New York Attorney General Eric Schneiderman announced a settlement last week with an airport contractor that was paying workers at an hourly rate below the minimum wage.
Alstate Maintenance LLC, a contractor operating at Terminal One of John F. Kennedy International Airport, paid nearly 40 skycaps at an hourly rate below minimum wage. Schneiderman’s settlement with Alstate totals $925,000, with $625,000 in restitution and another $300,000 in damages. All settlement money will be distributed to workers.
In addition to the restitution and damages, Alstate has agreed to a number of reforms moving forward to ensure that workers are properly compensated, including not claiming tip credit for its workers, even though it has a legal right to do so, and notifying the attorney general’s office and designating a compliance officer to ensure wages are calculated and paid properly, and keeping Schneiderman and company abreast on any issues.
Hector Figueroa, president of 32BJ SEIU, was quick to praise Schneiderman for his work.
“We are glad to see this group of airport workers getting justi23ce, and thank Attorney General Schneiderman and his team for their dedication and hard work on this case and others,” said Figueroa in a statement. “While today we celebrate a big victory, we know that too many other airport workers continue to be exploited by contractors who feel they are able to get away with cheating and short-changing their employees. That’s why we’ve been working with the Port Authority for a longer-term, permanent solution in which employers are bound by a contract and workers are protected by a union of their choice. We know justice for airport workers and jobs with dignity and respect are within our reach, and today is a big step forward.”
Skycaps help airport operations run smoothly, from curbside check-ins for departing passengers to helping arriving passengers get luggage from baggage carousels to their cars.
Schneiderman’s investigation began after several workers notified Figueroa’s union that they were not earning close to a minimum wage, and the 32BJ SEIU, which had been organizing airport workers at the time, contacted the attorney general’s office.
Between 2008 and 2014, Alstate, according to the attorney general’s office, paid skycaps as little as $3.90 per hour. The state minimum wage went from $7.15 to $8 per hour during the six years covered by the investigation. During most of this time period, Alstate’s pay rate, at $4.25 per hour, didn’t even equal New York’s minimum wage in 1991.
The contractor also didn’t reimburse skycaps for the costs of laundering and maintaining their mandatory uniforms as required by law, which reduced their wages to below minimum wage. Alstate also failed to qualify for a tip credit—most skycaps receive tips—which would have allowed them to pay workers at a lower hourly rate. Even if they did, it still would’ve been lower than the legal tipped minimum wage.
“I am committed to combating wage theft wherever and whenever we see it,” said Schneiderman in a statement. “I will fight the tough fights to ensure there is one set of rules for everyone, and that everyone who works hard and plays by the rules gets a fair shake. Airlines and the companies that operate our airports should make certain that the contractors they hire act responsibly. Together, we can send a strong message to anyone that would take advantage of low-wage workers: We won’t stand for it.”