a prevailing wage schedule with a real living wage for human services workers and finally require the City to pay fair wages to city-contracted workers. I'm grateful to Chair Kallos, the other sponsors of the bill, and all our partners in the sector for their commitment and hard work on this critical issue. We must stand by our essential human services workers and stand for pay equity.”
“Human service workers are essential workers, and especially during this pandemic, have gone above and beyond to care for and support the most vulnerable in our communities. Our city has shifted so many life-saving and life-enriching services to nonprofit employees, but we have failed to value the workers and the work as they are due. Establishing a prevailing wage for nonprofit human service workers will ensure that we hold our city accountable to our professed values and lay the groundwork for a more just economic recovery that centers workers,” said Council Member Brad Lander.
“In a fairer society, human service workers would be among the highest paid. As a city we should not be contracting with agencies that do not pay their workers well. At the same time, we need to fund contracts enough so that agencies can pay a prevailing wage. I am proud to co-sponsor this legislation to push the ball forward for all of our human service workers,” said Council Member Helen Rosenthal.
"Unemployment in the Asian American and Pacific Islander community is up by 6900%, leading to rising food and housing insecurity. There is an urgent need for culturally and linguistically competent social services to better serve New York City’s fastest growing racial group. A true worker-led recovery will prioritize those who are serving the most marginalized communities,” said Wayne Ho, President & CEO of the Chinese-American Planning Council (CPC). “We are proud to stand with Contracts Chair Ben Kallos and human services partners in calling for the City to establish and fund a prevailing wage for the human services sector to not only ensure a swift recovery but also strengthen jobs for essential workers."
"The human services workforce has always provided essential services to the City’s most vulnerable community members, and the essential nature of their work has only been highlighted by the pandemic. Yet, these heroes have been underpaid for decades due to underfunded contracts that do not allow human service providers to pay their staff what they deserve. Urban Pathways supports the City’s creation and funding of a prevailing wage for the human services sector, whose workforce is primarily composed of women and people of color, to ensure fair and equitable wages that uplift our workers and communities," said Frederick Shack, Chief Executive Officer of Urban Pathways.
"The essential workforce comprising the human services sector, which provides the City's most vulnerable with critical social safety nets, is itself now in need of its own net to survive. Pay equity for human services professionals is not only about a just path forward. Continuing to ignore the long-term citywide economic impact of partially funded City contracts, entirely eroding the nonprofit sector, will further devastate communities already in crisis," said Gregory J. Morris, President and Executive Director of the Stanley M. Isaacs Neighborhood Center.
“Settlement house workers have always supported New York City’s communities—and have gone above and beyond during the COVID-19 pandemic—but City contracts do not provide enough funding to compensate this workforce at the level they deserve. As the membership organization of settlement houses, United Neighborhood Houses is painfully aware that low wages hurts this essential workforce and calls on the City to address this growing problem. This legislation underscores the urgency for the human services workforce to receive fair compensation at long last,” said Nora Moran, Director of Policy and Advocacy, United Neighborhood Houses.
Most public sector employees in New York City have a prevailing wage set by the Comptroller. Private sector workers represented by a labor organization or working on most government public works also receive a prevailing wage. Certain service contracts have a living wage requirement which in some cases are actually exceeded by the minimum wage. For all other contracts the New York State minimum wage is $15 an hour.
In calculating the prevailing wage the New York City Comptroller Prevailing Wage Law Regulations (Rules of the City of New York, Title 44, Chapter 2, §2-03(b)(1)) specifies:
The Prevailing Wage and Supplement rates for each trade classification are based upon the rate of wage paid and supplements provided by virtue of a collective bargaining agreement between a bona fide labor organization and employers of the private sector performing public or private work, provided the employers party to the agreement employ at least 30 percent of the workers in the same trade or occupation in the city of New York. If it is determined that less than 30 percent of the workers in a particular trade or occupation in the city of New York receive a collectively bargained rate of wage and supplements, then the average wage paid and supplements provided to such workers in the same trade or occupation in the city of New York during the prior year is the Prevailing Wage and Supplement rate.
In the absence of a collective bargaining agreement the Comptroller would consider evidence from interested parties such as human service providers as well as wage and benefits data from the United State Bureau of Labor Statistics. Wage rate determinations would be open to challenges by interested parties such as human service providers.
The time line for implementation after passage, would see the law go into effect in 120 days during which time human service providers would be notified and the Comptroller would begin work to establish a prevailing wage schedule. Human service contractors would receive notice within 30 days of the new wage schedule. Finally, from the last notification, over 90 days there would be a rolling process for providers to work with the Comptroller and the Office of Management and Budget to amend their budget and contracts to reflect the prevailing wage subject to funding from the city.
In 2019, the Campaign for Children, a broad coalition of 150 child care providers, the Day Care Council of New York, and District Council 1707 won a 5-year campaign for salary parity for child care workers with peers in the public sector, as chronicled by a The New School Center for New York Affairs. This historic victory was bolstered by a prevailing wage and representation for a significant portion of the sector by DC 1707 who were able to negotiate these raises for the entire sector.
Increases in wage rates for other human service workers are further away with no prevailing wages for most titles and wage rates varying widely between providers. The first step would be to pass this legislation to mandating a prevailing wage rate for human service workers that would not only set a floor for wages but result in increases for most. The second step would be to use the new prevailing wage rate for human service providers to negotiate directly with the Mayor for increases across the sector. If unsuccessful, the third and final step would be for providers representing 30% of a sector to sign a collective bargaining agreement which would set a new wage rate that would automatically become the new prevailing wage. As with the child care worker salary parity, this would be a three-party negotiation between human service providers, a union that would represent human service workers, and the city to guarantee this prevailing wage increase would be fully funded.
Starting in 2017, wage rate increases that sought to bring all human service workers a 9% cumulatively and set a floor of $15 an hour cost $279 million by this fiscal year. Cost to increase wages from the living and minimum wage to the Prevailing Wage would likely have a similar cost before collective bargaining.
This legislation follows years of work by several advocates including Human Services Council, Homeless Services United, and United Neighborhood Houses, along with several members of the City Council’s efforts to adequately fund the human services workforce and fighting to raise the nonprofit contract funding rates levels to cover the real costs of providing public services.