This bill says that people have to be treated as people. (Applause.)
And this nonsense about socialism, you know, that was old-hat back in the 1930s, when new labor laws were established giving every worker the right to join a union to protect himself, because the employers are always more interested in profits than in people. (Applause.)
And no matter how low the wages are, it seems as if there is some employers that always try to get them still lower -- below the poverty rate. This bill is a humane, decent bill. If I had my way, it would be a much stronger bill. (Applause.)
Because I think -- all this bill wants to is to establish simple basic rules. It does not interfere with an 59 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 employer's right to discharge. If there's a union contract for cause and somebody, you know, has cause for dismissal, the union has procedures to protect the workers if that happens and the company has the right to fire. But we don't think it's right -- we don't really think it's right for, say, workers in a shop to be subject to the sudden dismissal and no rights whatever, just with the guise of changing a contract, which, I have to tell you, I'm always suspicious of that kind of change because we know that workers are put out of jobs. (Applause.)
And the new workers that come in generally get paid less, and that's the reason for the change. And that's why a bill 18 like this is government making sure that people are on a fair playing field. That's what we want to guarantee, that every worker at least know that he can't or she can't be suddenly dismissed with know no way of putting footed own the table. That's what this bill is all about. (Applause.)
In response to your remark 60 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 regarding the union to the nonunion, I can tell you that I was the property manager at the North American Building when the Arden Group bought it from the FDIC. It was previously owned by Meritor (ph.) PSFS when the bank failed in 1993 and the FDIC sold off its properties. And I can tell you that the reason for that change was because the Arden Group brought in a nonunion contractor. And they also bought the Architects Building at 17th and Sansom, and they went from union to nonunion. So I can tell you for a fact that it is at that time when it goes from union to nonunion that wages and rights and terms of employment are different.
No, sir. I left the Arden Group because I am not for the treatment of workers that way. But I also believe that it is up to the individual's rights. There are certainly rights that have to be maintained.
But don't you believe workers have rights that have to be maintained? 61 3/30/00 LABOR & CIVIL SERVICE - BILL 000108
Don't you think it's right for somebody to say, Why should I be arbitrarily out on the street? Because two businessmen signed a contract, I suffer and I lose my job, I lose my ability to support my family. How is that just?
'Cause all you argued for is -- you say we have to treat the owners right. How about the working people?
No, it's not a part of what is right or what is wrong. It's ninety days, it's -- who is to make this decision? What is right, what is wrong, what is the length of time, what is the wage --
That is the role of government. There are disputed issues. You feel that the only ones that ought to have any rights are the owners. Other people feel that workers have to be protected. In that kind of situation, it's up to government to consider all of the issues, to present a bill like what was presented here, to have public testimony. That's what we're 62 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 doing. And we say -- and we say that in society, everybody has a right to be treated fairly and workers ought to be treated as human beings and not as animals that can be thrown out on the streets at anytime. (Applause.)
Councilman Cohen, first of all, I'd like to say that BOMA, we also agree that workers should be treated like human beings, number one. Number two, I believe you're distorting our position here. Number three, that the socialism old hat probably still fits. It might be an old hat but it still fits.
Well, why don't you come here when we have a tax abatement for businessmen? Why don't you come here and say, "That's socialism"? Why are we giving government money away to these people? You don't do that. You applaud, you write us letters telling us to give them more money.
That's part of government 63 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 services. This is government interference.
So when it's for businessmen, it's government services. (Audience members jeer.)
This is government interference. The founding fathers wouldn't have it this way.
Thank you, Councilman. Are there any other questions? (No further questions.).
Thank you very much for your testimony. Next, we'd like to have Diana Ceresi and Anna Burger. (Witnesses come forward.)
And I'm Diana Ceresi. I'm Associate General Counsel of the Service Employees International Union, and I'm here to speak on behalf of the bill. I don't know that I can come anywhere near as eloquent as you all have been 64 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 speaking on the bill. You clearly understand the concerns of the members and workers here in Philadelphia. As other speakers have explained in the last few years, SEIU has become acutely aware of plight of contract workers in this city and nationwide. The workforce, the contract workforce, contract industry workforce is one that is characterized by greater than normal job instability, low wages, and loss of traditional employment rights. The result not only undermines individual employee morale and family stability, but also local community interest. Job instability means greater unemployment within the community, higher unemployment insurance cost to the employers, greater reliance on public service, including charity care and public hospitals and on welfare. And just as an aside, to answer a couple of the points that were made by the previous speakers, when we're able to get a union into a building, yes, we can make a difference in terms of providing some job stability, certainly increasing benefits and some wages, and that does 65 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 make a difference in the lives of our members. But it's not the only thing that we have a concern with, obviously. Even when you have a union in the building, we can have a contract or a building be sold out, as happened here, and the contract rights doesn't follow there. If the building is sold out, you have no protection, even if you have the union in the building. You don't get the notice. I can't speak to the specific master agreement here, but the loss of a building in terms of being sold takes it out of the master agreement, as I understand. Secondly, you heard a lot about going from union to nonunion buildings. Well, if you're going to have a workforce that remains there, you have a stable workforce that is union-represented at that point. You can retain that stability and you retain a union workforce in that building. And thirdly, I think SEIU certainly is on record, and I know Local 36 is, as wanting to protect all workers, not -- we believe that union contracts are the best way of protecting workers, but we are looking out for the interest of all workers. So it's not a question of union versus 66 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 nonunion; we're looking to protect everyone's interests here in supporting this bill.
Is it more or less like the prevailing wage aspect of other legislation across the country and in the city?
Is it more or less like prevailing wage legislation, as we've seen in other cities and in this one?
Well, of course, in City Council, in terms of what you're able to do. Across the country, it's the role of government to set up minimum standards, to set up protections for the employees who live in the city, protections of the citizens who live in the city. It's entirely appropriate for the City Council to do that -- like prevailing wage, to say, Look, we're going to have a minimum standard here in terms of -- we're going to have living wages. People can live in our city, they can work in the City and live in the City, based on the wages. And that's the same thing here. What you need to understand is that the 67 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 contract service industry is an anomaly within the employment context. It's not a traditional employer-employee relationship where you have mutual obligations, some sense of responsibility to one another. In this industry, you have -- each time all of contract let out, you create an intermediary so that you're one step removed. The building owner, building manager doesn't have to deal with those employees who clean its buildings, who provide services to that building owner or building manager because that's not its employees, it's the contractor's employees. It can close its eyes to those employees, it's hands-off. It has no responsibility for unemployment insurance, it has no responsibility for dealing with the employees when they're told they don't have the jobs. It doesn't have to think about them any further. Meanwhile, the service contractor, who's operating in a labor-intensive industry, with a low profit margin, has little control over the work that it has under contract. As you heard, there are 30-day notices under most of these contractors. A contractor can be kicked out 68 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 of building on a 30-day notice. They have little control over that provision. It's the traditional and common contract language in all of these building service contracts. And while the contractor is the one whose unemployment insurance rates rise when it is forced to let its employees go because of a lost contract, under the present system, it has no way of obviating this. A contractor who is given 30-days notice can rarely find another contract in time to move its employees over to that other contract. It only will do that if there's another contract that happens to open up at the same time, but that's very rare. And on the other hand, the successor has, under current law, no obligation to take on those employees. So what you have are experienced employed contract workers who can be put on the street, with no other recourse other than unemployment, and to start job hunting all over again. And you've heard, some people have to do this time and again. In a nonunion building, you can do it -- every month, it happened. You could change over every three months, you could change 69 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 over -- every six months, you could be out on the streets looking for jobs. I think what is important to remember is that the contractors, because of the low profit margin and the way that the work is undertaken, they don't retain a workforce if they move from place to place. People are put out on the street. When they go into a new building, they're hiring off the street; they're not moving their own people around. All we're asking here, though, is for some kind of a safety net, a life belt for these workers who essentially work an employment tight rope. They never know when they're going to be out of a job, they may have known these people, they may have known the building tenants for years, and they may be out on the street the next day, with no protection. Providing that life belt is something that communities around the country have been doing. There are laws, as you've heard, similar to this in other jurisdictions. C. that came into effect in 1994. C. C. residents relying on unemployment benefits.
Each time an employed worker is put out of a job, there is a drain on the unemployment insurance system. Even if through switching a contractor, it puts an unemployed worker into that job, the newly unemployed worker starts the whole system running again, starts the timing running again, and you're having a longer period of unemployment benefits running. So you may think that you're just reemploying people over again, but what you're doing is keeping the unemployment system going over and over again -- with the loss of morale, with a loss of confidence that happens when you go into unemployment and you've lost a job that you've had for quite sometime, and somebody else is doing the work that you know how to do. C. City Council was that the long-term effect of replacing contractors and displacing contract employees was a downward 71 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 spiral of base wages and benefits. When employees are constantly in fear of losing jobs, the risk of engaging in collective efforts to improve wages and benefits takes on an onerous proportion. If you try to improve your benefits, you may be out the door. You may be out the door because the building owner has decided, We're not paying any more and we don't want to hear anything about employees wanting more or wanting benefits, wanting health insurance, we don't want to face that. Under the current law, the building owner can do that and get rid of the contractor, and there's nothing that stops them. Low wages adversely affect communities, they strain public services and undermine the tax base. C. City Council also took into account that experienced workers are to be valued and not cavalierly discarded. Our experience has shown that contractor dissatisfaction and resulting replacement stems from inadequacies or inefficiencies in the way the contractor manages the contract -- not with the individual service workers. When it comes to the individual service worker, the public in general, and as you heard 72 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 earlier, values stability, not turnover. And I might add that the turnover ratio in union buildings is about 4 percent. I understand in this area, that in the suburbs, which are manly nonunion, the turnover is 400 percent. So you're really getting a tremendous turnover here in the buildings, and you need to maintain stability. The stability comes by keeping workers in place. 's law has been upheld by the courts. S. C. In a decision that addressed some of the very arguments that you heard earlier, it expressly rejected the argument that a successive contractor has a basic right to hire whoever they want, and that that right is inviolate, that no one -- no city government, no government at all can interfere with that right. The court noted that various laws already regulate employer rights and that localities are not precluded from enacting substantive employee protective legislation. I'd add that regulating employer 73 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 conduct in order to protect employees and serve the interests of the broader community is not novel. We have -- attached to my written statement are a list of some federal laws that have given priority -- employment protections to employees. Employers are not allowed to willy-nilly discriminate against individuals when they're hiring them. The hiring of child labor, and here in Pennsylvania, the hiring of industrial home workers is all regulated. Employers have to follow certain laws and they have to comply with them. The regulations already exist in a variety of areas, and adding this regulation would not add anything different than these other kind of regulations do in terms of protecting workers and affecting employers. C. law, there have been three lawsuits filed for the violations of the act.
I was lead attorney on two of those lawsuits, and I can tell you that the courts, although we were able to settle both of those lawsuits with both back-pay and offers of reinstatement, the courts had intermediary 74 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 decisions, interim decisions that supported the law. The law has been supported wherever it's been contested, and I am confident that if the law were passed here, it would meet whatever concerns the courts would have and would be supported here by the courts as well. Turning to the specific provisions of the law in front of you, I'll just address a few points in terms of the law. First, the law very simply sets forth the obligations of all parties. There's nothing vague here. Everyone is on notice of what they have to do. It's the cost of doing business, it's the expectation. People coming into the city, contractors coming into the city know well what they have to do. C. The law has been in place since 1994 and runs smoothly there. It's in place in San Francisco, I understand there's a similar one in Los Angeles. There are proposals throughout the country for similar legislation. Second, the law is carefully limited to address the real concern, avoiding unnecessary displacement and nonemployment without unduly limiting the right of contractors to manage their 75 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 business. The contractor is not required to hire any more workers than they need; the bill doesn't mandate that they pay certain wages, benefits, or other working conditions; and the 90-day retention period follows what most employers have in terms of a probationary period. What this bill will provide is a chance for a hired worker to be fairly evaluated on the basis of the actual work they perform, to have notice, to know and be able to prepare in case they are going to be displaced, and to have that 90-day period. And as the earlier speaker said, ninety days, that's all we're asking. But also to give that worker a fair chance to be evaluated by the new employer. And a fair chance is all that the law requires. Third, the enforcement mechanism on this bill really is straightforward. It allows for a private right of action, it means the employees who are the most directly affected are the ones who can go into court and get enforcement of the law. , it's worked effectively there. A. and in San 76 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 Francisco. The further provision, conditioning business privilege license on compliance with the law, also doesn't serve to cause any undue hardship either to the employer or to the City. Certainly any employer that seeks to obtain a business license should be expected to comply with all laws. And the City should expect no less. It's simply a matter of requiring the employer to certify it's intent to fully comply with the law when seeking to obtain or renew a business license. If the employer lies in this regard, it should be held accountable. On your side, all you need to do is create a certification system, and the City presumably already has administered a mechanism in place that would allow for the review of denials or revocation, so it's not creating a new mechanism. This really is a very simple way of forcing the law. In closing, I would urge you to adopt this bill since it's the only way to effectively give contract service workers throughout the City some minimal assurance and measure of protection and job stability in what is otherwise a highly 77 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 volatile industry. Thank you.
Good afternoon. My name is Anna Burger. I'm the Executive Vice President of the Eastern Region for Service Employees International Union. And I want to thank you for this opportunity to testify. I'd like to also thank you for bringing me back home to my birthplace in Philadelphia. I actually signed a card in 1972 as a local union member of SEIU Local 668, and it was kind of where Philadelphia became my -- came was where the union became a way of life. There are a number of SEIU locals here in support of Local 36 today because we believe that it is important for to us support our sisters and brothers, the lowest wage workers in our society. I'd like to thank you, Chairman Clarke, or Councilman Clark, as the chair of the committee, and Councilman Angel Ortiz, as the Vice Chair, and all the committee members, for the support and clearly for your commitment and your 78 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 understanding of the issues. That's been very clear as I've sat here and watched your questioning of the witnesses and your involvement today. 3 million members that SEIU represents in the United States, Canada, and Puerto Rico, we are here to support this. We are a very diverse union. We represent health- care workers, public workers, social workers, office workers, utility workers, and building service workers. Our charter union members, the people who founded our union, were flat janitors in Chicago. It was they who began our union 80 years ago. They worked 12 hours a day, they earned $10 a week. They were immigrants, they were people of color, they were women. They needed a union and they built ours. The world has changed since then and employer tactics have changed since then, but after listening to the employer testimony before, it seems that employer greed has not changed since then. We're here in Philadelphia, 14,000 SEIU 79 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 members, to support this. We believe that the 4500 building service workers in this city, the janitors, have some of the toughest jobs and some of the toughest working conditions in our country. They suffer the fourth highest injury rate in the United States, higher than laborers and factory workers. They are routinely required to use dangerous equipment with improper training, they are exposed to asbestos, hazardous chemicals, and blood-borne diseases is commonplace. In addition janitors' jobs, as you've heard, are precarious. Most cleaning contractors have a 30-day cancellation clause. It's simply a matter of an owner deciding to switch a contract because of a cheaper deal usually. And think about the implication for the worker. You've heard their pain and their suffering. They lose their job, they lose their health care, they lose their benefits, they lose their dignity. Now, in normal situations, if a manager gets fired, the workers below them don't get hired. It's only in this odd situation with cleaning contractors. There are workers who have long, 80 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 excellent records of doing a good job, who have relationships with their tenants and their tenants depend on them, and they're forced on unemployment or welfare through no fault of own. And that's why I'm here today, to support the Displaced Workers Protection Act of Philadelphia. It will only provide contractor services for workers in health care, food and beverage services, and building maintenance services, with just a little measure of security protection. We are not talking about legislating socialism; we are talking about a basic, simple measure of security and protection. As Diana said, similar laws were passed in Washington. C. in 1994 and in San Francisco in 1998. , in the District itself, and I am proud of that city as well. But come to Washington. C. There has not been an impact on the real estate boom in that city; it's doing better than ever before. And I believe that the Philadelphia economic boom will continue here as well.
Now, additionally, President Clinton signed an executive order in 1994 requiring 81 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 federal agencies to place a provision in their federal service contracts requiring successor contractors to offer employment to the workers employed by the private contractor. These examples illustrate the principle of workplace fairness, which is the essence of this bill that we're talking about today. This bill just requires building maintenance and food service companies that win a new contract to keep the employees of the outgoing contractor for a probationary period of ninety days. The incoming contractor is not required to retain more employees than it needs, and it may refuse to retain or it may discharge employers for cause. This is not an issue about free enterprise or government regulation or socialism. Buildings need to be cleaned. It requires 4500 workers to keep the buildings clean in Philadelphia. This issue is about justice and fair treatment for thousands of workers who help to keep our city clean. In this economic boom, in this real-estate market, where CEOs are now making 400 82 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 times what an average worker gets paid, it's not overly burdensome to give workers ninety days of security to the nation's lowest paid, hardest working employees. Why should these workers alone, among other workers, lose their lifeline of wages and health-care benefits just because a building owner switches contractors? Today you're heard from workers, you've heard their experiences, you've heard their pains, you've heard what it does when they're displaced. You've heard from tenants. I know that you've listened to them, I know that you believe their stories and you feel their pain. This is the story of janitors who work hours a day, making 16 sure that downtown buildings are clean and 17 sanitary. They work oftentimes when many of us 18 are at home with our families, they scrub floors 19 and toilets, they polish brass, they clean 20 windows, they empty trash, they dust, they 21 vacuum. They build up a relationship and re 22 trusted by their tenants. It is only right that 23 they should enjoy the peace of mind that they will 24 not be terminated simply because the company they work for loses a contract. 83 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 The passage of the Displaced Worker Protection bill will be good for workers and it will be good for Philadelphia and it will be good for all of our families. The act reduces unnecessary stress in the City's unemployment services and eliminates the economic and psychological harm done to workers terminated through displacement. 3 million members across the country, we urge you to pass this important legislation. We think that it would be good for all of us. Thank you. )
Thank you. I have a couple questions for Miss Ceresi. You made reference to the D.C. bill on several occasions. Can you answer a question about the number the employees in the D.C. bill? I understand it applies to companies with more than employees. And why was that number 25? 23 In addition, there appears to be no up-front 24 penalty, a financial penalty imposed on the 25 violation of that ordinance in D.C. Can you tell 84 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 me why that's in place?.
I don't recall the and 4 I need to look at that. I'm not sure how it was 5 that it came about to be 25. I know that there 6 was an earlier bill that applied to D.C. 7 government services, and it may have come out of 8 that bill and then just been adopted out from that 9 when they adopted it more broadly to apply to all 10 services. But I could get you an answer on that. 11
Yeah, because 12 that's substantially different than what we're 13 doing here in Philadelphia. 14
I can tell you that there 15 are a lot of buildings, though, that don't have 16 25, and that what you're talking about, you're 17 still talking about individual lives that are put 18 into jeopardy, individuals, and most of these 19 employers have more than 25 -- 20
That's fine. You 21 made the reference to D.C. and that's why I asked 22 the question. 23
Right, okay. And the 24 penalty provision, why don't we have it in there? 25
Why did D.C. opt 85 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 not to put an up-front financial penalty on violation of --
I don't it was think brought to their attention, quite honestly. You need to understand that D.C. was the first one to start the bill and SEIU was very much in support of the bill in D.C. It was probably one of the first ones in the country. We're learning as we're going. I can give you a reason why that penalty is important, and that is that the two lawsuits that I brought, while we were successful in them, one took a year and a half and the other one took a year to get to a conclusion. Meanwhile, there were people out on the streets who had lost their jobs, who had nothing during that period of time. We need to make it a strong enough bill 20 that people are not going to take it as a cost of doing business to violate it and then pay it letter. You need to have those provisions in there. I think both the penalty provision and the license provision are important ones for the City to maintain. 86 3/30/00 LABOR & CIVIL SERVICE - BILL 000108
If I may, Mr. Chairman. The aspect between the D.C. and Philadelphia is that in D.C., the individual worker has a private right of action. In Pennsylvania, that is not -- it is prohibited in Pennsylvania. And that's basically the difference. If you have a private right of action, you really can sue for damages and so on. And so the penalty for violation of the contact can be much broader than that $300 fine.
And I think that that is important, I think it's important to get the back-pay for the workers when they are injured, you know, when their rights have been violated. I think it's important that you get that. It's important to get reinstatement. I will tell you, one of the cases, the one that took a year and a half, in that year and a half, the contractor had been switched again. So getting reinstatement was a real problem 87 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 because it was -- the contractor who hadn't hired him had already been taken out, and then it was trying to get them back into jobs with a new contractor entirely, who had not been responsible for the earlier violation. So you need to have a strong enough mechanism in there to keep people from doing this. There will be employers who will do it. There will be building owners who will try to get around it by not giving notice, and there will be building contractors who will -- you know, in one case, it involved a snowstorm and they said they should have come in and applied again as new hires on a snowstorm day and because they didn't get there, they lost their jobs. You need to have a strong enough reinforcement mechanism in addition to the right of private action, and that's the one thing we did learn out of D.C., was that without it, you end up with a year and a half --
So let me say that I misspoke. What we have is a City Solicitor's opinion really that says we might not be able to put in a private right of action. That's -- but we have in other cases and it has not been 88 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 overturned or challenged. The court supported it, even though the City Solicitor did not consider it.
Great. Well, I have to admit that I don't know the state law in terms of your charter and what you can do, but certainly, private right of action is certainly something that can be put into laws on a broad basis.
But that's the basic reason, in essence, why one penalty against the other, just in case.
Well, it's not just in case. It's really that you need both of them there, both to make the employees whole and to make sure that there's an additional leverage.
Any other questions or questions for the panel? (No further questions.)
Is there anyone else to testify on this bill today? 89 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 (No response.)
Seeing none, the committee shall stand in recess till the call of the Chair. The committee stands in recess until April 12th, at 1 o'clock. (Adjourned at 2:45 p.m.) - - - 90 C E R T I F I C A T E I HEREBY CERTIFY that the foregoing proceedings of the Council of the City of Philadelphia of Thursday, March 30, 2000, were reported fully and accurately by me, and that this is a correct transcript of same. RE: COUNCIL COMMITTEE ON LABOR AND CIVIL SERVICE BILL NO. 000108 __________________________________, JOSEPHINE CARDILLO, Registered Professional Reporter