Airport workers at John F. Kennedy (JFK), LaGuardia (LGA), and New York Stewart International Airport (SWF-Stewart Intl.) may soon be receiving increased wages and benefits under the Healthy Terminals Act (the "Act") (Senate Bill S6266D). Spurred by the COVID-19 related death of a JFK airport worker, the Act recently passed both the New York State Senate and Assembly. Next, the Act will be delivered to Governor Cuomo for his signature. Governor Cuomo has not indicated whether or not he will sign the Act. If signed, the Act will take effect on January 1, 2021.
Scope of covered individuals
The Act has a broad (and ambiguous) scope of coverage. The Act defines covered airport workers as any worker employed by a covered airport employer that works at least half of the workweek at a covered airport location. The Act exempts individuals who qualify for the executive, administrative, and professional exemptions under the Fair Labor Standards Act ("FLSA") or are covered under Articles 8 and 8-a of New York Labor Law, which applies to construction workers on New York City's public work and grade crossing elimination projects.
Covered airport employers are defined as any entity employing a covered airport worker (other than public agencies) and covered airport locations include any airport operating under the jurisdiction of the Port Authority of New York and New Jersey, which currently encompasses JFK, LGA, and SWF-Stewart Intl. The Act does not exclude air carriers and appears to cover not only air carriers, but also ground handling companies providing ramp, catering, and other support services.
Scope of covered wages and benefits
The Act compels covered airport employers to provide an unspecified, but likely substantial increase in wages and benefits for covered employees. Under the Act, cities will set a prevailing hourly rate for covered airport workers starting September 2021 and subject to annual revision thereafter. The Act also creates an obligation for covered employers to provide fringe benefits, such as health insurance, life insurance, unemployment benefits, and other benefits not required by federal, state, or local law. An employer can satisfy the Act's fringe benefits mandate by providing health benefits, cash equivalent of benefits (which unions represented to be $4.54/hour during their campaign for passing the Act), or a combination of benefits and payments.
Potential legal challenges
As currently drafted, the Act has an expansive scope and applies to air carrier employees as well as employees covered by collective bargaining agreements. At the same time, the Act appears to override existing bargained-for rates of pay and benefits. Given the potential impact of the Act, it likely will create another showdown between a state government and air carriers involving preemption challenges under the Railway Labor Act, the Airline Deregulation Act, and the dormant Commerce Clause.
Conclusion
All potentially covered airport employers should monitor the status of the Act and be prepared to take action if it is signed into law by Governor Cuomo. Reed Smith is ready to assist employers subject to the Act with compliance and/or any any legal challenges to the Act.
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