Comp Time Limit Didn’t Interfere With Prevailing Wage Rights

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By Lawrence E. Dubé

The New York City Housing Authority didn’t violate state prevailing wage laws by limiting payments to retiring workers for their earned compensatory time, a federal district court in New York ruled.

New York prevailing wage laws guarantee that housing authority employees should be paid at or above the rates prevailing in the area for the work they perform. The court ruling showed unions that negotiate agreements and compromises related to prevailing wage rights may have to count on those deals to protect employees against governmental action that dilutes the value of employee pay or benefits.

United Association of Plumbers and Pipefitters Local 1 contended the housing authority diminished the value of the comp time and thereby reduced workers’ earnings below the prevailing rate required by law. The authority acted unilaterally and deprived the employees of their prevailing wage protections without due process of law, the union claimed.

However, Judge Paul A. Crotty of the U.S. District Court for the Southern District of New York rejected the union’s arguments. Local 1 signed a consent decree to settle a prevailing wage dispute with the city agency in 2015, Crotty said. Calling the decree Local 1’s “sole remedy for any claimed violation,” the court said the union couldn’t proceed on a constitutional due process claim under the 14th Amendment.

Rejecting the constitutional claim, the court said it didn’t have jurisdiction over additional claims brought under state law, and it dismissed the lawsuit in its entirety.

Comp Time Policy Challenged

Local 1 filed a complaint with the city in 2012, claiming that NYCHA employees were being paid less than the prevailing wage rates required by the New York State Constitution and New York Labor Law, according to the decision.

To resolve the dispute, NYCHA agreed that employees would be paid one-half hour of compensatory time for every overtime hour they worked, in addition to double-time pay.

NYCHA began paying the compensatory time, but it treated compensatory time as a form of annual leave. NYCHA allows retiring employees to exchange unused annual leave for money, subject to a cap of 504 hours. The city agency took the position the cap applied to compensatory time as well as vacation hours, meaning that employees weren’t guaranteed they’d be paid for all of the compensatory time they earned.

Local 1 alleged NYCHA’s action deprived employees of property rights without due process, but Crotty said the leave policy didn’t interfere with employees’ rights to receive the prevailing wage. “NYCHA’s policy limits how and when a Local 1 member exercises the Compensatory Time,” the court said.

The union also couldn’t base a constitutional claim on a supposed right to monetize compensatory time, Crotty said. Nothing in state law shows that employees are entitled to exchange compensatory time for cash, the court said. Writing the “New York State Constitution and NYLL are simply silent on Compensatory Time,” the court said Local 1 couldn’t show a violation of the 14th Amendment.

“We are pleased Judge Crotty agreed these claims had no merit,” Nicholas Paolucci, the New York City Law Department’s director of public affairs and press secretary, told Bloomberg Law March 7.

Attorneys for Local 1 didn’t immediately respond to a request for comment on the decision.

Colleran, O’Hara & Mills LLP in Woodbury, N.Y., represented United Association of Plumbers and Pipefitters Local 1. The New York City Corporation Counsel and Housing Authority Legal Department represented the housing authority and the city.

The case is Murphy v. Olatoye, 2018 BL 75619, S.D.N.Y., No. 16 Civ. 10012 (PAC), 3/6/18.

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