A.G. Schneiderman Announces Settlement With Airport Contractor For Paying J.F.K. Skycaps Far Below Minimum Wage

On Wedenesday, Attorney General Eric Schneiderman announced a settlement with Alstate Maintenance LLC, a contractor operating at Terminal One of John F. Kennedy International Airport, for paying nearly 40 skycaps at an hourly rate far below minimum wage. The $925,000 settlement consists of about $625,000 in restitution and another $300,000 in damages, all of which will be distributed to workers. In addition to the restitution and damages, Alstate has agreed to a number of reforms moving forward to ensure that its workers are properly compensated.

“I am committed to combating wage theft wherever and whenever we see it,” said Attorney General Schneiderman. “I will fight the tough fights to ensure there is one set of rules for everyone, and that everyone who works hard and plays by the rules gets a fair shake. Airlines and the companies that operate our airports should make certain that the contractors they hire act responsibly. Together, we can send a strong message to anyone that would take advantage of low-wage workers: we won’t stand for it.”

Skycaps play a critical role in helping airport operations run smoothly. Whether it’s curbside check-in for departing passengers or helping arriving passengers get their luggage from baggage carousels to their cars, they also make travel easier for customers, particularly those who may need extra assistance.

The investigation began after several workers notified the Service Employees International Union Local 32BJ, which has been organizing airport workers, that they were not earning at least a minimum wage and the union contacted the Attorney General’s Office. In fact, between 2008 and 2014, Alstate paid the skycaps as little as $3.90 per hour, which fell far below the minimum wage (ranging from $7.15 to $8.00 per hour during the six years covered by this investigation). The rates paid by Alstate during most of this time period were even lower than New York minimum wage in 1991, which was $4.25/hour

"I was proud to lend my support last week to John F. Kennedy Airport Terminal One workers in their efforts to organize, and I am equally proud today to join Attorney General Eric Schneiderman in announcing this successful settlement with Alstate Maintenance,” said New York City Public Advocate Letitia James. “Many airport employees continue to be grossly underpaid, and it is particularly egregious that this contractor paid skycaps below the legal minimum wage. I join Attorney General Schneiderman in calling for change."

Hector Figueroa, president of 32BJ SEIU, said, “We are glad to see this group of airport workers getting justice, and thank Attorney General Schneiderman and his team for their dedication and hard work on this case and others. While today we celebrate a big victory, we know that too many other airport workers continue to be exploited by contractors who feel they are able to get away with cheating and short-changing their employees. That’s why we’ve been working with the Port Authority for a longer-term, permanent solution in which employers are bound by a contract and workers are protected by a union of their choice. We know justice for airport workers and jobs with dignity and respect are within our reach, and today is a big step forward.”

Although most skycaps receive tips, Alstate failed to qualify for a tip credit which would have allowed the company to pay workers at a lower hourly rate. Furthermore, even if Alstate had qualified, the meager rates paid to these airport workers were even lower than the legal tipped minimum wage would have been. (Allowable tipped minimum wage rates for skycaps during these years ranged from $5.40 to $6.05 per hour.)

In addition, Alstate did not reimburse these skycaps for the costs of laundering and maintaining their mandatory uniforms, as required by law. For skycaps, if the cost of laundering uniforms reduces their wages below the minimum wage, employers are required either to provide laundry facilities or to pay a weekly set amount to cover the cost of cleaning uniforms.

Along with payment of restitution and damages, the settlement requires Alstate to implement a number of reforms to come into compliance with New York’s labor laws.

Alstate has agreed not to claim a tip credit for its workers going forward, even though it has a legal right to do so. Should Alstate wish to claim a tip credit in the future, it must notify the Attorney General’s office and hire an Independent Monitor at the company’s expense to ensure compliance. Alstate also must designate a compliance officer who will be responsible for ensuring that wages are calculated and paid properly and will keep the Attorney General’s office apprised as to ongoing compliance.

The case was handled for the Attorney General’s Office by the Labor Bureau’s Assistant Attorney General Kevin M. Lynch, Assistant Attorney General Benjamin Holt, and Bureau Chief Terri Gerstein. The Executive Deputy Attorney General for Social Justice is Alvin Bragg.