Testimony: How to Strengthen Workers’ Rights Across the New York City Workforce
Debipriya Chatterjee
Before the NYC Council Committee on Civil Service and Labor
Thank you for providing the opportunity to testify today on the issue of strengthening workers’ rights across the New York City workforce. My name is Debipriya Chatterjee, and I am a Senior Economist at the Community Service Society of New York (CSS), a nonprofit organization that works to promote economic opportunity for New Yorkers. We use research, advocacy, and direct services to champion a more equitable city and state, including strengthening workers’ rights.
We have championed workers’ rights, for 175 years. Most recently, we worked to pass paid sick leave laws statewide and in New York City, secured half-price transit fares for New Yorkers in poverty and made rent-relief available through the Emergency Rental Assistance Program, or ERAP. We also advocated, alongside our partners, for the passage of the package of bills that strengthened financial stability and improved workplace protections for food delivery workers.
Today, my testimony will be focused on the actionable recommendations for policies to advance and strengthen workers’ rights.
Why do we need to strengthen workers’ rights?
For most of the past half century, workers’ rights and workplace protections have been sacrificed by corporations seeking to maximize their bottom lines. Researchers at the Economic Policy Institute publish a graph, updating it every year, that shows that up to 1980, increases in workers’ compensation, i.e., wages and salaries, matched the increases in worker productivity, i.e., the contribution of their labor. But since late 1970s, there has been a marked divergence between these two series—while workers have become more productive, their compensations have stagnated. The result is ballooning inequality in incomes as corporate owners have been able to keep an increasing share of the ‘fruits of workers’ productivity’ as profits, enriching themselves.
One of the reasons behind this observed divergence, and consequently, in the observed inequality of incomes, is that workers’ rights have been eroded, their claims dismissed, their health and safety compromised, and their well-being ignored. The chart that I referred to, uses national data, but the same facts emerge when we look closer home: workers in New York City have been short-changed in similar ways because the four million strong city workforce is affected by the same anti-worker, deregulatory forces operating in the rest of the economy.
What are some of the ways in which workers’ rights are being weakened?
The primary channel through which anti-worker forces operate is through dismantling of unions and collective bargaining platforms. Research shows that de-unionization was a major factor in suppressing wage growth and fueling wage inequality, especially by depressing wages of workers without college degrees, women, and racial and ethnic minorities.
The second channel through which workers are further disadvantaged is the practice of contracting and sub-contracting out work and misclassifying workers, often intentionally, as independent contractors. This practice, described as "fissuring of work," enables employers to avoid accountability for violating labor standards, as well as deny employees benefits and protections enjoyed by regular employees. App-based gig workers are an extreme example of the fissured workplace, where each worker is an independent contractor and is thus ineligible for even the most essential rights and protections.
What are the harmful consequences of weakened worker rights?
The consequences of weakened labor rights are manifold, and they tend to have both short-term and long-term impact. Perhaps the most prevalent and deleterious consequence of weak worker rights is ‘wage theft’. Wage theft can take many forms- from denying employees the minimum wage standard, to not compensating them for overtime, to making illegal deductions from their paychecks (e.g., the cost of a uniform), to mishandling of tips. The annual toll of wage theft on low-income workers is estimated to be around $50 billion.
Beyond remuneration, weakened workers’ rights often imply inadequate and insufficient employer provided benefits and workplace protections. CSS’s 2021 Unheard Third survey[1] of low-income New Yorkers shows that around 37 percent of low-income workers (and around 60 percent of moderate to high-income workers) receive paid vacation and/or paid sick leave. The share of workers who received paid family leave to care for a newborn or a seriously ill family member was even lower at only 27 percent for low-income workers and 44 percent for moderate to high-income workers. While 60 percent of moderate to high-income workers had access to a retirement plan (pension and/or 401 (K)), the share of low-income workers with an employer provided retirement plan was only 28 percent. Employers provided employee health insurance coverage to only 37 percent of low-income workers (and 60 percent of moderate to high-income workers). The rates of employer provided health insurance coverage for the workers’ family were more dismal—a mere 26 percent of low-income working families (and 44 percent of moderate to high-income working families) received employer provided coverage. The recent pandemic and the public health crisis that ensued from employees lacking paid sick leave should serve to recenter and underscore the need for these protections for all employees.
Finally, weakened worker rights have enabled corporations to use "non-compete" clauses in contracts, engage in overt and covert discrimination against minorities and women, impose irregular and unpredictable scheduling, unfairly terminate workers, and force workers to settle outside of courts through mandatory arbitration. Each of these problematic practices can be further unpacked to reveal their adverse effects on workers and their families, especially among workers living paycheck to paycheck.
What should be done to strengthen workers’ rights?
While there are any number of policy changes that can be made to address each of the specific problems mentioned above, I would like to focus on the following ….
- Secure workers’ rights and benefits for all low-income workers, including app-based gig workers and ensure that all workers have access to paid sick leave, overtime pay, and unemployment insurance. The essential workers’ bill of rights that had been introduced in March 2020 by then Councilmembers Brad Lander (currently the Comptroller) and Ben Kallos, had aspired to address misclassification issues by calling on the State to standardize the use of the ‘ABC’ test in determining employee status, and had proposed paid sick leave for gig workers. We urge the Council to pass Intro 1926 which would expand the definition of an employee under the city’s paid sick leave law to cover gig workers and other workers misclassified as independent contractors who have been excluded from this important workplace standard.[2] Our 2021 Unheard Third survey found that 54 percent of workers dependent on app-based gig work as their main source of income said that they lacked paid sick leave, compared to 24 percent of other conventional employees who said they lacked this key benefit. CSS’s previous research on the app-based gig workforce has highlighted the consequences they face when they work without a single paid sick day: nearly 4 out of every 10 app-based gig workers we surveyed last year reported that they or a family member had been infected by COVID-19.
- Develop and publicly host a portable benefits model so the benefits would be tied to a worker rather than being tied to their job. This would allow workers to own and access their benefits regardless of the nature of their employment. The concept of portability is especially important for many low-wage workers who may have multiple jobs or change jobs more frequently, and such a system would allow workers to keep their benefits when they transition between employers or go through periods of unemployment/underemployment. Portable benefits is not a new idea—Social Security is an example of a program providing portable benefits. Mayor Eric Adams, when he was Brooklyn Borough President, had penned a powerful op-ed in the Daily News imploring the use of a portable benefits system modeled after the Black Car Fund, to cover freelancers and independent workers.
- Improve awareness and enforcement of existing rights and protections: Seven years after the city’s paid sick days law took effect, data from our 2021 Unheard Third survey shows that 42 percent of low-income workers covered under the law say that they still don’t receive paid sick time from their employer, more than double the share of those with moderate to higher incomes. The Department of Consumer and Worker Protection (DCWP), to its credit, has ramped up its public education and enforcement efforts in recent years, especially during the pandemic. In 2020, DCWP held nearly 200 worker-focused public education events and resolved 18 COVID-related sick leave violations that led to $42,000 in restitution for workers. But low awareness of the city’s paid sick leave policy persists nonetheless, and may be preventing New Yorkers from exercising their rights under the law. According to the 2021 Unheard Third, half of low-income workers we surveyed still haven’t heard about the city’s paid sick time law. Increasing awareness of new labor standards is a critical part of employer compliance because enforcement is largely complaint-driven and workers unaware of their rights are much less likely to file a complaint against their employer. For this reason, we urge the City Council to pass Intro 1797, a bill that would require DCWP to produce posters for voluntary ongoing display at pharmacies and health care locations around the city informing New Yorkers of their right to paid sick leave.
- Pass resolutions supporting state level legislations: The Council pass resolutions supporting the following legislations at the state level: (1) S734, introduced by Senator Biaggi that seeks to prohibit and restrict the most egregious uses of non-competes in the state; (2) S808/A2244, also introduced by Senator Biaggi and Assembly member Cruz, that seeks to eliminate sub-minimum wages for restaurant wait staff; (3) S1848A, introduced by Senator Hoylman that empowers aggrieved workers to file claims on behalf of the state against an employer for any violation of State labor law; and (4) to fully fund the “NY HERO Act” that guarantees workplace protections and hazard pay to essential workers as well as making it easier for small businesses to implement health and safety upgrades.
In addition to these recommendations, I would like to remind the Council that we need active and engaged attention to addressing the unique set of challenges facing women workers in the city. Women in paid workforce, primarily those in low-wage industries, are paid less than their fair share in compensation, while having to tolerate harassment and discrimination on a regular basis. The last two years have been especially challenging as women have had to balance work and caregiving, often at the same time while working from home. No wonder that one million women are still missing from the labor force, nationally, even as men’s labor force has returned to its pre-pandemic average. Thus, an immediate imperative to strengthen the city’s workforce and make it more productive is to address the childcare situation by providing quality, affordable care to the city’s next generation of denizens.
Thank you again for the opportunity to offer our comments. For more information or if you have any questions, please feel free to contact me at dchatterjee@cssny.org.
Notes
1. The 2021 Unheard Third is a scientific telephone survey of 1,762 New York City adult residents reached by cell phones and landlines from July 8th through August 10th, 2021. It was designed by Community Service Society in collaboration with Lake Research Partners, who administered it using Random Digit Dialing and professional interviewers. The sample included 1,110 low-income residents (up to 200% of federal poverty standards, or FPL), and 653 moderate and higher-income residents (above 200% FPL). Interviews were conducted in English, Spanish, and Chinese. The margin of error for the entire survey is +/- 2.3 percent, for the low-income component is +/- 2.9 percent, and for the higher income component is +/- 3.8 percent, all at the 95% confidence interval.
2. At the state level, Senator Robert Jackson and Assemblymember Deborah Glick introduced legislation (S6699A/A08721A) in 2019 that would reclassify more gig workers as employees using the ABC test. The bill has been re-introduced in 2021-2022 legislative session (S1999/A5772).