City of Sacramento
City Council - 2PM Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2024-00914 4/30/2024 Consent Item 27.
Annual Report on Living Wage Ordinance (LWO)
File ID: 2024-00914
Location: Citywide
Recommendation: Receive and file.
Contact: Dayana Reyes Zanaska, Procurement Manager, (916) 808-5524; [email protected], Finance
Presenter: None.
Attachments:
1-Description/Analysis
2-Living Wage Rate History
Description/Analysis
Issue Detail: This report reviews the administration of the 20th year of the Living Wage Program for the period from March 2023 to February 2024 and has been modeled after the most recent report provided to Council. The following is a list of actions taken and the results obtained during this period:
· Rates for 2024 have been updated utilizing the San Francisco-Oakland-Hayward, CA metropolitan area Consumer Price Index for all Urban Consumers (CPI-U) which resulted in an increase of 2.6%.
· The rates for 2024 are $16.08 per hour if health benefits are provided and $18.50 per hour if health benefits are not provided. The health benefit is $2.42 per hour. · The rates for 2024 applicable to janitorial contractors are $25.97 per hour which includes a minimum pay rate of $18.50 per hour plus a minimum of $7.47 per hour in health benefits; or $18.50 per hour if benefits are not provided.
· Procurement has provided notice of rate changes to City staff and contractors. · 2024 Living Wage rates as well as a history of Living Wage rate changes are posted on the City’s public website and are updated annually.
Policy Considerations: The intent of the Living Wage Program is consistent with City Council goals to promote and support economic vitality.
File ID: 2024-00914 4/30/2024 Consent Item 27.
Economic Impacts: Applicable contractors performing non-professional services for the City under agreements valued at $250,000 or more must ensure employees performing work on these contracts are paid a wage equal to or greater than the rate noted in the current Living Wage Memo included as Attachment 2.
Environmental Considerations:
California Environmental Quality Act (CEQA): This report concerns administrative activities and governmental fiscal activities that do not constitute a “project” as defined by the CEQA Guidelines Sections 15378(b)(2) and 15378(b)(4) and are not subject to the provisions of CEQA (CEQA Guidelines Section 15060(c)(3)).
Sustainability: Not applicable.
Commission/Committee Action: Not applicable.
Rationale for Recommendation: Not applicable.
Financial Considerations: Not applicable.
Local Business Enterprise (LBE): Not applicable.
Background: In December 2003, the City Council enacted a LWO, which became effective March 1, 2004. The intent of LWO is to ensure that employees of businesses contracting with the City to provide nonprofessional services are paid a wage that includes heal-care benefits and enables the employees and their families to meet basic needs and avoid economic hardship.
The LWO applies to:
· A contract for non-professional services with a value of $250,000 or more when the service provider has at least 25 full and/or part-time employees. · The aggregate value of City contracts awarded to a non-professional services provider within a 12-month period exceeds $250,000 and the service provider has 25 or more full or part-time employees.
· City of Sacramento employees.
The LWO does not apply to:
· Not-for-profit corporations with less than 100 employees. · Contracts for, or providers of, professional services, goods, or commodities. · Student internships and specialized training programs. · Services deemed by the City Manager to constitute an emergency. · Non-career and seasonal City employees.
The LWO rate is computed as follows:
· For each year after 2007, the rate shall be based on the rate from the immediately preceding year adjusted by the increase in the Consumer Price Index for All Urban Consumers, San
File ID: 2024-00914 4/30/2024 Consent Item 27.
Francisco/Oakland/Hayward, CA area (1982-1984=100) from January 1 through December 21 of the immediately preceding year.
· The Consumer Price Index baseline (1982-1984=100) is established as a reference for measuring increases and decreases to the index over time.
Living Wage Ordinance - Rate History
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On December 9, 2003, the Sacramento City Council enacted a Living Wage Ordinance (the “LWO”), adopted as Amended Ordinance No. 2003-082 and codified as Chapter 3.58 of the Sacramento City Code. The LWO requires certain firms that contract to provide certain services to or for the City to pay a specified minimum level of compensation to their employees for time spent performing any work on the City contract. The LWO also applies to certain subcontractors.
Listed below is the starting rate of the City of Sacramento’s Living Wage and the subsequent annual increases. The percentage increase for each year is variable and is tied to the Consumer Price Index for the San Francisco / Oakland / Hayward area for the end of the previous calendar year. The revised Living Wage rate typically will take effect on the final Sunday of February with the approval of the City Manager.
During 2004 (start of LWO)
1. $9.00 per hour if employer's contribution for health benefits is at least $1.50 for each hour of work.
2. $10.50 per hour if employer's contribution for health benefits is not at least $1.50 for each hour of work.
During 2005
1. $9.33 per hour if employer's contribution for health benefits is at least $1.50 for each hour of work.
2. $10.87 per hour if employer's contribution for health benefits is not at least $1.50 for each hour of work.
During 2006
1. $9.67 per hour if employer's contribution for health benefits is at least $1.50 for each hour of work.
2. $11.17 per hour if employer's contribution for health benefits is not at least $1.50 for each hour of work.
During 2007
1. $10.00 per hour if employer's contribution for health benefits is at least $1.50 for each hour of work.
2. $11.50 per hour if employer's contribution for health benefits is not at least $1.50 for each hour of work.
During 2008
1. $10.31 per hour if employer's contribution for health benefits is at least $1.50 for each hour of work.
2. $11.86 per hour if employer's contribution for health benefits is not at least $1.50 for each hour of work.
During 2009
1. $10.65 per hour if employer's contribution for health benefits is at least $1.60 for each hour of work.
2. $12.25 per hour if employer's contribution for health benefits is not at least $1.60 for each hour of work.
During 2010 (an increase of 0.7%)
1. $10.72 per hour if employer's contribution for health benefits is at least $1.61 for each hour of work.
2. $12.33 per hour if employer's contribution for health benefits is not at least $1.61 for each hour of work.
During 2011 (an increase of 1.4%)
1. $10.87 per hour if employer's contribution for health benefits is at least $1.63 for each hour of work.
2. $12.50 per hour if employer's contribution for health benefits is not at least $1.63 for each hour of work.
During 2012 (an increase of 2.6%)
1. $11.15 per hour if employer's contribution for health benefits is at least $1.67 for each hour of work.
2. $12.82 per hour if employer's contribution for health benefits is not at least $1.67 for each hour of work.
During 2013 (an increase of 2.7%)
1. $11.45 per hour if employer's contribution for health benefits is at least $1.72 for each hour of work.
2. $13.17 per hour if employer's contribution for health benefits is not at least $1.72 for each hour of work.
During 2014 (an increase of 2.1%)
1. $11.69 per hour if employer's contribution for health benefits is at least $1.76 for each hour of work.
2. $13.45 per hour if employer's contribution for health benefits is not at least $1.76 for each hour of work.
Living Wage Ordinance - Rate History
2 | Page
During 2015 (an increase of 2.8%)
1. $12.02 per hour if employer's contribution for health benefits is at least $1.81 for each hour of work.
2. $13.83 per hour if employer's contribution for health benefits is not at least $1.81 for each hour of work.
During 2016 (an increase of 2.6%)
1. $12.33 per hour if employer's contribution for health benefits is at least $1.85 for each hour of work.
2. $14.18 per hour if employer's contribution for health benefits is not at least $1.85 for each hour of work.
During 2017 (an increase of 3.5%)
1. $12.76 per hour if employer's contribution for health benefits is at least $1.92 for each hour of work.
2. $14.68 per hour if employer's contribution for health benefits is not at least $1.92 for each hour of work.
During 2018 (an increase of 2.9%)
1. $13.13 per hour if employer's contribution for health benefits is at least $1.98 for each hour of work.
2. $15.11 per hour if employer's contribution for health benefits is not at least $1.98 for each hour of work.
During 2019 (an increase of 4.5%)
1. $13.72 per hour if employer's contribution for health benefits is at least $2.07 for each hour of work.
2. $15.79 per hour if employer's contribution for health benefits is not at least $2.07 for each hour of work.
During 2020 (an increase of 2.5%)
1. $14.06 per hour if employer's contribution for health benefits is at least $2.12 for each hour of work.
2. $16.18 per hour if employer's contribution for health benefits is not at least $2.12 for each hour of work.
During 2021 (an increase of 2.0%)
1. $14.34 per hour if employer's contribution for health benefits is at least $2.16 for each hour of work.
2. $16.50 per hour if employer's contribution for health benefits is not at least $2.16 for each hour of work.
During 2022 (an increase of 4.2%)
1. $14.94 per hour if employer's contribution for health benefits is at least $2.25 for each hour of work.
2. $17.19 per hour if employer's contribution for health benefits is not at least $2.25 for each hour of work.
During 2023 (an increase of 4.9%)
1. $15.67 per hour if employer's contribution for health benefits is at least $2.36 for each hour of work.
2. $18.03 per hour if employer's contribution for health benefits is not at least $2.36 for each hour of work.
During 2024 (an increase of 2.6%)
1. $16.08 per hour if employer's contribution for health benefits is at least $2.42 for each hour of work.
2. $18.50 per hour if employer's contribution for health benefits is not at least $2.42 for each hour of work.