Agenda #: 5.5
Meeting Date: November 21, 2023
TO: Honorable Mayor and Members of the City Council
FROM: Daniel Fox, City Manager
TITLE: AMENDMENT TO THE COMPENSATION PLAN FOR PART-TIME
CLASSIFICATIONS OF EMPLOYMENT
STRATEGIC
GOAL: Open, Engaged & Responsive Government
RECOMMENDATION:
Adopt Resolution No. 2023-34 amending the Compensation Plan for Part-time Classifications of Employment Effective December 30, 2023.
FINANCIAL IMPACT:
It is estimated that this action will have a financial impact of $11,700 to the remaining 2023/24 fiscal year budget which can be paid for with existing budgetary resources through salary savings.
BACKGROUND:
On April 4, 2016, former California Governor Jerry Brown signed Senate Bill No. 3 into law which legislated scheduled and phased annual increases to minimum wage starting January 1, 2017 through January 1, 2022 when it would reach $15 per hour. From there, the determination of the annual minimum wage change (if any) would be based on the Department of Finance’s annual Consumer Price Index (CPI) calculation for Urban Wage Earners and Clerical Workers. The minimum wage increases are based on the CPI calculation by the lesser of 3.5 percent and then certified by the Governor of California. If the CPI calculation is negative then the change to minimum wage is $0. The scheduled increases since 2017 until now are listed below for reference.
Effective Date Minimum Hourly Rate
January 1, 2017 $10.50
January 1, 2018 $11.00
January 1, 2019 $12.00
January 1, 2020 $13.00
January 1, 2021 $14.00
January 1, 2022 $15.00
January 1, 2023 $15.50
One of the protections of the minimum wage law is an annual review of the wage rate using the U.S. Consumer Price Index for Urban Wage Earners and Clerical Workers (U.S. CPI-W). The Department of Finance calculated that the U.S. CPI-W increased by
6.16 percent for the period from July 1, 2022, to June 30, 2023, compared to the prior 12-month period. On July 31, 2023, Governor Newsom certified the minimum wage increase for all employers for 2024.1 Effective January 1, 2024, California’s minimum wage will rise to $16.00 per hour for all employers with 26 or more employees. This change to state law will impact the City’s part-time non-benefitted salary schedule.
ANALYSIS:
Over the years, the City made minor adjustments to the part-time salary schedule in order to accommodate the state mandated minimum wage increases. Each year, City staff reviews and analyzes its options to remain compliant with state law and manage budgetary resources in a financially prudent manner. The City’s compensation structure for part-time non-benefitted employees is organized into several benchmark salary ranges with three steps each. Because each of the benchmarks are closely aligned, it is requested that the City Council consider amending the part-time employee salary schedules by increasing each of the steps by fifty cents ($0.50).
The City currently has 52 part-time non-benefitted employees that would be impacted by the 50-cent increase to minimum wage. If they each worked 450 hours between January – June 2024, the estimated financial impact to the remaining 2023/24 fiscal year budget is approximately $11,700. The modest increase to part-time salaries can be managed within existing 2023-24 FY budgetary resources through departmental salary savings.
If approved by City Council, these actions will be effective at the beginning of the pay period closest to January 1, 2024 which is December 30, 2023.
LEGAL REVIEW:
The City Attorney has reviewed and approved the Resolution as to form.
PREPARED BY:
1 As accessed on https://www.dir.ca.gov/DIRNews/2023/2023-66.html REVIEWED BY:
Attachments:
1. 5.5.a Resolution No. 2023-34
2. 5.5.b EXHIBIT A