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 - Second Read
End
Recommended Action:
Recommended action
Adopt an ordinance to amend Sonoma County Code Chapter 2, Article XXVI, “Living Wage.” (Second Read)
end
Executive Summary:
At its September 12, 2023 meeting, the Board of Supervisors adopted a Resolution introducing, reading the title of, and waiving further reading of the proposed ordinance to amend Sonoma County Code Chapter 2, Article XXVI - Living Wage, The County’s Living Wage Ordinance, incorporating the following changes:
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, the Board revised the proposed ordinance to include a repeal of the existing labor neutrality provision contained in Sonoma County Code Section 2-389.
Today the final ordinance will be adopted. Staff continues to plan for implementation of the amendments and the revised LWO, with a goal to have all needed notices, procurement and contracting materials, and other measures in place and operational by January 1, 2024.
Discussion:
Background
The County’s Living Wage Ordinance (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; only some jurisdictions have a living wage ordinance. A living wage is different from a minimum wage, but they are often conflated, especially in a County such as Sonoma, where there are unincorporated areas (county) and incorporated cities.
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 $15.50 per hour, and the City of Santa Rosa’s minimum wage is $17.06 per hour. With some exceptions, an employer must follow the rate that is most beneficial to the employee.
In contrast, living wage requirements most commonly only apply as a condition of a government contract and are different from minimum wage laws. The County implemented its LWO with the intent 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 $17.65 per hour.
Over the past year, the Living Wage Ad Hoc, comprised of Supervisors Hopkins and Rabbitt, considered different aspects of the LWO and discussed internal County living wage and procurement issues, supported by staff from the County Administrator’s Office, County Counsel, Human Resources, and Public Infrastructure. Staff also spoke with community-based organizations (non-profits) with active County contracts, surveyed the local business community about perceptions of the LWO, spoke with other counties about their LWO process and experience, and met with local labor advocates.
The full Board of Supervisors discussed potential changes to the ordinance and provided direction to staff at its 10/18/22 and 6/12/23 meetings. Those substantive amendments are summarized in Attachment 1.
A further potential change was considered and included by the Board on September 12, 2023. That change is to repeal the LWO’s existing “labor neutrality” requirement, contained in Sonoma County Code Section 2-389.
Implementation Considerations
1 - Administrative
While the Board has agreed that the threshold for lessees, licensees, concessionaires, and other users of County real property should be $350,000 in annual gross revenues and more than 25 employees, confirming and maintaining accurate profiles on all those entities will be a challenge. Other than self-certifications and general duty to comply, any proactive assessment or confirmation of employment and revenue data will take staff time and potentially certain expertise. This will especially be the case in situations of complex, multi-tiered subleasing and concessionaire operational arrangements, to capture any “outsourced” services and employees. Should employee or revenue profiles change over time, then tools and procedures will be needed for ensuring up-to-date information. Depending on the timing of contract formation, data on gross revenue may not be readily ascertainable or reliably audited. Also, for employers who year-to-year are on the cusp of the LWO threshold for employee and revenue criteria, yearly fluctuations will cause employment and budgeting burdens. Further, as outlined below, neither the Sonoma County Fairgrounds, Airport, nor the County has dedicated staff to pursue LWO issues.
To the extent that any lessees or concessionaires attempt to avoid LWO requirements by utilizing single-purpose corporations, controlled subsidiaries, or other complex corporate arrangements, staff may be challenged to understand those structures and how to ensure meaningful and lawful application of the LWO, which may, for example, burden procurement processes in general, and specifically burden evaluation and ranking of concessionaires and other users.
Additionally, a comprehensive communication plan and resources for County departments, contractors, leaseholders, concessionaires will need to be developed and undertaken, with unknown resources applied to this effort.
The proposed amendments will also require staff to, among other things, incorporate Living Wage notices in pending solicitations and in County procurement systems and materials, devise and implement the bidding policies and preferences as contemplated by the Part-Time Hours and Employee Retention amendments, and prepare and translate the employee rights notices required of all covered employers.
2 - Enforcement
The County recognizes that there are opportunities for improvement, efficiency, and modernization in its procurement process and systems and that there is no staffing for specific LWO monitoring or other procurement processes. The recommendations from the broader procurement assessment, currently underway, may impact LWO processes, including compliance, staffing, and systems. The near-term LWO enforcement solutions approved by the Board, i.e., establish an enforcement/complaint hotline and a process for spot check audits, will be pursued after a revised ordinance is in effect and after resources have been identified.
Anticipated Next Steps
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:
§ 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:
None
Narrative Explanation of Staffing Impacts (If Required):
N/A
Attachments:
Attachment 1 - Summary of substantive amendments
Attachment 2 - Amended (clean) version of revised Living Wage Ordinance
Attachment 3 - Red-lined version of the Living Wage Ordinance
Related Items “On File” with the Clerk of the Board:
N/A