An almost decade-long battle has seemingly come to an end. On October 9, 2020, an independent arbitrator ruled that New York City has to immediately pay half of the $900 million in back pay promised to teachers. While the UFT was hoping for all of the money to be paid in October 2020, the decision ordered city officials to pay the remaining $450 million in the first quarter of 2021. This ruling concludes the United Teacher Federation’s (UFT) efforts to get Mayor Bill de Blasio to fulfill a 2014 memorandum of agreement to provide back pay to current and retired New York City teachers.
A 2014 Agreement
During the 2008 and 2009 recession, teachers received lower pay increases than all other city officials. The October 2020 payment was the fourth installment to make up for the teachers’ lower raises in 2008 and 2009. Retirees, mid-career teachers, and teachers who began teaching in 2009 were eligible for payments ranging from a few hundred dollars to thousands of dollars in retirement payments. However, mid-career and early-career teachers had to maintain “continuous employment” until 2020 to be considered for this money.
Reneging on The Offer
The fourth payment was expected to be made on October 1, 2020. However, a New York city official reached out to UFT to inform them that they would be unable to pay the $900 million due to a fiscal crisis brought on by the coronavirus pandemic. Last Thursday, First Deputy Dean Fuleihan detailed the situation to UFT President Michael Mulgrew in a letter:
“As you know, the city is dealing with an unprecedented pandemic which has left the City in a State of Emergency since March of this year,” the letter went on to say, “The resulting budgetary impact on the City of New York, particularly without forthcoming Federal or State assistance, is both debilitating and not yet fully known,” it continues with “In light of these circumstances, the Department of Education is unable to make a lump sum payment to active and retired UFT employees as had been scheduled for this month pursuant to the May 1, 2014, Memorandum of Agreement.”
Fuleihan went on to express that making this payment when New York City is attempting to avoid mass worker layoffs would be “fiscally irresponsible.” Mulgrew responded with a statement that highlighted that Fuleihan and city officials knew this payment was due and that they were “going to meet the obligation.” Resultantly, on Friday, Mulgrew and Union officials took the disagreement to arbitration to reach a clear decision on payment.
A Hopeful Conclusion for UFT and Teachers
The independent arbitrator agreed with UFT and awarded the impacted teachers $900 million in back pay. Nevertheless, there are some stipulations to when the teachers can expect payment. The New York City government is ordered to pay half of the total amount now, and pay the rest by July 2021—or within the first fiscal year. The decision also came with the mandate that the city makes a “no layoff” pledge to members of UFT and still grants a three percent wage increase for educators in May 2021. The $900 million payment will go to 90,000 retired and active employees. Mulgrew acknowledged the limitations of the decision, but praised its acknowledgment of both the UFT and New York City’s concerns:
“This is far from a perfect solution for thousands of our members who are still owed deferred wages that can go back as far as ten years,” Mulgrew continued, “The decision recognizes the city’s difficult financial circumstances because of the coronavirus pandemic, but makes it clear that the city must find a way to meet its financial obligations to its educators.”
Before the decision, a letter from the UFT’s general counsel, Beth Norton, acknowledged the importance of this fight for the UFT’s union members. According to the Wall Street Journal: Norton said the UFT understood the city’s fiscal challenges, but members “have already worked for and been waiting for these payments for a decade.”
Across the country, the COVID-19 pandemic is negatively impacting most professionals’ financial outlook—especially teachers, as many are having to choose between their jobs and their safety. These difficulties have extended to New York City teachers at a time where COVID-19 infection rates are rising. Many of these 90,000 education professionals represented by UFT may be in a strained financial situation where a back pay payment can substantially make a difference during this pandemic. It remains to be seen how this could impact New York City’s finances. Still, Mayor de Blasio will undoubtedly have to do a balancing act of meeting this agreement while also trying to protect the city’s staff from mass layoffs.