New York and New Jersey Governors Sign the Healthy Terminals Act

In the wake of the ongoing COVID-19 pandemic, New York and New Jersey have adopted legislation to benefit airport workers. The Healthy Terminals Act in both states will boost wages and access to healthcare for airport workers working at the region’s three major airports—Newark Liberty International, LaGuardia, and John F. Kennedy International. These three airports are owned and operated by the Port Authority of New York and New Jersey, a bi-state agency which oversees regional transportation infrastructure.  

On March 25, 2021, New York Governor Andrew M. Cuomo signed the Healthy Terminals Act, which among other things, provides that covered airport workers will be paid no less than the prevailing wage rate and a “standard benefits supplement rate” of at least $4.54 per hour towards the cost of “minimum essential coverage” under an employer-sponsored benefits plan.1  The employer must also enroll each covered airport employee in an employer-sponsored health insurance plan. Beginning July 1, 2021, the commissioner may begin investigating violations of the law; effective immediately, however, the commissioner “may request documents or the preservation of documents relative to payroll and employee health plans to determine the applicable standards for full- and part-time work.”

On April 29, 2021, New Jersey Governor Philip D. Murphy signed the New Jersey version of the Healthy Terminals Act. New Jersey’s law also seeks to ensure that airport workers will be paid no less than the prevailing wage. As Governor Murphy stated when signing the legislation, “New York recently enacted a similar law…so taking this step on our side of the Hudson, is a matter of simple fairness….” The New Jersey version of the law goes into effect on September 1, 2021; thereafter, every covered airport or related located employer must pay a covered airport or related location worker the applicable prevailing wage for that worker. With respect to benefits, on August 1, 2021 and each August 1 thereafter, the commissioner shall designate the supplemental benefits rate and paid leave requirements.

Covered Workers

The Healthy Terminals Act in both states is quite expansive in that it covers many individuals involved in airport operations. The laws for each state apply to covered airport workers who spend at least one-half of their workweek at a covered location. For example, in New York, a “covered airport worker” is defined as a person employed to perform work at JFK or LaGuardia, who provides cleaning services (including building, warehouse, terminal, aircraft, and cabin cleaning), security services, baggage handling, catering, and airport retail and lounge services.2 In New York, employees are only covered if they worked an average of at least 30 hours per week as of December 30, 2020. Notably absent from this is Jamaica Train Station, which houses both the Long Island Railroad and Port Authority of New York and New Jersey’s Airtrain service.

In New Jersey, a “covered airport worker or related location worker” means any person who performs work “at a covered airport or related location” or “performs work related to the preparation or delivery of food for consumption on airplanes departing from” Newark Liberty International Airport and the Newark Liberty International Train Station.3 In contrast to New York’s, New Jersey’s law applies to workers at the nearby Newark Liberty International Train Station, which is home to New Jersey Transit and the Port Authority of New York and New Jersey’s Airtrain service.

Certification Requirement and Penalties

New York has also adopted a certification requirement that requires covered employers to submit a sworn statement certifying the total number of workers employed at a covered airport location who perform cleaning and related services, security-related services, in-terminal and passenger handling services, airline catering, or airport lounge services, at a covered airport location on December 30, 2020.  Furthermore, the sworn certification must calculate 80% of the total number of the covered employees as of December 30, 2020, which becomes a “benchmark” for that employer.  The sworn certification must contain a statement that affirms that the covered employer will ensure that the number of covered airport workers it employs at a covered airport location between July 1, 2021 and December 31, 2022 will not fall below the benchmark. In contrast, New Jersey’s law does not have a benchmark or certification requirement.

Both New York and New Jersey excluded “persons employed in an executive, administrative, or professional capacity” as defined by the federal Fair Labor Standards Act.

Additionally, both acts provide for penalties against a non-compliant employer. In New York, if the commissioner finds that any employer has violated the law, “a civil penalty of not more than ten thousand dollars for the first such violation within six years, not more than twenty thousand dollars for a second violation within six years and not more than fifty thousand dollars for a third or subsequent violation within six years,” may be assessed.  

In New Jersey, “the commissioner is authorized to assess and collect administrative penalties, up to a maximum of $250 for a first violation and up to a maximum of $500 for each subsequent violation, specified in a schedule of penalties to be promulgated as a rule or regulation by the commissioner.”

Differences Between the Two Laws

While the overall purpose of the law for each state is similar, there are some noteworthy differences. In New York, the industrial commissioner is vested with the authority to bring any legal action, including an administrative action, on behalf of employees who are not paid proper wages. In New Jersey, however, employees have the right to recover in a civil action the full amount of the prevailing wage for building services and covered airport or related location workers less any amount actually paid to the worker by the employer together with any fees.

The document preservation requirements in each state are also different. In New York, pay records must be maintained for at least six years from the date of payment, while New Jersey only requires records be kept for two years from the date of payment.

With respect to investigations, in New Jersey the commissioner appears to possess sole authority and discretion to launch an investigation “and ascertain the wages of any employees of a contractor or subcontractor furnishing building services for any property or premises owned or leased by the State, or of any covered airport or related location workers.” However, in New York, the commissioner may investigate “[u]pon a showing by an employee organization.” Thus, New York has seemingly granted unions broad power to seek support from the state whenever it believes there is any wrongdoing by an employer.

Looking Ahead

Given the purview of the Healthy Terminals Act in both New York and New Jersey, employers with airport operations must understand how these laws will affect them. Employers should continue to monitor any supporting regulations that are released to provide further guidance on each state’s law.

See Footnotes

1 The standard benefits supplement rate will only apply to the first 40 hours an employee works and will not apply to any overtime hours.

2 Non-covered employees include those who provide non-cleaning and security-related cargo services including ramp baggage and cargo handling, load control, ramp communication, aircraft mechanics who provide fuel, heating, cooling and power to aircraft, cabin maintenance; employees who provide ramp and tarmac maintenance; and non-lounge employees who provide concession and food service, such as waiters and cashiers who work at gift shops and duty-free stations. In addition, employees who work directly for the Port Authority of New York and New Jersey are not covered.

3 Non-covered employees included persons employed in an executive, administrative or professional capacity as defined in the Fair Labor Standards Act of 1938 and persons employed by a public agency, which means the following: (i) any department or agency of the State of New Jersey and any political subdivision, (ii) New Jersey Transit Corporation, and (iii) the Port Authority of New York and New Jersey.

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.