After a 7-hour hearing on May 6, 2020, at which it heard from a wide variety of interested stakeholders, the New York City Council’s Committee on Civil Service and Labor has a lot to consider regarding the proposed NYC Essential Workers Bill of Rights.

As discussed in our previous Alert, the Bill of Rights is a legislative package that includes: (1) premium pay for non-salaried workers of essential businesses; (2) a requirement of “just cause” to terminate essential workers; and (3) expanded coverage under the Earned Safe and Safe Time Act (“ESSTA”) to include many independent contractors by incorporating the ABC test.

During the marathon hearing, the Committee, working virtually, heard from the Commissioner of the NYC Department of Consumer and Worker Protection (formerly the “Department of Consumer Affairs”), employees in various industries, employee advocates, small and medium business owners, trade industry representatives, and local chambers of commerce. The DCWP Commissioner and others, including several Councilmembers, cautioned against passage of the premium pay bill without a source of guaranteed funding (perhaps from the federal government). Even one of the sponsoring Councilmembers appreciated the burden this requirement might impose and seemed receptive to arguments that premium pay could force some businesses to close. Many representatives of non-profit organizations made a similar point, requesting that they be excluded from the mandate if government funding is not secured. Another Councilmember argued that the premium pay requirement would be tantamount to a minimum wage, which lies in the sole jurisdiction of the State Legislature.

Regarding the “just cause” termination provision, the sponsoring Councilmember clarified that it would be applicable only during the current pandemic, a point that was ambiguous in the text of the bill. Notwithstanding that important limitation, the DCWP Commissioner, although generally receptive to the bill’s intent, raised concerns about the agency’s ability to enforce it given current staffing constraints. Business representatives testified about the need for management flexibility, particularly in a time of crisis, as well as potential confusion with mandates in collective bargaining agreements.

The least amount of time was spent discussing the expansion of ESSTA leave to gig workers and other independent contractors. While some business representatives expressed concern that the broadened coverage could seep into other contexts and expand employers’ liability to independent contractors for minimum wage, overtime, and unemployment compensation, the sponsoring Councilmember made clear that the law would apply only to paid safe and sick leave. Most of the objections to this aspect of the bill focused on the general unfunded nature of the mandate.

These bills will now undergo consideration and possible revision in the Committee. Most of the Committee members did not tip their hands about their position on the proposals, but even those who appeared to harbor pro-worker sentiments seemed to appreciate the challenges that would be faced by small businesses if the bills were enacted.

We will continue to monitor developments as the “Bill of Rights” is vetted and considered.