Why Mayor Kenney could threaten to pull a water bill discount for Philly’s ‘eds and meds’

Mayor Jim Kenney just ramped up the fight over security guards’ wages.

In February, he gave Penn, Temple, and other universities and hospitals a July deadline to follow the city’s “prevailing wage” law that requires security guards be paid $15 an hour. Many of the 1,400 security guards covered by the law make $12 to $13 an hour.

The deadline came and went. Nothing happened.

Now, his administration is making moves to ensure it has the authority to pull the city’s 25% water bill discount for nonprofits if they don’t comply. Councilwoman Cherelle Parker introduced the bill for Kenney and it passed out of Council’s finance committee Tuesday.

Penn and its hospitals saved more than $2.2 million in water bill reductions in 2018, according to city records, while Temple saved nearly $600,000.

Penn has said it is in compliance with all applicable laws while Temple says it’s working with the Kenney administration to see whether the existing law applies to that institution.

It’s a surprising move from the Kenney administration, which has said that pulling city subsidies would be a last resort in the city’s mission to enforce the prevailing wage law. Though the administration has overseen passage of some of the country’s most cutting-edge laws to support low-wage workers, it has taken a softer tack on enforcement, shying away from revoking business licenses or levying penalties on businesses that violate city labor law. As of 2018, the city had never issued a fine on a business for not following a labor law, the city has said.

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“It’s always been our stance to work with folks first,” said Rich Lazer, deputy mayor for labor, “but if they’re not willing to work with us or come into compliance, then we’ll have the authority [to revoke their subsidy].”

Lazer would not say whether the city intended to pull the subsidies for the nonprofits that have yet to comply with the wage rules, saying he didn’t want to speculate on a law that hadn’t been passed yet. His office is investigating a prevailing wage complaint filed by 32BJ SEIU, the service workers’ union, which represents the security guards in question, against Penn, Temple, and other nonprofits.

While the city has never revoked a subsidy over the prevailing wage law, it has withheld payments in the construction industry for public works projects until a contractor shows that it’s paying a prevailing wage, Lazer said.

The bill reflects the growing clout of 32BJ SEIU, which advocated for the 2016 prevailing wage law for building service workers and has been fighting to get the law enforced in the last year.

The majority of the security guards covered by the law are employed by Allied Universal; 800 work in Temple and Penn buildings as subcontractors. Allied has said it is following the collective bargaining agreements in place.

The security guards’ wages are governed by a collective bargaining agreement, which will expire in September 2020 and sets wages lower than the $15-an-hour prevailing wage.

But the collective bargaining agreement states that the prevailing wage should override the wages in the contract, 32BJ SEIU spokesperson Julie Blust said.

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Wilma Liebman, a labor law expert and chair of the National Labor Relations Board under President Barack Obama, said the prevailing wage law should stand unless there’s language in the law or the collective bargaining agreement that says otherwise, and in this case there is not.

This battle over wages could also set the stage for the security guards’ contract negotiations, which will begin in summer 2020.

Why is the city going after Penn and Temple if the workers are employed by Allied Universal? It’s a common labor strategy to go after the lead business, such as Penn and Temple, rather than the subcontractor.

The prevailing wage law applies to more than these security officers. But because the building service workers at subsidy-receiving universities, hospitals, and stadiums, as well as the Pennsylvania Convention Center, Philadelphia International Airport, and the Philadelphia Regional Port Authority, do not have a union representing them, it’s unclear whether they are receiving the prevailing wage.

The Philadelphia Inquirer is one of 21 news organizations producing Broke in Philly, a collaborative reporting project on solutions to poverty and the city’s push toward economic justice. See all of our reporting at brokeinphilly.org.