Jersey City Continues To Push For Progressive Benefits

Jersey City Continues To Push For Progressive Benefits

In February, Mayor Stephen M. Fulop signed an executive order immediately raising the Jersey City minimum wage to $15/hour.  About 500 workers in the city were affected by the boost.  This move catapulted Jersey City over San Francisco, Seattle, Chicago, Oakland, and Washington D.C., 2015’s top five cities with the highest minimum wage, to take first place in the nation.  While Seattle, San Francisco, and most recently, New York, also have $15/hour minimum wage laws on the books, these cities’ wages will be increased incrementally, not reaching $15/hour until 2018.

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Now, Jersey City’s City Council, backed by Mayor Fulop, is considering proposed Jersey City Ordinance 16.081.  The City Council voted 6-2-1 late last week to move forward with adoption of the ordinance.  The proposed ordinance would set a 30-hour minimum workweek for building services workers working in larger buildings.  The change would have two major benefits for these workers: it would require their employers to provide health care benefits under the Affordable Care Act and would allow them to accrue paid sick time faster under Jersey City’s Paid Sick Time.  Under the Affordable Care Act, employers must provide health care benefits to all employees considered “full time” under the act (30 hours/week).  Similarly, Jersey City’s Paid Sick Time ordinance provides that employees accrue one hour of sick time per 30 hours worked.

The ordinance’s introductory language states that the purpose is to protect the salaries and benefits of building services workers, by preventing employers from splitting fulltime jobs into multiple part-time jobs to escape the requirements of the Affordable Care Act.

The ordinance would only affect building service jobs: work typically performed by janitors, building housekeepers, concierges, porters, doorpersons, building superintendents, security guards, and handypersons.  According to the ordinance, workers in this category make up a large portion of Jersey City’s workforce.

There is no exemption from the proposed law for small employers.  The ordinance defines employers to include all individuals, partnerships, associations, corporations or other group of persons that (a) directly employs one or more building services workers; or (b) contracts or subcontracts for the services of at least one covered employee to perform building services work, if the employer leases, owns, or “controls” a covered location.

There is, however, a small building exemption. Only workers performing services at residential buildings with 50 or more units, and commercial buildings, colleges, universities, museums, or office complex over 100,000 square feet (either a single building or a continuous, commonly owned office park), are subject to the proposed ordinance.  However, that means if an employer owns only one unit, or leases only a fraction of a larger building, that employer’s building service employees in that building would be covered by the new law.

There is also a weekend service exception; an employer is not a covered employer if it only hires the employee to perform concierge or security services on Saturday and/or Sunday.

A workweek is defined as either a fixed 168-hour period or seven consecutive 24-hour periods, so that employers cannot avoid application of the statute by arbitrarily changing the workweek.

Employers also would be prohibited for retaliating against an employee or discriminating against an employee, for asserting his or her rights under the ordinance.

The penalties for violation of the ordinance would be set by existing City code sections providing that violations will subject employers to civil fines, potential community service, and possible criminal penalties.  The minimum penalty is set at $100 per day, to a maximum of $2,000 per “day”.  Given that a violation would not occur until an employee’s work hours fell below 30 in a week (excluding weeks in which the employee is taking leave pursuant to company policy, written request of the employee, or applicable law), the violation provision is somewhat confusing.  Presumably the violation would be triggered on payday (because the employer will have affirmatively been required to meet its obligation to compensate the employee for 30 hours per week), but employers unaware of the change could theoretically be fined as soon as it publishes a “short” schedule.  This is one point of potential clarification before the ordinance’s ultimate adoption.

The fines collected would be remitted directly to the aggrieved employee, as opposed to being paid to the City.  The ordinance would provide a private right of action for employees to take claims that he or she was “displaced” or retaliated against in violation of the ordinance court.  “Displaced” is not defined, but a logical reading would mean that a person is terminated because he or she asserted his rights under the ordinance.  This creates a bit of a difficult situation at least initially, as employers who currently employ a number of part-time building services workers would be forced to either bring all part-time workers up to 30 hours (which may be infeasible), or have to consolidate the work among fewer employees, once the ordinance is enacted.  The inevitable terminations could lead to claims by laid-off employees of “displacement”.

The ordinance does not provide for attorney’s fees and does not appear to authorize an employee to sue purely for penalties for noncompliance short of termination or retaliation.  The ordinance is silent on how the penalty provision for scheduling an employee less than 30 hours would be enforced.

Employers would also be required to post notices, and the Department of Housing Economic Development & Commerce would issue posters describing the employees’ rights and benefits under the ordinance.  Failure to post notices would subject employers to an additional fine of $100 for each employee not given appropriate notice plus $500 for each location where no notice was posted.

While the ordinance will result in more hours, faster sick time accrual, and health care benefits for some employees, other employees’ part-time jobs are likely to be eliminated altogether if the ordinance is enacted.  Many employees unable to find full-time work rely on stacking part time jobs.  For example, a person working 24 hours as building security at one location Monday through Friday, and 16 hours of weekend security at another location, currently would not receive employer-provided health care benefits, but he or she would be making $600/week and accruing 1.3 hours of sick pay per week.  If the ordinance passed, the person could lose the weekday job (a loss of $360 in pay, and .8 hours of accrued sick time per week), while the weekend job would remain exempt from the requirement of the ordinance and still would not provide health-care benefits. It was this concern that caused a “nay” vote to be cast by Councilman Richard Boggiano.

The Jersey City Council targets an effective date of January 1, 2017.

Contributor:  Shauna N. Correia, Of Counsel | Weintraub Tobin