City of Santa Barbara Living Wage Ordinance

Sections

1.      Title and Purposes

2.      Findings

3.      Definitions

4.      Payment of Minimum Compensation to Employees

5.      Application Criteria

6.      Contracting Out

7.      Maintaining Present Wages

8.      Retaliation and Discrimination Barred

9.      Earned Income Tax Credit Outreach

10.    Administration and City Enforcement

11.    Compliance

12.    Appeal Process

13.    Non-Profits

14.    Effective Date

15.    Severability

Section 1.  Title and Purposes

a.   This Ordinance shall be known as the City of Santa Barbara Living Wage Ordinance.

b.   The purpose of this Ordinance is to prescribe minimum levels of compensation and benefits to be received by City employees and by employees of contractors and subcontractors who work on contracts and projects funded by the City.

c.   This Ordinance also establishes that, as a matter of affirmative public policy and for the health, safety, and welfare of all City residents, the City of Santa Barbara has a responsibility to ensure that workers performing services for the City are compensated in a manner which enables them to move themselves and their families beyond poverty level conditions.

Section 2.  Findings

a.   Many employers in Santa Barbara benefit from the CityÕs public funds. The City awards service contracts to for-profit and non-profit employers; it provides financial assistance and funding that enhance economic development and job growth; and it expends grant funds that serve City, state, and federal government goals.

b.   Many Santa Barbara workers, including those employed by employers that receive public funds, still struggle to support families on income at or near the minimum wage required by federal and state law, often with no health benefits. This wage level increases poverty, strains City social services, and forces workers to live outside of the City.

c.   The City is entrusted to spend taxpayer resources wisely.  Expenditure of public funds for the procurement and provision of services is conducted most responsibly when it promotes a community economic standard intended to assure that City workers and their families can subsist above the poverty line, and when employees of employers receiving public funds are not forced to depend on City-funded social services because of inadequate wages.

d.   The health and welfare of all Santa Barbara citizens is enhanced when Santa Barbara workers are paid a wage that enables working families to lift themselves out of poverty without having to rely upon charity and government subsidies.  A decent standard of living for Santa Barbara workers benefits the entire community, contributes to economic prosperity, and promotes human dignity.

i.     Employees earning a living wage and health benefits experience increased self-sufficiency, easing the burden on taxpayer-funded social services;

ii.     Widespread access to health insurance enhances public health overall;

iii.    Promoting a living wage is sound economic development policy.  Increasing consumer income invigorates neighborhood businesses, revitalizing the economy by enabling broader participation in economic exchange;

iv.    Healthy and well-paid employees are more productive and reliable workers and are therefore better able to provide high-quality services to the City and its residents. Payment of higher wages is associated with greater business investment in employee training, higher productivity, and increased employee retention;

v.     Especially in light of the housing market in Santa Barbara, higher wages enable workers to afford to live in Santa Barbara, which in turn benefits local merchants and realtors by encouraging the expenditure of City-earned wages on products, services, and rents within the City; and prevents excessive use of the highways and the environmental damage associated with large-scale long-distance commuting.

e.   The use of City funds to promote the employment of workers at a living wage will increase the ability of low-wage workers to attain sustenance, decrease poverty, increase consumer income, and reduce the amount of taxpayer-funded services provided in the City of Santa Barbara. 

Section 3.  Definitions 

a.     ÒCityÓ refers to the City of Santa Barbara and its Agencies.  
 
b.   ÒAgencyÓ shall refers to any agency, office, position, administration, department, division, bureau, board, commission, or other unit, affiliate, or subdivision of the City, and any other entity over which majority control is exercised by officers or employees of the City or by their appointees, or which awards contracts or financial assistance that is funded by the City.  This definition shall include the Community Redevelopment Agency.

c.     ÒCity Financial Assistance RecipientÓ (CFAR) refers to (i) any Òperson,Ó as defined below, who receives financial assistance from the City, as contrasted with generalized financial assistance such as tax legislation; (ii) a tenant or leaseholder of a CFAR who occupies property and uses equipment or property that is improved or developed as a result of assistance given to the CFAR and shall be covered for the same period as the CFAR from whom they rent; and (iii) For the purpose of this Ordinance, financial assistance includes monetary grants; rent subsidies; rental or lease agreements at below market rates; bond financing, financial planning, tax increment financing, land write-downs and tax credits; partial or complete forgiveness of loans; loans provided at below market interest rates, and any other direct or indirect financial assistance. City staff assistance shall not be regarded as financial assistance for the purposes of this Ordinance.

d.    ÒContractorÓ shall refer to any employer who enters into a service contract with the City.  This shall include all contracts where services are provided, unless the services are incidental to goods purchased . 

e.    ÒSubcontractorÓ refers to any person, not an Employee, that enters into a contract with (i) a contractor to assist the contractor in performing a service contract; or (ii) a CFAR to assist the CFAR in performing work for which financial assistance is being given by the City for the time they are working on a contract

f.     ÒEmployeeÓ means any person working on a contract, project or program funded by the City who is employed full-time, part-time, or on an hourly basis (i) by the City, or (ii) by a Contractor or Subcontractor who has one or more service contracts with the City; or (iii) by a CFAR or a contractor or subcontractor of a CFAR, for the time the Employee is working on the City funded project. (Managerial and supervisory employees shall not be considered Employees for the purposes of this Ordinance.)

g.   ÒEmployerÓ refers to the City of Santa Barbara, a CFAR, contractor, or subcontractor, and their assignees and successors in interest.

h.   ÒPersonÓ refers to any individual, proprietorship, partnership, joint venture, profit or non-profit corporation, limited company, trust, association or other entity that may employ individuals or enter into contracts.

i.   ÒService ContractÓ means a contract between a contractor or subcontractor and the City for the provision of services to the City or its residents. A contract for the purchase or lease of goods, products, equipment, or supplies is not a Òservice contractÓ for the purposes of this Ordinance.

j.   ÒTraineeÓ refers to persons enrolled in a bona fide job training program consistent with Federal law and designed to enable the employee to advance into a permanent position. For purposes of this Ordinance an individual person cannot be considered a trainee for more than a total of 6 months.

k.   ÒUnionÓ refers to a bona fide labor organization whose primary purpose is the enhancement of employeesÕ working conditions, including wages, hours, and other terms and conditions of employment.

l.     ÒImmediate familyÓ shall include parents, legal guardians, domestic partners, spouses, children, grandchildren, grandparents, siblings, aunts, uncles, mothers-in-law, and fathers-in-law

m.    ÒHealth Benefit Supplemental RateÓ refers to the differential in living wages paid by employers who do and do not provide health insurance to covered Employees.  The Health Benefits Supplement Rate shall initially be established at $2.00 per hour.  On January 1 of each year, the Health Benefits Supplemental Rate shall be upwardly adjusted in proportion to the increase, if any, as reflected in the Los AngelesÐAnaheimÐRiverside All-Urban Consumer Price Index for Medical Care during the preceding 12-months.  The City shall publish this rate each year.

Section 4.  Payment of Minimum Compensation to Employees

  1. a.    Wages.  Employers shall pay Employees a minimum wage of no less than the hourly rates set out in this Ordinance. The initial rate shall be thirteen dollars and forty cents ($13.40) per hour and health benefits, as described in this Section , or otherwise the Health Benefit Supplemental Rate of fifteen dollars and forty cents ($15.40) per hour shall apply.  At a minimum, these rates shall be upwardly adjusted every twelve months by December 1st of each year in an amount corresponding to the cost of living increase and medical care as reflected in the Los AngelesÐAnaheimÐRiverside All-Urban Consumer Price Index as published by the Bureau of Labor Statistics, U.S. Department of Labor.  
    1. Health Benefits.  Health benefits means 1) Employer-paid premiums for Employee health insurance and/or dependents where the covered EmployerÕs contribution to the health insurance package is valued at no less than the Health Benefits Supplemental Rate each hour worked as a covered Employee, and 2) sick and bereavement leaves described in this Section.
    2. Compensated Days Off.  Employers shall provide at least twelve (12) days off per year for sick leave, vacation, or personal necessity at the Employee's request.  Employees shall accrue one compensated day off per month of full time employment. Part-time Employees shall accrue compensated days off in increments proportional to that accrued by full-time employees. The Employees shall be eligible to use accrued days off after the first six months of employment or consistent with company policy, whichever is sooner. Paid holidays, consistent with established employer policy, may be counted toward provision of the required 12 compensated days off.
     
    d.    Employers shall also permit Employees to take at least an additional five (5) days a year of uncompensated time to be used for sick leave for the death or illness of the employee or a member of his or her immediate family where the Employee has exhausted his or her compensated days off for that year. This Ordinance does not mandate the accrual from year to year of uncompensated days off.

    Section 5.  Application Criteria

    a.   This Ordinance applies to:

    i.     any contractor or CFAR whose combined City contracts or financial assistance from the City exceeds $10,000 per annum, except as limited under sub-section b of this Section, and Section 13 (Non-Profits).

    ii.     all contracts entered into and financial assistance provided after the effective date of this Ordinance;

    iii.    all amendments to contracts consummated after the effective date of this Ordinance which meet the threshold requirements above or which extend the duration of a contract that meets the threshold requirements;

    iv.    supplemental financial assistance provided after the effective date of this Ordinance which assistance meets the threshold requirements above;

    v.     expenditures of funds entirely within the CityÕs control, and to other funds such as state or federal grant funds, where application of this Ordinance is consonant with the laws authorizing the City to expend such other funds;

    vi.    assignees and successors in interest of any contractor for services or related subcontractor or CFAR to which this Ordinance applies.

     

    b.   This Ordinance shall not apply to:

    1. employees employed as trainees or apprentices in a bona fide training program consistent with federal law, which training program is designed to enable the employee(s) to advance into a permanent position; this exemption applies only when the employeeÕs hiring or retention does not replace, displace, or lower the wage or benefits of any existing Employee.
    2. disabled employees (a) of a Contractor who are covered by a current sub-minimum wage certificate issued to the Contractor by the U.S. Department of Labor or would be covered by such a certificate but for the fact that the Contractor is paying a wage equal to or higher than the minimum wage; or (b) of a CFAR who work for room and/or board and nominal wages as part of a rehabilitation program operated by a non-profit public benefit corporation or similar unincorporated entity.
    3. Employees subject to a union collective bargaining agreement containing explicit language waiving the provisions   

    of this Ordinance in clear and unambiguous terms.

    1. City employees who have worked fewer than 520 hours.

    Section 6.  Contracting

    1. Work presently being performed by City employees shall not be contracted out unless the contractor pays employees performing the work the highest of (a) the living wage and benefits specified in this Ordinance, (b) the wage and benefits City was paying the employees immediately prior to the contracting out, or (c) the wage and benefits specified in an agreement between the contractor and a union covering the work in question.
    2. As part of any bid, application or proposal for any contract, or other funding arrangement with the City, the submitting Contractor, Subcontractor, lessee of City property or other City-funded Employer will (1) include an acknowledgement in a form acceptable to the City of the terms of this chapter and intent to comply therewith, and (2) include a statement to be certified to the satisfaction of the City that its employees are being paid a living wage as provided by the Ordinance or will be paid a living wage as provided by the Ordinance at the commencement of the contractÕs term or execution by the City, and (3) complete a form to be created by the City Manager indicating whether any charges, complaints, citations or findings of violation of law or regulation by any regulatory agency or court have occurred within the last ten (10) years, including but not limited to California DFEH, OSHA, Department of Industrial Relations (Labor Commissioner), EPA, and NLRB. 
    3. As part of any bid, application or proposal for any contract, or other funding arrangement with the City by covered Employers, responsible-employer bonus points will be awarded during the bid assessment and acceptance process, so that maximum points will be awarded to Employers who are found to be paying living wages to all of the EmployersÕ employees at the time of bid submission; half the maximum points will be awarded during the bid assessment and acceptance process to Employers who certify they will pay living wages to all of the EmployersÕ employees at the time of execution of the contract, including non-covered employees. Zero points will be awarded to Employers who will only pay living wages to covered Employees during the time the Employees are working on the contract. 

    Section 7.  Maintaining Present Wages

    Neither the City nor contractors, subcontractors, or CFARs shall use the wage standards in this Ordinance to reduce the wages paid to any person employed by the City or by the service contractors.

    Section 8.  Retaliation and Discrimination Barred

    It shall be unlawful for a employer or any other party to take any action against any person in retaliation for exercising rights protected under this Ordinance, or for making any formal or informal complaints either to the Employer directly, to the City, or to the general public regarding the covered employerÕs alleged noncompliance with this Ordinance.   Rights protected under this Ordinance shall include the freedom to inform others of their potential rights under this Ordinance, and to assist others in asserting such rights.  Protections of this Section shall apply to any person who mistakenly, but in good faith, alleges noncompliance with this Ordinance.  Taking adverse action against a person within 60 days of the personÕs exercise of rights protected under this Ordinance shall raise a rebuttable presumption of having done so in retaliation for the exercise of such rights.  Employers shall comply with applicable federal, state and local laws regarding retaliation for actions taken to enforce laws regarding conditions of employment.

    Section 9.  Earned Income Tax Credit Outreach.

    Employers shall inform Employees earning less than ($12.00) per hour of their possible right to the federal and state Earned Income Tax Credits (EITC), and shall make available to Employees forms informing them about the EITC and forms required to secure advance EITC payments from the Employer.

    Section 10.  Administration and City Enforcement

    The provisions of this Ordinance will augment the CityÕs normal and customary procedures for administering its contracts. The Office of the City Administrator shall monitor compliance with this Ordinance as follows:

    1. a.    Within ninety days after enactment of this Ordinance, the City Administrator shall review all contract forms to insure that relevant language and information will be included in future City service contracts and CFAR agreements, including language expressly prohibiting retaliation against employees who report alleged violations to the City, or who pursue compliance and remedies by private enforcement, as well as language required by contractors for certification in Section 6, above.
      2.  
      b.   All RFP's, City contracts and financial assistance agreements subject to this Ordinance shall contain the following two paragraphs or substantially equivalent language:
       
      ÒThis contract is subject to the Living Wage Ordinance, of the Santa Barbara Municipal Code. The Ordinance requires that, unless specific exemptions apply, all employers (as defined) under service contracts and recipients of City financial assistance, (as defined) shall provide payment of a minimum wage to Employees (as defined) of $13.40 per hour with health benefits or at least $15.40 per hour without benefits.  Such rate shall be adjusted annually pursuant to the terms of the Santa Barbara Living Wage Ordinance.
       
      ÒUnder the provisions of the Living Wage Ordinance, the City shall have the authority, under appropriate circumstances, to terminate this contract and to seek other remedies as set forth therein, for violations of the Ordinance.Ó

      Section 11.  Compliance

      a.    Complaints may be made by an Employee denied wages or benefits mandated under this Ordinance, an organization representing the interests of such Employees, a person charging retaliation or discrimination in violation of this Ordinance, or any other person adversely affected by a violation of this Ordinance.   Such complainant may file a complaint with the City, which shall have ninety (90) days to investigate.

      b.    Within the first year after enactment of this Ordinance, the City Administrator shall develop rules and regulations, following public hearings and the opportunity for public comment, for monitoring compliance by contractors, subcontractors, and CFARs. Such regulations shall include:

       

      i.            Provisions facilitating employee complaints, including a hotline, that a contractor, subcontractor, or CFAR is not complying with the requirements of the Ordinance or has retaliated or is retaliating against the employee for asking his or her employer to comply or for filing a complaint about compliance with the City or for submitting evidence in support of anotherÕs employeeÕs complaint;

       

      ii.           A process by which the City shall review, investigate within 90 days to resolve specific complaints about the employment practices of a contractor, subcontractor, or CFAR pertaining to this Ordinance, including informal, negotiated resolution and, where the violation continues, for referral to the City Attorney for enforcement action; provisions providing for expeditious investigation of such claims and, for those found to be valid, for the reporting of the violation to the City department or agency responsible for awarding the contract and, in serious violation cases, for referral to the City Attorney for enforcement action.

       

      iii.      A provision insuring that a complainantÕs or witnessÕs identity will not be divulged to the employer without the complainantÕs or witnessÕs written consent, and shall not prohibit employees from discussing City operations with any member of the City Council, nor prohibit reporting of violations, nor require complainants to give prior notice to any City manager, supervisor or council member of such report.  Such provision shall follow the spirit and the language of the California Whistleblower Protection Act. 

      c.   City enforcement action shall include, on a showing of good cause that the Employer has violated the requirements of this Ordinance and refuses or unreasonably fails to remedy the violation, all reasonable remedies to ensure compliance with the Ordinance, including, but not limited to: suspension or termination of City contracts, subcontracts, or financial assistance agreements, withholding of contract payments as they come due, issuance of an order declaring the employer ineligible for future City contracts until all penalties and restitution has been paid in full, a fine payable to the City in the sum of $500 per week for each Employee not paid the living wages required by the Ordinance, restitution of additional wages due, with interest, to affected Employees, and enforcement costs.  However, upon a finding of first violation by the City, the remedy of Òfine payable to the City in the sum of $500 per weekÓ shall not be available for such first violation by the City.

      d.   No criminal penalties may be imposed for any violation of this Ordinance.

      e.     A Living Wage Advisory Committee shall be created with representatives from stakeholders from business, labor, and religious communities.  Committee members shall be appointed by the Santa Barbara City Council.  The Living Wage Advisory Committee shall review reports prepared by staff regarding the effectiveness of the Living Wage Ordinance and its implementation, for both commercial and non-profit entities, monitor compliance with the Ordinance, and make recommendations to the City Council regarding policy issues pertaining to the living wage.  This Committee shall make a public report to the City Council at least semi-annually.  The City Administrator shall designate staff to facilitate the meetings, prepare agendas, minutes, reports and other necessary support to carry out the purposes of the Ordinance.

      f.     Annually for the first two years and biannually thereafter, the City Administrator shall conduct evaluations of the operation of the Ordinance and its effects, and shall present the findings at a public meeting of the City Council and to the Living Wage Advisory Committee. These evaluations shall address all areas necessary to allow the City Council to evaluate whether and to what extent the Ordinance is accomplishing its intended purposes including but not limited to the following areas: (i) employer compliance, (ii) the Ordinance is affecting productivity and service quality of contractors, subcontractors, and CFARs, and (iii) any costs or savings stemming from this Ordinance.

      Section 12.  Appeal Process

      a.   In addition to enforcement by the City as provided in regulations issued pursuant to Section 10, an employee claiming violation of this Ordinance may bring an action in Small Claims Court or the Superior Court of the State of California against his or her employer. Employees covered by the Ordinance shall be considered third-party beneficiaries thereof.

      b.   A covered Employee who prevails in such an action shall be awarded, in addition to any other available legal and equitable remedies, (i) back pay for failing to pay the living wage required by this Ordinance, (ii) the difference between the living wage without health care benefits and the living wage with benefits during the period in question for failing to pay medical benefits, (iii) reinstatement if requested by the Employee, and (iv) reasonable attorneyÕs fees and costs. Additional damages to fully compensate an employee, if appropriate under the circumstances, shall also be awarded.

      c.   An Employer found to have violated this Ordinance by the City or a court on a second occasion shall pay twice the amount of money found due under subdivision (b)(i) and (ii) above. An Employer found to have violated this Ordinance by the City or a court on a third occasion shall pay three times the amount of money found due under subdivisions (b)(i) and (ii) above and will be prohibited from participating in any future contracts, subcontracts, or financial aid or grants from the City.

      d.   The employee remedies set forth in this Section are not intended to be exclusive or a prerequisite to asserting a claim for relief to enforce any rights otherwise available including, but not limited to, an action for wrongful termination. 

      Section 13.  Non-Profits

      501(c)3 non-profit organizations shall be affected by the Ordinance as follows:

        1. Non-profits with a more than 4 to 1 wage differential between the highest paid staff member and the lowest paid staff member shall follow the CFAR criteria for coverage throughout this Ordinance, including the $10,000 threshold of Section 5 a ÒiÓ.
        2. Non-profits with 4 to 1 or less wage differential between the highest paid staff member and the lowest paid staff member shall have three years from the enactment of the Ordinance to phase in living wages for covered Employees.
        3. Hardship Waiver: The Living Wage Advisory Committee shall create a process by which a non-proft under ÒbÓ of this Section can apply for a hardship waiver on an annual basis to exempt the organization from compliance.  To receive a hardship waiver, a non-profit must demonstrate how the Living Wage Ordinance would create a hardship in their organization, and a plan to bring coverage up to the Living Wage within a specified time.

      SECTION 14.  Effective Date

      This Ordinance shall become effective thirty (30) days from and after the date of its passage.

      Section 15.  Severability

      If any provision of this Ordinance is declared legally invalid or unenforceable by a court of competent jurisdiction, the remaining provisions remain in full force and effect. To this end, the provisions of this Ordinance are severable.