City Council poised to pass “body shop” bill

Measure requires labor brokers to get licensed

Council member Diana Ayala (Getty, Facebook via Ayala)
Council member Diana Ayala (Getty, Facebook via Ayala)

The average New Yorker has no idea what a labor broker is. But construction workers’ unions do.

Labor brokers supply workers — some just out of prison — to nonunion contractors who have eroded organized labor’s market share in the past two decades.

On Wednesday, the City Council will make life a little tougher for these brokers by requiring them to obtain a license from the city.

To get that license and renew it every two years, labor brokers must submit details on their corporate structure, hourly wages and benefits, proof of insurance and other information to receive a license.

Backers of the bill, including the laborers union, say it will protect workers.

The bill, sponsored by Council member Diana Ayala, attempts to single out so-called “body shops” — firms that unions have called out for providing workers with low pay and few benefits. (The legislation exempts general contractors, subcontractors and other professional employers.)

Unions and elected officials have criticized the worker-procurement firms for taking advantage of formerly incarcerated New Yorkers and other vulnerable populations, who are unlikely to call out poor working conditions and may have their probation revoked if they lose their job. A separate pending measure would hit general contractors with the same requirement.

Mike Hellstrom, president of the Mason Tenders’ District Council, said the measure is intended to put a spotlight on firms that disproportionately exploit workers of color.

“All the naysayers, we tell them to come into the 21st century and treat workers with dignity and respect,” the union leader said.

Supporters of nonunion construction see the City Council as a body that does unions’ bidding. They say labor brokers find work for people who often have no better options and little chance of getting a union construction job.

Sign Up for the undefined Newsletter

By signing up, you agree to TheRealDeal Terms of Use and acknowledge the data practices in our Privacy Policy.

The latest version of the bill excludes certain semi-annual disclosures demanded by an earlier draft, which included information on the race, ethnicity and gender of workers, as well as details on their wages and duration of employment.

The new version also omits language that would have let the city reject license applications from a company that lacks “moral character.”

The bill also increases the daily fine for companies that operate without a license from $200 in the earlier version to $500. It requires a labor broker to provide workers with details of their job assignment at least 24 hours before they start, if a contract is signed more than a day in advance.

The measure increases transparency around “shirt-changers” — companies that disband, then reform under new names.

“This industry has gone unregulated for far too long,” Ayala said. “[The bill] puts a little bit more pressure on developers to be more thorough when working with these outside agencies.”

The Real Estate Board of New York had supported licensing third- party labor service providers, but warned that any program should be “appropriately tailored in such a way as to not constrain the supply of labor for construction projects or impose burdensome obligations on workforce intermediaries who help connect workers to legitimate employment opportunities.”

REBNY also asked lawmakers to require the disclosure of information on whether workers reside in the city. Supporters of nonunion contractors say their construction workers are more likely to be city residents than their union counterparts.

Local 79 made “body shops” an issue as it determined whom to back in the mayoral primary. It initially endorsed Scott Stringer, the city comptroller. Mayor-elect Eric Adams has since joined rallies held by the union where “body shop” workers spoke out about conditions.

Over the years, unions have lost ground to nonunion general labor firms, especially in the construction of taller buildings. However, Local 79 has recently negotiated with developers, agreeing to wage concessions to win work.