State:

National
What is a living wage ordinance? A living wage is a pay rate above the minimum wage that is considered to be sufficient to meet basic subsistence needs in a particular geographic area. Contractors who do business with a city or county that has a living wage ordinance must pay their employees at least a certain hourly rate and comply with other provisions of the ordinance, such as offering health benefits, providing leave, maintaining adequate records, and/or posting notice about living wage provisions.
Note: President Obama signed an executive order raising the minimum wage for federal contract workers for all federal contracts beginning on or after January 1, 2015. The new minimum wage will be $10.10 per hour, up from $7.25 per hour.
Living wage ordinances apply primarily to certain service contractors (and sometimes their subcontractors) doing business with a city or county government, contractors who receive financial assistance from the city or county, and/or city or county employees. Some ordinances require that both part-time and full-time workers be paid the living wage, and some refer only to particular types of jobs, such as healthcare workers, food service workers, janitors, security guards, landscapers, or clerical workers.
Because some ordinances include provisions for automatic increases in the hourly wage rate on particular dates, or adjustments as a result of changes in the federal poverty level, employers should always determine the current requirements--even if they have done business with the same city in the past. Depending on the ordinance requirements, the city might be obligated to notify contractors of the change in writing before an increase takes effect.
Living wage ordinances are gaining in popularity. There are approximately 200 living wage ordinances in effect. Although a majority of those ordinances have been implemented in cities and counties, a handful of universities, school boards, and other jurisdictions have also adopted living wage ordinances.
Local grassroots organizations made up of coalitions of community and labor organizations, dubbed the national living wage movement, seek to pass local ordinances requiring private businesses that benefit from public money to pay their workers a living wage. Commonly, the ordinances cover employers that hold large city or county service contracts or receive substantial financial assistance from the city in the form of grants, loans, bond financing, tax abatements, or other economic development subsidies. Many grassroots campaigns have defined the living wage as equivalent to the poverty line for a family of four, with some newer campaigns pushing for even higher wages.
Increasingly, living wage coalitions are proposing other community standards in addition to a wage requirement, such as health benefits, vacation days, community hiring goals, public disclosure, community advisory boards, environmental standards, and language that supports union organizing. Often spearheaded by community groups, union locals, or central labor councils, living wage campaigns are characterized by uniquely broad coalitions of local community, union, and religious leaders. Because most current living wage campaigns seek to pass legislative measures, campaigns also include lobbying and negotiations with elected officials, such as city and county councillors, the mayor's office, and city staff. Living wage campaigns also provide opportunities for organizations that work to build a mass base of low income or working people to join up, organize, and mobilize new members.
Cities and counties that adopt living wage ordinances are striving to improve the lives of local working class families and stimulate the local economy. According to published reports, living wage critics argue that such ordinances are burdensome to employers, result in job losses, and lead to government budgetary problems. Proponents dismiss those arguments and say that the benefits of implementing a living wage ordinance outweigh its economic costs.
The end of ACORN. After almost 40 years of spearheading the living wage movement, ACORN (Association of Community Organizations for Reform Now) has closed shop because of political controversy.
A basic living wage ordinance is made up of various parts, including:
• Specification of the living wage level based on whether or not health benefits are provided
• Length of time the living wage is in force
• A listing of the types of employees that are covered (for example, city or county employees, contractors, subcontractors)
• A listing of whether full and part-time employees are covered; all employees of the employer or just those on contract, etc.
• Agency duties for monitoring and enforcing the living wage ordinance
• Penalties
A living wage ordinance may also include clauses on vacation days, sick leave, labor issues, training incentives, posting of job openings, and more.
Living wages and the ordinances that implement them vary by city. Not only do hourly rates vary, but other requirements do too. For example, some living wage ordinances apply only to certain types of workers, and some ordinances exclude small city contracts and/or set a particular threshold for contractors required to follow the ordinance's provisions.
Higher thresholds may apply for contracts with nonprofit employers, or nonprofits might be exempt altogether. For example, contractors doing at least $25,000 in business for a particular city in the same year may be subject to ordinance provisions. Nonprofit corporations, on the other hand, might not have to meet the requirements at all, or they might only have to pay a living wage if their annual contracts with the city exceed $50,000.
Information on living wage ordinances is readily available on some, but not all, websites for city governments that have such ordinances. If an employer cannot find the information on a website, that doesn't necessarily mean that there is no living wage ordinance. It's best to check with the department responsible for receiving bids, such as the city's Purchasing department.
Just as the living wage requirements vary by city ordinance, so do the penalties for noncompliance. Employers may be forced to pay the deficiency to employees, or the city may withhold payments to the employer. Willful and repeated violations of living wage requirements can result in a fine and/or termination of the current contract or grant, and possibly, future contracts for a specific amount of time.
Employers subject to living wage provisions may be responsible for submitting to the city a certified copy of their weekly payroll with such information as the name, job classification, Social Security number, number of hours worked each day (regular and overtime), total hours worked each week (regular and overtime), rate of pay including overtime rate, fringe benefit payments, all payroll deductions other than those required by federal, state, or local statutes, and the total amount earned during such period by each employee on the specific job.
Contractors subject to the provisions of a living wage ordinance often must post the applicable minimum living wage rate in a conspicuous place on the jobsite.
Some living wage ordinances specify the amount of paid and/or unpaid leave employees may take each year. Employers that don't provide health benefits may be required to pay higher wages to employees than employers that do offer benefits.
Additional information on living wage ordinances is available from:
Economic Policy Institute
1333 H Street, NW
Suite 300, East Tower
Washington, DC 20005-4707
202-775-8810
Last reviewed on June 16, 2014.
Related Topics:
National
What is a living wage ordinance? A living wage is a pay rate above the minimum wage that is considered to be sufficient to meet basic subsistence needs in a particular geographic area. Contractors who do business with a city or county that has a living wage ordinance must pay their employees at least a certain hourly rate and comply with other provisions of the ordinance, such as offering health benefits, providing leave, maintaining adequate records, and/or posting notice about living wage provisions.
Note: President Obama signed an executive order raising the minimum wage for federal contract workers for all federal contracts beginning on or after January 1, 2015. The new minimum wage will be $10.10 per hour, up from $7.25 per hour.
Living wage ordinances apply primarily to certain service contractors (and sometimes their subcontractors) doing business with a city or county government, contractors who receive financial assistance from the city or county, and/or city or county employees. Some ordinances require that both part-time and full-time workers be paid the living wage, and some refer only to particular types of jobs, such as healthcare workers, food service workers, janitors, security guards, landscapers, or clerical workers.
Because some ordinances include provisions for automatic increases in the hourly wage rate on particular dates, or adjustments as a result of changes in the federal poverty level, employers should always determine the current requirements--even if they have done business with the same city in the past. Depending on the ordinance requirements, the city might be obligated to notify contractors of the change in writing before an increase takes effect.
Living wage ordinances are gaining in popularity. There are approximately 200 living wage ordinances in effect. Although a majority of those ordinances have been implemented in cities and counties, a handful of universities, school boards, and other jurisdictions have also adopted living wage ordinances.
Local grassroots organizations made up of coalitions of community and labor organizations, dubbed the national living wage movement, seek to pass local ordinances requiring private businesses that benefit from public money to pay their workers a living wage. Commonly, the ordinances cover employers that hold large city or county service contracts or receive substantial financial assistance from the city in the form of grants, loans, bond financing, tax abatements, or other economic development subsidies. Many grassroots campaigns have defined the living wage as equivalent to the poverty line for a family of four, with some newer campaigns pushing for even higher wages.
Increasingly, living wage coalitions are proposing other community standards in addition to a wage requirement, such as health benefits, vacation days, community hiring goals, public disclosure, community advisory boards, environmental standards, and language that supports union organizing. Often spearheaded by community groups, union locals, or central labor councils, living wage campaigns are characterized by uniquely broad coalitions of local community, union, and religious leaders. Because most current living wage campaigns seek to pass legislative measures, campaigns also include lobbying and negotiations with elected officials, such as city and county councillors, the mayor's office, and city staff. Living wage campaigns also provide opportunities for organizations that work to build a mass base of low income or working people to join up, organize, and mobilize new members.
Cities and counties that adopt living wage ordinances are striving to improve the lives of local working class families and stimulate the local economy. According to published reports, living wage critics argue that such ordinances are burdensome to employers, result in job losses, and lead to government budgetary problems. Proponents dismiss those arguments and say that the benefits of implementing a living wage ordinance outweigh its economic costs.
The end of ACORN. After almost 40 years of spearheading the living wage movement, ACORN (Association of Community Organizations for Reform Now) has closed shop because of political controversy.
A basic living wage ordinance is made up of various parts, including:
• Specification of the living wage level based on whether or not health benefits are provided
• Length of time the living wage is in force
• A listing of the types of employees that are covered (for example, city or county employees, contractors, subcontractors)
• A listing of whether full and part-time employees are covered; all employees of the employer or just those on contract, etc.
• Agency duties for monitoring and enforcing the living wage ordinance
• Penalties
A living wage ordinance may also include clauses on vacation days, sick leave, labor issues, training incentives, posting of job openings, and more.
Living wages and the ordinances that implement them vary by city. Not only do hourly rates vary, but other requirements do too. For example, some living wage ordinances apply only to certain types of workers, and some ordinances exclude small city contracts and/or set a particular threshold for contractors required to follow the ordinance's provisions.
Higher thresholds may apply for contracts with nonprofit employers, or nonprofits might be exempt altogether. For example, contractors doing at least $25,000 in business for a particular city in the same year may be subject to ordinance provisions. Nonprofit corporations, on the other hand, might not have to meet the requirements at all, or they might only have to pay a living wage if their annual contracts with the city exceed $50,000.
Information on living wage ordinances is readily available on some, but not all, websites for city governments that have such ordinances. If an employer cannot find the information on a website, that doesn't necessarily mean that there is no living wage ordinance. It's best to check with the department responsible for receiving bids, such as the city's Purchasing department.
Just as the living wage requirements vary by city ordinance, so do the penalties for noncompliance. Employers may be forced to pay the deficiency to employees, or the city may withhold payments to the employer. Willful and repeated violations of living wage requirements can result in a fine and/or termination of the current contract or grant, and possibly, future contracts for a specific amount of time.
Employers subject to living wage provisions may be responsible for submitting to the city a certified copy of their weekly payroll with such information as the name, job classification, Social Security number, number of hours worked each day (regular and overtime), total hours worked each week (regular and overtime), rate of pay including overtime rate, fringe benefit payments, all payroll deductions other than those required by federal, state, or local statutes, and the total amount earned during such period by each employee on the specific job.
Contractors subject to the provisions of a living wage ordinance often must post the applicable minimum living wage rate in a conspicuous place on the jobsite.
Some living wage ordinances specify the amount of paid and/or unpaid leave employees may take each year. Employers that don't provide health benefits may be required to pay higher wages to employees than employers that do offer benefits.
Additional information on living wage ordinances is available from:
Economic Policy Institute
1333 H Street, NW
Suite 300, East Tower
Washington, DC 20005-4707
202-775-8810
Last reviewed on June 16, 2014.
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