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
2023 Living Wage rate increase
End
Recommended Action:
Recommended action
A) Adopt a resolution to increase the living wage hourly rate by 2.8%, for a new required living wage rate of $18.10 per hour.
B) Delegate authority to all department heads, the Purchasing Agent, and the County Administrator, to execute amendments and other contract instruments, in form approved by County Counsel, if needed, to effect the wage increase as to existing covered transactions and contracts, including to the extent any increased contract “not to exceed” amounts or payments for services exceed existing delegations or Board-approved amounts.
end
Executive Summary:
The County’s existing living wage ordinance (“LWO”) states that any increase to the hourly rate is not to exceed the lesser of the annual increase in cost of living as measured by the preceding year Consumer Price Index or the cost-of-living adjustment (COLA) granted to County employees. On November 14, 2023, the Department of Labor’s Bureau of Labor Statistics released its October 2023 Consumer Price Index for All Urban Consumers (CPI-U) of 2.8%.
Today’s actions would increase the hourly living wage rate from $17.65 to $18.10 per hour and would be effective for new contracts and transactions as of January 1, 2024. For existing contracts and transactions, staff is recommending a phase-in date of no later than June 30, 2024, to allow time for implementation and to align the increase with Board intent on pending LWO amendments to move the effective date of any living wage rate increase to July 1.
Discussion:
Background
The County’s LWO 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. Living wage requirements most commonly only apply as a condition of a government contract and are different from minimum wage laws.
Over the past year, staff has worked with the Living Wage Ad Hoc, comprised of Supervisors Hopkins and Rabbitt, and the Board has considered various amendments to the LWO. The proposed, amended LWO is still in progress and is scheduled to return to the Board on March 26, 2024.
The original LWO is still in effect. It calls for annual review of the living wage rate, which considers 1) the change in the cost of living indicated by the October Bay Area CPI-U published by the Department of Labor’s Bureau of Labor Statistics; 2) the COLA granted to Sonoma County employees; and 3) the economic health of the County and economy in general. Pursuant to the LWO, a living wage rate adjustment shall be adopted by Board resolution. The LWO also states that any increase to the LWO rate is not to exceed the lesser of the annual increase in cost of living as measured by the CPI-U or the COLA granted to County employees.
The LWO allows for credits or “discounts” to the hourly rate, as follows:
§ Credit of $1.50 off the hourly rate, if a covered service contractor contributes to their employees’ health care benefits or retirement plan;
§ Credit of $3.00 off the hourly rate, if a covered service contractor contributes to their employees’ health care benefits and retirement plan.
Cost of Living Adjustment (COLA) Recommendation
On November 14, 2023, the Department of Labor’s Bureau of Labor Statistics released its October 2023 Consumer Price Index increase for All Urban Consumers (CPI-U), which is 2.8%. The most recent COLA (from May 2023) for the majority of County employees is 5.00%, and the next increase is 4.5%, to be effective in March 2024. Based on the factors set forth in the LWO and in light of the LWO’s CPI-U “cap,” the recommendation for the living wage rate adjustment is a 2.8% increase.
Implementation Recommendation
Similar to past rate increases, staff is recommending a two-step implementation of the living wage rate increase. For new contracts and LWO-covered transactions entered into on or after January 1, 2024 (including any extensions or amendments of any existing covered transactions), the increased rate would apply.
As for existing contracts and LWO-covered transactions/employers, a phase-in period is recommended through June 30, 2024, to allow time for implementation considerations, such as noticing and any needed contractual amendments. The phase-in period will serve to mitigate any impacts related to the increase, for existing contractors, covered employers and for County personnel in implementing and managing contracts. Additionally, this phase-in period will assist in aligning the COLA increase with the Board’s intent on the anticipated LWO amendments to move the effective date of any living wage rate increase to July 1.
Also similar to past rate increases, staff is recommending delegating authority to department heads, the Purchasing Agent, and the County Administrator, to execute amendments and other contract instruments, in form approved by County Counsel, if needed, to effect the wage increase as to existing covered transactions and contracts, including to the extent any increased contract “not to exceed” amounts or payments for services exceed existing delegations or Board-approved amounts.
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=>.
Prior Board Actions:
§ 10/24/23 Discussion of 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). Authorized Human Resources staff to offer to meet and confer with affected labor organizations, if necessary to implement the proposed increase.
§ 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:
There will be an expected increase in those living wage covered County contracts affected by the living wage COLA increase, but most contractors are already paying above the County’s living wage rate. Should “not to exceed” amounts or payments for services exceed existing delegations or Board-approved amounts, the recommended action of delegating authority to department heads, the Purchasing Agent, and the County Administrator, to execute amendments and other contract instruments to effect the living wage rate change will facilitate implementation.
Narrative Explanation of Staffing Impacts (If Required):
N/A
Attachments:
1 - Resolution
2 - Rate increase methodology
Related Items “On File” with the Clerk of the Board:
N/A