To: Sonoma County Board of Supervisors
Department or Agency Name(s): County Administrator’s Office
Staff Name and Phone Number: Yvonne Shu 565-1739, Christel Querijero 565-7071
Vote Requirement: Majority
Supervisorial District(s): Countywide
Title:
Title
Amendments to Living Wage Ordinance
End
Recommended Action:
Recommended action
A) Consider potential amendments to the County’s Living Wage Ordinance
B) Consider whether to direct staff to pursue incorporation of living wage-related provisions with regard to certain workers at the Sonoma County Fairgrounds property through amendments to the Operating Agreement with Sonoma County Fair & Exposition, Inc.
C) Adopt a Resolution introducing, reading the title of, and waiving further reading of an ordinance to amend Sonoma County Code Chapter 2, Article XXVI, “Living Wage.” (First Read)
end
Executive Summary:
Over the past 18 months, staff has worked with the Living Wage Ad Hoc and Board of Supervisors to develop the following proposed changes to the County’s Living Wage Ordinance (LWO):
1. Continue to apply LWO wage rates to County employees, but otherwise removing them from LWO coverage;
2. Exempt emergency contracts;
3. Revise the formula and process for LWO wage rate adjustments;
4. Expand application to include certain lessees, licensees, concessionaires, and other users of County real property;
5. Add a requirement of 12 days paid time off;
6. Add a best-efforts requirement for offering work hours to existing part-time employees; and
7. Establish incentives for covered employers to retain existing employees during contract transitions.
Additionally, on September 12, 2023, your Board indicated consensus to repeal the existing labor neutrality provision contained in the LWO. The September 12th meeting was an intended first read of the revised ordinance to reflect all of the above proposals and revisions. However, on October 24, 2023, the Board requested that staff further explore how temporary workers at the fairgrounds could be covered under the LWO.
Today’s item considers options for including the temporary workers at the fairgrounds under the LWO and a first read of an amended ordinance.
Discussion:
Background
The County’s Living Wage Ordinance <https://library.municode.com/ca/sonoma_county/codes/code_of_ordinances?nodeId=CH2AD_ARTXXVILIWA_S2-373SHTI> went into effect on January 1, 2016. Whether to enact living wage requirements (typically, via local legislation) is a policy decision at the discretion of local jurisdictions for their communities; only some jurisdictions have a living wage ordinance. A living wage is different from a minimum wage, but they are often conflated.
Minimum wage is a general law regulating all employment in a covered jurisdiction and must be paid by all employers in a jurisdiction. It is the lowest allowable rate of pay per hour that can be paid to an employee. There may be different federal, state, county or city minimum wage rates. For example, the current California minimum wage is $16.00 per hour, and the City of Santa Rosa’s minimum wage is $17.45 per hour. With some exceptions, an employer must follow the highest rate for their employees.
Unlike minimum wage laws, living wage requirements most commonly apply only as a condition of a government contract. The County implemented its LWO with the intent, among other effects, to promote a viable wage for local residents employed on County contracts, putting County funding toward the livelihood of local communities and employees who work on County initiatives. The County’s current living wage rate is $18.10 per hour.
The Board of Supervisors discussed potential changes to the LWO and provided direction to staff at its October 18, 2022 and June 12, 2023 meetings. Those substantive amendments are summarized in Attachment 1. A further potential change received Board consensus on September 12, 2023, to repeal the LWO’s existing “labor neutrality” requirement contained in County Code Section 2-389. On October 24, 2023, the Board requested that staff further explore how temporary workers at the Fair could be covered under the LWO rate.
Sonoma County Fair and Exposition, Inc. (Fair)
The Sonoma County Fair & Exposition entity (Fair) is a non-profit 501(c)(3) organization and has an existing five-year operating agreement with the County. The Fair receives no regular General Fund support. Concessionaires and lessees pay the Fair for the ability to conduct business during the annual fair; revenue received by the Fair generally goes toward facility maintenance and operations, which benefits events held at the site throughout the year.
The Fair has approximately 400 temporary employees annually. It hires seasonal staff for the annual two-week fair through a variety of methods, including through temporary employment agencies. The temporary employees at the two-week fair are often local retirees and students.
The LWO (Sections 2-376(c) and 2-376.5(b) of the Sonoma County Code) exempts seasonal and temporary employees, defined as those who only work less than six months in duration (and less than twelve months for non-profits). Existing County law therefore exempts the Fair’s seasonal and temporary workers.
Options
Extending living wage protections to temporary Fair employees could be accomplished through either 1) the Living Wage Ordinance itself or 2) through the Fair Operating Agreement.
Option 1
Using the ordinance, apply the LWO rate to temporary employees of the Fair operator.
Section 2-376(c)(2) of the LWO exempts all employees “employed on a seasonal project which does not exceed six (6) months in duration.” Similarly, Section 2-376.5(b)(1) exempts employees of non-profits on temporary or seasonal projects under twelve (12) months in duration. The LWO could be amended to exclude the Fair’s seasonal/temporary employees from this general exemption, and also provide that said Fair workers would be entitled to payment of living wage rates. Extending living wage payment requirements would be practicable from an implementation perspective, whereas extending full LWO benefits to these short-term employees would be challenging and not typical employment practice.
Advantages
§ Surgically addresses Board’s concern.
Disadvantages
§ Potential differing treatment of seasonal/temporary employees, as this option would be an “exception to the exemption.”
Option 2 (staff recommendation)
Use the Fair Operating Agreement as the mechanism to apply LWO provisions at the Fair
Rather than using the LWO itself to require coverage of Fair temporary workers, a different approach could take advantage of the fact that the Fair relies on an Operating Agreement with the County for its use of the Fairgrounds. Living wage-related requirements could be included as conditions of the Fair’s use of the fairground property, to be memorialized in the Operating Agreement. Doing so acknowledges the unique operations and concessionaire arrangements at the Fair as different from most typical lessees and other users of County property. Provisions could be added to the Operating Agreement to cover treatment of Fair temporary workers, concessionaires and lessees, or any of the other Board-consensus provisions.
Advantages
§ By making LWO provisions a matter of contract, the Fair can more easily accommodate, budget, and implement as to covered workers and contractors. Given its planning and booking cycle, the Fair already has contractors and concessionaires booked for calendar year 2025 and 2026. Providing adequate time for implementation of any living wage requirements will accommodate business realities, existing arrangements and contracts. Also, applying living wage-related requirements via a negotiated contract provides a more flexible approach independent of the categories, exceptions, and other specifics of the codified LWO.
Disadvantages
§ The Fair Operating Agreement will require an update.
Considerations for Fair Operating Agreement approach
If your Board selects the “Operating Agreement approach” option, staff recommends the following provisions for inclusion in the Fair Operating Agreement:
A) Temporary workers of two-week fair event
The Fair would pay the temporary workers at their annual two-week fair event at least the County’s living wage rate.
B) Fair concessionaires and lessees
All lessees and long-term users (over 30 days) of the fairgrounds would provide living wage rates or rates plus benefits, on the same terms and conditions as all other lessees and concessionaires of County property (i.e., over $350,000 in gross receipts from all sources and over 25 employees in company size). Concessionaires and vendors of the two-week fair and other short-term events of less than 30 cumulative days would be excluded.
Rationale: Applying the LWO to employees of the two-week fair concessionaires and vendors could lower concessionaire participation and the quality of the fair overall, and the majority of these short-term concessionaires and vendors (and their employees) come from out of the area. Given the higher cost of expenses in the North Bay generally compared to other counties, and now potentially a requirement to provide LWO wages and benefits, participating in the County’s fair becomes less appealing for these very short-term vendors and concessionaires, and the Fair may be challenged to remain competitive among fair concessionaires and operators. The Fair’s amusements concessionaire is one of just a few operators in a very tight national market, and a review of the California Department of Food and Agriculture’s schedule of fairs <https://www.cdfa.ca.gov/FairsAndExpositions/Fair_Information/Fair_Dates_and_Information.asp> points to other events occurring at the same time as Sonoma County’s in 2024. Moreover, many of the goals and purposes of the LWO are not met in applying Living Wage requirements to the itinerant workforce of the fair-time concessionaires and other temporary users. Application of living wage requirements to lessees and concessionaires at short-term fairs is unusual, and it is not a requirement at the Cloverdale Citrus Fair, Petaluma/Marin Fairgrounds, Marin Fairgrounds, and San Mateo Fairgrounds, for example.
C) Fair service contractors
The Fair would require all its service contractors to provide living wage rates and benefits, as conditions of the contracts between Fair and those third parties.
Note: the situation of the Fair’s services contractors has not previously been considered by the Board for coverage under the LWO rate. Janitorial, security service, and manure haulers are examples of the types of service providers the Fair hires.
If your Board selects the “Operating Agreement approach” but does not concur with the recommended provisions above, direction is needed as to what terms and conditions to seek to include.
Anticipated Next Steps
If a First Read of proposed amendments is undertaken today, a Second Read will be scheduled as soon as feasible.
Adoption of the LWO amendments will launch a series of immediate next steps, including:
• Coordination with Purchasing and County Counsel to update relevant forms, identify processes that include LWO and update as needed;
• Development of communication plan and resources for County departments, contractors, leaseholders, concessionaires;
• Revision of the LWO questionnaire;
• Enhancing the model language template to include key ordinance provisions.
Strategic Plan:
N/A
Racial Equity:
Was this item identified as an opportunity to apply the Racial Equity Toolkit?
Yes
The racial equity analysis was included as an attachment to the 6/12/23 Board item <https://sonoma-county.legistar.com/LegislationDetail.aspx?ID=6252505&GUID=CF365D21-E62C-4178-8F19-52260A73F1D0&Options=&Search=>. Staff used the Government Alliance on Race and Equity’s (GARE) Equity Toolkit to provide a general equity analysis of the existing LWO. The County does not have an accurate way to collect the data needed for the detailed level of analysis required to understand local impact of the LWO on an individual or neighborhood basis, or as to how LWO impacts persons conducting business with the County. However, anecdotal feedback gathered from community-based organizations (CBO) and departments indicates that the County can simplify and clarify LWO and other procurement processes, which would help to lower transactional costs and burdens associated with contracting with or obtaining assistance from the County. This could potentially expand the pool and diversity of local organizations that would consider working with the County.
Prior Board Actions:
§ 12/12/23 Adopted resolution to increase the living wage hourly rate by 2.8% to $18.10.
§ 10/24/23 Discussed further changes to the proposed, amended ordinance.
§ 9/12/23 Adopted a Resolution introducing, reading the title of, and waiving further reading of the proposed ordinance amending Sonoma County Code Chapter 2, Article XXVI - Living Wage, The County’s Living Wage Ordinance.
§ 6/12/23 Provided direction to staff on Cost of Living Adjustment parameters, whether lessees and concessionaires should be covered under the LWO and how; and whether to add a paid time off requirement or other provision. Established periodic LWO rate review. Confirmed initial draft of proposed amendments.
§ 4/18/23 Adopted an uncodified ordinance to allow for a supplemental increase of 2.26% to the living wage hourly rate, for the required living wage rate to be $17.65 per hour, effective July 1, 2023. (Second Read)
§ 3/21/23 Adopted a resolution introducing, reading the title of, and waiving further reading of an uncodified ordinance to except certain requirements under the County’s existing Living Wage Ordinance and to allow for an increase to the living wage hourly rate by 2.26%, for the required living wage rate to be $17.65 per hour, effective July 1, 2023. (First Read).
§ 12/6/22 Adopted resolution to increase the living wage hourly rate by 2.74% to $17.25
§ 10/18/22 Received recommendations from the Living Wage Ad Hoc on proposed changes to the Living Wage Ordinance
§ 12/14/21 Adopted resolution to increase the living wage hourly rate to $16.75 and approved Living Wage Ordinance work plan
§ 9/21/21 Directed staff on areas of further analysis and evaluation for the Living Wage Ordinance
Fiscal Summary
Narrative Explanation of Fiscal Impacts:
None
Narrative Explanation of Staffing Impacts (If Required):
N/A
Attachments:
Attachment 1 - Summary of substantive amendments that previously received Board consensus
Attachment 2a - Amended (clean) version of Living Wage Ordinance
Attachment 2b - Red-lined version of the Living Wage Ordinance
Attachment 3a - Amended (clean) version of Living Wage Ordinance using the Fair Operating Agreement
Attachment 3b - Red-lined version of the Living Wage Ordinance using the Fair Operating Agreement
Attachment 4 - Resolution
Attachment 5 - Ordinance
Attachment 6 - Presentation
Related Items “On File” with the Clerk of the Board:
N/A