Testimony from Comptroller Brad Lander to the Department of Consumer and Worker Protection on Minimum Pay Rules for Delivery Workers
Thank you for the opportunity to testify. As the lead sponsor of Local Law 115 of 2021, I’m angry about the months-long delay in implementation, which violates the law and forces the delivery workers who kept us fed through the pandemic to wait even longer for an overdue pay raise. But I’m even angrier about the effort to hide a pay cut in regulatory double-speak, at the behest of corporate lobbyists for billion-dollar app companies. The Department of Consumer and Worker Protection (DCWP) must guarantee that workers are paid at least the minimum wage for every hour they work, including the time they spend waiting for their next trip.
On March 21, along with 25 local elected colleagues, I sent a letter to Commission Mayuga, which has been formally submitted into the record of rulemaking, expressing our deep disappointment in DCWP’s unacceptable decision to further delay the promulgation of a final rule, and to introduce substantial erosions that would codify a subminimum wage for deliveristas.
While DCWP staff worked hard to research and calculate a minimum pay rate in an effort to fulfill the requirements of the legislation and the worker-led campaign that led to its passage, the revised rule is a large step backwards. The Second Proposed Rule introduces new, troubling elements that undermine the goals of the original legislation. As a result, the average deliverista would receive far below minimum wage.
While DCWP attempts to present the “hourly wage” for workers as $19.96, after reductions for the entirely fabricated concept of “multi-apping” and the needless “phase-in” granted without merit in response to corporate lobbying, and after deductions of expenses, taxes, paid time off and workers compensation, the average base wage for 2023 would actually be $12.69.
New York State’s minimum wage reached $15 per hour in 2019. In 2019 dollars, the $12.69 on average per hour that deliveristas would take home under DCWP’s proposal is worth just $10.87 of goods and services in 2023. And deliveristas still do not receive health insurance or unemployment insurance. If you proceed with this rule, you will be codifying a subminimum wage for the some of the most exploited workers.
New York City has an opportunity to lead the nation by establishing a minimum wage standard that would adequately compensate delivery workers for their labor and their pivotal contributions to our city. I am encouraged by the seriousness with which DCWP initially undertook the required study of working conditions of third-party food delivery workers. I plead with you to return to the seriousness with which you initially sought to comply with the law. While you cannot restore the five months of wages you have illegally taken from delivery workers, you can adjust the rules going forward to restore fair pay to them.
The $3.60 pay reduction for the fabricated concept of “multi-apping” must be entirely eliminated. This proposal is not supported by the report, is inappropriate, and results in a guaranteed sub-minimum wage for many workers. Like for-hire vehicle drivers, who receive no “multi-apping” deduction in their comparable minimum pay rule, delivery workers may spend their on-call/waiting time with multiple apps open; however, during this time, no one is paying them. They need to be fairly compensated for their waiting time through an appropriate utilization rate applied to their trips. The revised rule fails to do that.
Likewise, the “phase-in” must be eliminated. There is simply no justification for allowing multi-billion dollar apps to continue to pay subminimum wages for the next two years, even after they have gotten away with for four years longer than everyone else. The rule would, for the first year, reduce wages an additional $2 below even the subminimum wage it provides. There is no justification for this. There was no “phase-in period” for driving apps under the TLC driver pay rule, and no reason to treat the delivery apps any differently.
In addition, workers must be paid for their individual waiting time rather than in the aggregate or based on an industry average; and the formula for COLA increases must be revised to account for inflation in business expenses as already implemented by the TLC. Only by making these revisions to ensure that deliveristas actually earn at least the minimum wage will DCWP fulfill its obligations under the law and show these essential workers the dignity they deserve.
It really is this simple: DCWP must guarantee that workers are paid at least the $15 minimum wage for every hour they work, after expenses, including the time they spend waiting for their next trip. That is not the revised rule you promulgated in response to corporate lobbying. But it truly should be the final rule you issue. Thank you.
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