Will there be a strike?
That’s the question on the minds of many co-op and condo boards as most of the service workers in the buildings they run seek a new labor deal with the city’s Realty Advisory Board (RAB) on Labor Relations.
The current four-year contract for 32BJ workers – porters, handymen, doormen, and supers – ends on April 20. It deals with a host of hot-button issues, including pay rate, health care, and pension.
If contract talks stall, the most disruptive effect for local resident-owners would be a work stoppage. (In buildings with more than six workers, the contract for the super, or resident manager, is staggered to expire one month later. So he or she will be on the job in the event of a strike. The issue, though, that all buildings will face regardless of whether you have a super or resident manager is who will take out the garbage).
The relationship between the 32BJ Service Employees International Union (SEIU) and the RAB has historically proven to be productive, and both sides expect to reach a mutually beneficial agreement.“In every contract cycle, with very few exceptions over 75 years, we have come to an agreement,” says 32BJ SEIU union president Héctor Figueroa. “Our goal is not to have a strike or disrupt the work our members do.”
The more likely effect that the negotiations will have is on building budgets – and, in particular, on the price of labor. A new deal could mean increased wages and benefits for service employees, resulting in a bump in operating costs. When the last contract expired, in 2010, the union won a pay increase of nearly 10 percent over four years for the 30,000 doormen, porters, janitors, and supers it represents in 3,300 apartment buildings throughout the city. It did not make any significant concessions on benefits (see box, p. 15).
“In years when the contract expires, we build projections into each building’s budget for increases in salaries and benefits,” says Dan Wurtzel, president of FirstService Residential, a property management firm. “These are based on prior agreements and where things have been trending. Over the course of time, you get an idea what sort of increases are likely and what they’re going to cost each building. For the most part, we’re able to anticipate, within a certain range, what it’s going to cost.”
Planning for Bad News
Savvy boards and property managers have been preparing for a worst-case scenario for some time. In a few cases, these efforts began in January. Joan Konow, a principal in the management firm Key Real Estate Associates, usually swings into action about three months before a contract is set to expire. One of her first moves is to begin preparing a handbook of emergency contacts; this is given to all board members and front desks in the buildings she manages two to three weeks before a strike. This document also includes instructions on how to run the intercom and other building systems in the event outside workers have to be brought in to replace striking employees. Memos are sent to all residents one month before, notifying them that the current contract is set to expire on April 20. Updates are sent regularly as the contract talks proceed.
“Then we estimate a likely increase in the cost of paying for the building’s staff under a new contract,” Konow says. “Some boards will increase our estimate when making up a budget; others will decrease it.”
The second order of business is making contingency plans for staffing the building in case the workers go out on strike – which last happened in 1991, when the walkout lasted 12 days.
“We engage a security company to provide enough personnel to cover for the doormen,” says Konow. “We also print resident cards and mail them to each apartment, so the residents can identify themselves to these stand-in security guards.”
Alayne Berenson, Key’s vice president, urges boards to budget enough to cover the cost of hiring replacement staff for one week. “We end up putting up about $5,000 to $7,500 to cover security guards [to serve as doormen],” she says. “We need to have people available, and the security companies have to hire extra people because all of a sudden there might be a mad rush.”
Most security companies require a non-refundable set-up fee of several thousand dollars per building, and they also require buildings to pay for at least one 8- or 12-hour doorman shift. This latter requirement can be canceled if notice is given more than four hours before the strike deadline. In years past, though, negotiations have tended to go down to the wire.
“We engage non-union, third-party companies to provide the necessary coverage at our buildings such as front door security and janitorial services,” adds Wurtzel, of FirstService Residential. “In many buildings committees are formed to organize resident volunteers who handle essential building services such as package acceptance and trash removal.”
Howard Rothschild is the president of the RAB, which represents property owners and operators. While he is optimistic about an agreement between the two sides, he says property owners have taken care of their workers, particularly through a difficult economy, since the last contract in 2010.
“Unlike in other industries, there were no industry layoffs or wage freezes,” says Rothschild. “Historically, our wage and benefit packages have outpaced inflation… and we want to continue to provide fair and equitable wage benefits.”
Rothschild will be negotiating with Figueroa, who reports to a 40- to 50-member negotiation committee. Figueroa won election as president of the 32BJ SEIU in 2012, capping a long career in labor negotiations. “Everything is going up in this city,” he says. “The subway is going up. Milk is going up. We want to see wages that rise with inflation.”
The two men have known each other for many years, and Rothschild says they share a good relationship. “I’ve found him to be a serious and responsible union leader,” he observes, “and I look forward to working with him in this negotiation.”
Meetings will take place roughly once a week until the deadline becomes threateningly close, when round-the-clock negotiation sessions may be necessary. Because the two lead negotiators know each other quite well, neither expects any big surprises.
Nonetheless, most managers agree it’s unwise to get lulled into a false sense of security simply because there hasn’t been a strike in more than two decades. They say it’s wise to plan well in advance and operate under the assumption that there will be a strike.
“You really do have to start preparing early,” says Konow. “You can’t wait till the last minute – even though that’s what both sides do in the contract talks.”
Wurtzel agrees. “In order to be properly prepared, you have to assume there will be a strike,” he says.
The REAL Cost Of A Union Employee
In the midst of concern over a possible 32BJ SEIU strike and a probable contract increase, unit-owners might be wondering what exactly they’re paying for when their building hires union employees. The short answer: a lot.
The expiring contract sets the salaries for doormen and porters at $44,390 per year; handymen and handywomen receive $49,000. But superintendents and resident managers do not have a union-approved base salary; instead, because of the extreme range in the size of residential buildings, their base salaries are decided by individual boards. Supers often also have additional benefits that other union employees don’t, such as an apartment in the building where they work, or a board-supplied car.
While the base salaries are for the most part set by 32BJ, boards are allowed to give raises and offer bonuses to their union employees at their discretion. The union has no official policy on the matter, calling it a “personal” relationship between the board and its employees.
The union benefits package, however, is not up for debate. It is the same for every union member, and each employer is required to help finance the union benefits fund (actually five individual funds):
Health provides coverage for hospital visits, medical treatment, mental health care, and substance abuse counseling/treatment. Also covers drug prescriptions, dental care, vision care, life insurance, and disability benefits.
Training offers free classes to help members advance in the industry, either through initial training or by working to improve existing skills.
Pension guarantees an income after they retire.
SRSP (Supplemental Retirement and Savings Plan) is a 401(k) savings plan that provides additional money at retirement (and to which employees are also encouraged to contribute).
Legal provides free lawyers to help union members with legal problems and questions.
The two biggest funds are health and pension; according to a property manager who requested anonymity, one building with nine union employees pays just over $1,100 per employee every month for health benefits, and $450 a month toward their pensions for each employee, compared to a monthly $16 for the legal fund and $14 for the training fund.
A review of the current contract reveals that health benefits make up between 66 and 70 percent of a union employee’s benefits package, while the pension is between 23 and 25 percent. The legal, training, and SRSP/401(k) funds make up a total of between three and eight percent.
Boards should be aware, though, that this benefits package does not include sick days, vacation days, holiday pay, or overtime, all of which have to be accounted for by the board when budgeting for a union employee. — Kathryn Farrell