New York's Cooperative and Condominium Community
Bill Morris in Bricks & Bucks on March 9, 2022
Nearly 4,000 co-op and condo boards facing a daunting deadline just got some good news. For these boards, there’s a free tool called the Prevailing Wage Rate Calculator that will help them determine the prevailing wages and supplemental benefits for their building staffs. The boards then have until April 15 to make a major decision: Do we pay prevailing wages to our employees in order to keep the co-op and condo tax abatement — or do we forfeit the abatement and keep our payroll intact?
“There’s a big sense of anxiety out there,” says James Park, founder of SparkSuper.com, a third-party company that provides more than 50 co-ops and condos with supers, porters and handypersons. “Boards have a duty to all their constituents to get this right because there’s a lot of money at stake, and nobody wants to get caught up in an audit.”
SparkSuper.com works with some major property management companies — Akam, FirstService Residential, the Andrews Organization, Tudor Realty and MD Squared Property Group, among others — and when the April 15 deadline began to show up on their radar screens, Park saw a need for the spreadsheet-based Prevailing Wage Rate Calculator, which walks users through a series of simplified calculations.
“I created it because there’s a lot of confusion about the law,” Park says. “The text is vague. The Calculator helps boards and their managers understand that the prevailing wage is not just about the hourly pay rate. It includes supplemental benefits that are intended to cover such costs as health care, pensions, travel and training. Employers must also provide personal days, sick days, and holiday and vacation pay. Employers must cover all employees, union and non-union, for the cost of workers’ compensation, disability insurance and employer’s taxes.”
(Like what you're reading? To get Habitat newsletters sent to your inbox for free, click here.)
The Calculator also takes note of an oft-overlooked factor that can have outsize consequences. “It breaks down employee costs by the hour, including the added cost of overtime,” Park says. “People don’t realize what overtime can do to their budget.”
Length of the employee’s service and size of the building are also factors in the math. So is the makeup of the building. Since the tax abatement is available only to shareholders and unit-owners who use their apartment as their primary residence, buildings with a high percentage of pieds-a-terres are likely to be less inclined to boost payroll costs to retain a perk that benefits a limited number of residents.
The prevailing wage and supplemental benefits schedule is posted each year by the city Comptroller. Boards that wish to continue receiving the property tax abatement have until April 15 to submit a notarized affidavit stating that they will pay prevailing wages for as long as they receive the abatement. Under a recent extension, the tax abatement will last until June 30, 2023. Beyond that, its fate is uncertain — which has added an extra dose of anxiety to many boards’ deliberations.
“I am hearing concerns about the longevity of the tax abatement,” Park says. “Once a board agrees to pay the prevailing wage, they’re stuck.”
The city has posted a list of nearly 4,000 co-ops and condos that must begin paying prevailing wages in order to continue receiving the tax abatement. Workers who belong to Local 32BJ of the Service Employees International Union already receive prevailing wages and supplemental benefits, while many non-union workers and some members of other unions do not. The average annual cost of a 32BJ doorman totals more than $96,000.
That’s a serious number, but Park has found that some boards are not put off by it. “Wage disparity is getting wider, and New York City is going to have to grapple with that,” he says. “Some board members I’ve worked with are OK with paying prevailing wages because it addresses social inequities. I’ve heard board members say they need to get health insurance for their super. It’s expensive, but that’s the elephant in the room.”
In the end, Park distances himself from each board’s final decision. “Whether they decide to forfeit the abatement or start paying prevailing wages, that’s their call,” he says. “With the Calculator, they’ll have the information to make an informed decision.”
Engage, enrage, ask questions and give answers with your community of board members. Submit your questions and comments here!
Co-op and condo board business broken down into bite-sized bits - 2 stories each week. Read now on all digital devices.
Learn all the basics of NYC co-op and condo management, with straight talk from heavy hitters in the field of co-op or condo apartments
Professionals in some of the key fields of co-op and condo board governance and building management answer common questions in their areas of expertise
Got elected? Are you on your co-op/condo board?
Then don’t miss a beat! Stories you can use to make your building better, keep it out of trouble, save money, enhance market value, and make your board life a whole lot easier!