CityViews: ‘Open Shop’ Approach to Development Threatens Safety

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Hudson Yards, is set to become an unprecedented development project in New York City's history.

West of Penn Station, the busiest transit hub in the Western Hemisphere, Related’s Hudson Yards, is set to become an unprecedented development project in New York City’s history. Hudson Yards will create 4,000 residencies and 100 shops in the largest private real estate development in the history of the U.S. It’s the largest development in New York City since Rockefeller Center. Related Companies’ Hudson Yards had tremendous potential to become a positive model for real estate development, but recent violations have given great cause for concern.

Workers’ compensation is a legal requirement and ensures that if a worker is injured at work, they can receive medical care and benefits for their injury. The system was created after the Triangle Shirtwaist Factory Fire killed 146 workers in New York City in 1911. New Yorkers were outraged by the needless deaths of so many, resulting in the creation of workers’ compensation, a no-fault system that protects workers who are injured on the job.

In New York State, all businesses, from clerical to construction and everything in-between, are required to have workers’ compensation. It’s been written into New York State Law for a hundred years. However, Related Companies affiliates recently violated this law and were debarred by the New York State Department of Labor for violations of Workers’ Compensation. On May 19, 2018, three Related Companies affiliates, including Related Management Co, Related Fund Management, and Related Partners were debarred – disallowing these companies to submit a bid or be awarded on any public work for a year, unless the violation is resolved.

Such disbarment, for a multi-billion dollar company like Related, is a huge red flag for safety advocates like those of us at NYCOSH, but is part of a trend among companies trying to avoid paying their fair share of workers’ compensation premiums. Could a company like Related not know that they were responsible for paying workers’ compensation, or were they willfully skirting the law to save a dollar?

In July 2016, Governor Andrew created a Joint Task Force on Employee Misclassification and Worker Exploitation to protect workers on the job. Low-road companies misclassify workers to avoid paying workers’ compensation, claiming that they are “independent” or “self-employed” instead of employees of the company. OSHA has indicated that misclassified workers face higher rates of injury and in New York State, almost one-third of construction industry fatalities were of “self-employed” workers in 2015.

Related’s safety offenses don’t stop there. Related has deprioritized safety at Hudson Yards by implementing an “open shop” model, which has allowed nonunion and unscrupulous contractors to operate on the site. The process of “outsourcing” by one general contractor to many different subcontractors is common practice in the construction industry, but Related has abused this model as a way to outsource its work at a lower price, exploiting workers in the process. Some of Related’s subcontractors have even had workers die on the job, like 32-year-old Mexican immigrant Luis Mata, who was fatally struck by a wooden plank on April 21, 2016 on a job contracted by a Related subcontractor.

Related affiliates’ violations of workers’ compensation law and careless subcontracting, combined with the well-publicized protests against the company for labor violations, creates a troubling picture. New Yorkers have fought and died to create top standards of safety and health in this City, but Related is operating as if they can create their own rulebook. Related needs to take responsibility for safety at Hudson Yards and create a development project that New Yorkers can be proud of, and at the very least to adhere to the most basic standards of safety.

Charlene Obernauer is the executive director of the New York City Committee for Occupational Safety & Health (NYCOSH).

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