With the backdrop of vacant office space and plummeting property values, landlords and unionized office cleaners reached a contract deal, avoiding a strike and leaving workers’ health benefits intact.
The Realty Advisory Board on Labor Relations and 32BJ SEIU on Thursday announced the tentative agreement for a new contract, just three days before the union’s current contract expires.
A strike loomed larger than usual this year, as the landlord group, citing their properties’ troubles, called for a lower-paid tier of workers and for union members to start contributing to their health care premiums.
The landlord group made similar demands before 32BJ’s contract expired in 2019. This year, however, RAB repeatedly emphasized the need for such changes given the dire state of the office market.
The union once again avoided these changes and secured an annual average wage increase of 3 percent over the four-year contract. The deal also includes a one-time $3,000 bonus and a 10 percent pension increase for future retirees.
32BJ President Manny Pastreich said the tiered employee system pushed by RAB was “a line in the sand that we drew and refused to cross.”
“The path to this tentative agreement was not easy,” he said in a statement Thursday. “Today we found a common path forward with the RAB that rewards workers appropriately and meets the moment for the New York City commercial real estate industry.”
Landlords will continue to cover 100 percent of workers’ health care premiums, which is rare in the modern economy. But their deal limits the cost of employer-paid health care benefits, keeping average annual increases to below 3 percent.
Those reductions will be achieved, in part, by excluding some of the most expensive hospitals and facilities from member plans.
It also includes an incentive program for voluntary early retirement and creates more shift flexibility for property owners dealing with decreased office occupancy on Mondays and Fridays.
“We’re proud to come to an agreement that reflects the economic realities that commercial real estate faces by creating the flexibility the industry needs to survive for the long term,” RAB President Howard Rothschild said in a statement.
The new contract, once formally approved, will cover 20,000 building service workers, including office cleaners, elevator operators, lobby attendants, maintenance workers and others. It will expire at the end of 2027.
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