Petaluma Municipal Code Ch. 8.36 Living Wage

The purpose of this chapter is to improve the quality of services to beneNciaries of city-contracted services and to

assure that city employees, employees of city service contractors, subcontractors, and employees of recipients of

city Nnancial assistance earn an hourly wage that is suPcient to live with dignity and to achieve economic self-

suPciency. The city contracts with many businesses and organizations to provide services to the public, and

provides Nnancial assistance to developers for the purpose of promoting economic development and job growth.

Such public expenditures should also be spent to set a community economic standard that permits workers to live

above the poverty level. The city council Nnds that the use of city funds to provide living wage jobs will decrease

poverty, increase consumer income, invigorate neighborhood businesses and reduce the need for taxpayer-

funded social service programs.

This chapter shall be known and may be cited as the "City of Petaluma Living Wage Ordinance." The purpose of

this chapter is to protect the public health, safety and welfare. It does this by requiring that public funds be

expended in such a manner as to facilitate individual self-reliance by employees of city contractors, lessees,

recipients of city Nnancial aid and their respective subcontractors. (Ord. 2259 NCS §1, 2007.)

As a charter city, the city has the power to set compensation and terms of employment for its employees as an

exercise of its municipal powers; and

The city awards contracts to private Nrms and other businesses to provide services to the public and to city

government; and

The city has a limited amount of taxpayer and other resources to manage; and

The use of city funds to promote sustenance and creation of living wage jobs will increase consumer income,

decrease levels of poverty and reduce the need for taxpayer-funded social programs; and

When city funds are used to contract for services, such contracts should demonstrate an eQort to promote an

employment environment that enhances the general quality of life within the community and maximizes the

productive eQect of the city’s limited resources; and

The city’s use of contractors that do not provide health insurance to their employees can result in imposing the

costs of their medical care on the county, state and federal governments; and

Employees are more likely to be healthy if their employer provides reasonable health insurance to them and their

dependents; and

The payment of a minimum level of compensation as required by the chapter enacted by this chapter beneNts

these interests. (Ord. 2259 NCS §1, 2007.)

The following words and phrases whenever used in this chapter shall be construed as deNned in this section:

A. "Business" means any individual, proprietorship, partnership, joint venture, corporation, limited liability

company, trust, association, or other entity that may employ individuals or enter into service contracts, leases,

concessions or franchises, but does not include nonproNt organizations.

B. "Capital lease" means a lease of city property which requires capital expenditures in excess of one million

dollars to meet the terms of the lease.

C. "City" means the city of Petaluma and all city agencies.

D. "City Nnancial aid recipients" means all businesses as deNned in Section 8.36.040, which receive from the city

direct assistance in the form of grants, loans, or loan guarantees, in-kind services, waivers of city fees, interests in

real property or other valuable consideration in the amount of more than one hundred thousand dollars in any

twelve-month period. This term shall not include those who enjoy an economic beneNt as an incidental eQect of

city policies, regulations, ordinances, or charter provisions, nor any loan or grant for facade renovation. Assistance

from the Petaluma community development commission (PCDC) shall be included under this chapter if the PCDC

governing body has adopted a resolution approving such inclusion.

E. "Employee" means any individual employed by an employer who spends twenty percent or more of his or her

work time on work arising from a service contract, city Nnancial aid, or city lease, including subcontracts

therefrom. No work may be reassigned in order to evade coverage under this chapter. For the purposes of

determining whether an employer employs more than six employees for the purpose of this chapter, such

number shall be determined by the most recent payroll period unless the employer had less than seven

employees during the preceding eight payroll periods and will have less than seven during the next eight payroll

periods.

F. "Employer" means those persons identiNed in Section 8.36.040, except that no business other than the city

shall be deemed an employer until they receive a new service contract, lease, concession, franchise, or Nnancial

aid from or through the city. For these purposes, the term "new" includes any extension or renewal of a

preexisting agreement or arrangement which involves newly negotiated or modiNed terms other than adjustment

of terms pursuant to a formula or pre-set schedule, such as a Consumer Price Index, or the city allowing continued

occupancy by tenants with periodic tenancies (such as month-to-month tenants). A subcontractor shall be deemed

to have received a new service contract through the city when the person to whom it is subcontracting receives a

new city service contract, lease, franchise, or Nnancial aid. Exercise of a lease option does not constitute a new lease for these purposes. A capital lease as deNned in this chapter is exempt from the provisions of this chapter

during the original term of the capital lease and the term of any options to extend the term of the capital lease. An

amendment to a capital lease which does not extend its original term and/or option term does not constitute a

new lease for purposes of this chapter.

G. "NonproNt" shall mean a nonproNt organization described in Section 501c of the Internal Revenue Code of

1954 that is exempt from taxation under Section 501(c) of that code, or any nonproNt educational organization

qualiNed under Section 23701(d) of the Revenue and Taxation Code.

H. "Service contract" means a contract given to a contracting business by the city for the furnishing of services to

or for the city, except contracts where services are incidental to the delivery of products, equipment or

commodities. Service contracts include but are not limited to security guard services, janitorial services, waste

management, landscaping, transportation and shuttle services, parking attendant services, towing, health and

human services.

I. "Service contractor" means any business that enters into a service contract as hereafter deNned in an amount

equal to or greater than ten thousand dollars.

(Ord. 2259 NCS §1, 2007.)

The businesses described below shall comply with the minimum compensation standards established by this

chapter if they employ more than six employees.

A. The city of Petaluma, including all its agencies, departments and oPces.

B. For-proNt service contractors which receive contract(s) for ten thousand dollars or more from the city in a

twelve-month period.

C. Businesses receiving city leases, concessions, or franchises which employ twenty-Nve or more employees and

have three hundred Nfty thousand or more in annual gross receipts.

D. Businesses which receive more than one hundred thousand dollars in city Nnancial aid, including loans or

other cash and/or noncash assistance in any twelve-month period. Compliance shall be required for a period of

Nve years following receipt of this aid.

E. Subcontractors or sublessees of any of the businesses described in subsections (B) through (D) of this section

and which have Nfty thousand or more in annual gross receipts.

F. Any tenant which itself receives a Nnancial beneNt of more than one hundred thousand dollars annually as a

result of city Nnancial aid to the person or entity from which the tenant rents or leases premises. For purposes of

this subsection, city contributions to or construction of public improvements shall not be considered city Nnancial

aid.

(Ord. 2259 NCS §1, 2007.)

A. Any employer which contends that it is unable to pay all or part of the living wage must provide a detailed

explanation in writing to the city manager (or the city manager’s designee) who may recommend a waiver to the

city council.

B. The explanation must set forth the reasons for its inability to comply with the provisions of this chapter,

including a complete cost accounting for the proposed work to be performed with the Nnancial assistance sought,

including wages and beneNts to be paid all employees, as well as an itemization of the wage and beneNts paid to

the Nve highest paid individuals employed by the employer.

C. The employer must also demonstrate that the waiver will further the interests of the city of Petaluma in

creating training positions which will enable employees to advance into permanent living wage jobs or better and

will not be used to replace or displace existing positions or employees or to lower the wages of current employees.

D. The city council may grant a waiver only upon a Nnding and determination that the employer has

demonstrated economic hardship and that waiver will further the interests of the city of Petaluma in providing

training positions which will enable employees to advance into permanent living wage jobs or better.

E. However, no waiver will be granted if the eQect of the waiver is to replace or displace existing positions or

employees or to lower the wages of current employees.

F. Waivers under the foregoing subsections are disfavored and will be granted only where the balance of

competing interests weighs clearly in favor of granting the waiver, in the sole discretion of the city council.

G. If waivers are to be granted, partial waivers are favored over blanket waivers. Moreover, any waiver shall be

granted for no more than one year. At the end of the year, the employer may reapply for a new waiver that may

be granted subject to the same criteria for granting the initial waiver.

H. The city further reserves the right to waive the requirements of this chapter upon a Nnding and determination

of the city council that a waiver is in the best interests of the city. The city council may also waive the requirements

of this chapter if a majority of its members determines that an emergency exists which requires a waiver.

I. An attempted waiver of the provisions of this chapter by employees is void and unenforceable, unless such

waiver is clearly and unambiguously set forth in the terms of a collective bargaining agreement.

(Ord. 2259 NCS §1, 2007.)

Except as otherwise provided in this chapter, an employer subject to this chapter shall provide its covered

employees the following minimum compensation:

A. Living Wages. If the employer pays at least one dollar and Nfty cents per hour per employee toward an

employee medical beneNts plan which allows employees to receive employer-compensated care from a licensed

physician, the employer shall pay employees an hourly rate of not less than eleven dollars and seventy cents per

hour. If the employer does not provide the employees with such medical beneNts, the employer shall pay

employees an hourly wage of not less than thirteen dollars and twenty cents. This provision does not require that

the employer pay more than one dollar and Nfty cents per hour or the entire cost per employee for such medical

beneNts plan or compensate the employee for the full cost of medical care.

B. Time O5. Employees shall be entitled to at least twenty-two days oQ per year for sick leave, vacation, or

personal necessity. At least twelve of the required days oQ shall be compensated at the same rate as regular

compensation for a normal working day. Ten of the required twenty-two days may be uncompensated days oQ.

Employees who work part-time shall be entitled to accrue compensated days oQ in increments proportional to

that accrued by full-time employees. Employees shall be eligible to use accrued days oQ after the Nrst six months

of satisfactory employment or consistent with employer policy, whichever is sooner. Paid holidays, consistent with

established employer policy, may be counted toward provision of the required twelve compensated days oQ.

Compensation for paid leave for part-time on-call employees, prorated as described hereinabove, shall be

provided as a lump sum payment twice a year to employees who worked a minimum of Nve hundred twenty

hours in the previous six months.

C. Additional Compensation Permissible. Nothing in this chapter shall be construed to limit an employer’s

discretion to provide greater wages or time oQ to its employees.

D. The initial rates set forth in subsection (A) of this section shall increase annually on July 1st, in accordance with

any increase due to a cost of living adjustment for city employees, equal to the average cost of living adjustment

(excluding equity pay increases) for all city nonsafety, nonmanagement employees as of the date of the most

recent adjustment of the pay of nonsafety, nonmanagement employees, but no more than the most recent

December to December Consumer Price Index for San Francisco-Oakland-San Jose (CPI-U), published by the

Bureau of Labor Statistics. The city council may review the impact of the COLA on an annual basis to assess any

potential adverse impact and may modify or suspend adoption of a COLA otherwise allowed by this subsection.

(Ord. 2259 NCS §1, 2007.)

Every city service contract, lease, license, concession agreement, franchise agreement or agreement for Nnancial

aid with an employer described in Section 8.36.040 or amendment thereto shall contain provisions requiring the

employer to comply with the requirements of this chapter as they exist on the date when the employer entered its agreement with the city or when such agreement is amended. Such contract provisions shall address the

employer’s duty to promptly provide to the city documents and information verifying its compliance with the

requirements of this chapter, and sanctions for noncompliance. Such contract provisions shall also require the

employer to notify each of its aQected employees as to the amount of wages and time oQ that are required to be

provided pursuant to this chapter. (Ord. 2259 NCS §1, 2007.)

The requirements of this chapter shall not be applicable to nonproNt agencies or to the following employees:

A. An employee participating in a temporary job-training program approved by the city in which a signiNcant

component of the employee’s training consists of acquiring specialized knowledge, abilities, skills or job readiness

(e.g., the importance of proper work attire, punctuality and workplace demeanor).

B. An employee employed on a temporary project which will not exceed six months in duration.

C. Volunteers.

D. Employees of contractors on city public works projects subject to the requirements of Division 2, Part 7, of the

California Labor Code, when said code requires compensation greater than that required by this chapter.

E. Employees who are standing by or on-call according to the criteria established by the Fair Labor Standards

Act, 29 U.S.C. Section 201. This exemption shall apply only during the time when the employee is actually standing

by or on-call.

F. Any disabled employee who (1) is covered by a current sub-minimum wage certiNcate issued to the employer

by the U.S. Department of Labor; or (2) would be covered by such a certiNcate but for the fact that the employer is

paying a wage equal to or higher than the minimum wage.

G. An employee for whom application of the requirements of this chapter is prohibited by state or federal law.

H. An employee subject to a bona Nde collective bargaining agreement where the waiver of the provisions of this

chapter is set forth in clear and unambiguous terms in such an agreement.

I. City employees during their Nrst six months of employment which is considered a training or probationary

period.

(Ord. 2259 NCS §1, 2007.)

It shall be unlawful to retaliate or discriminate against any person on account of his having claimed a violation of

this chapter. (Ord. 2259 NCS §1, 2007.)

A. A person who alleges violation of any provision of this chapter may report such acts to the city. The city

manager may establish a procedure for receiving and investigating such complaints and take appropriate

enforcement action.

B. Any complaints received shall be treated as conNdential matters, to the extent permitted by law. Any

complaints received and all investigation documents related thereto shall be deemed exempt from disclosure

pursuant to California Government Codes Sections 6254 and 6255, to the extent permitted by law.

C. Nothing contained in this chapter shall be construed as a promise or enforceable obligation on the part of the

city to actively monitor employer compliance.

(Ord. 2259 NCS §1, 2007.)

A. A person claiming violation of this chapter may bring an action in the Superior Court of the State of California

against an employer and obtain the following remedies:

1. Reinstatement of an employee and/or back pay for each day during which the employer failed to pay the

compensation required by this chapter, payable to the employee or his/her successor in interest.

2. Compensatory damages and punitive damages.

3. Reasonable attorney’s fees, expert witness fees and costs.

B. Notwithstanding any provision of this chapter or any other ordinances to the contrary, no criminal penalties

shall attach for any violation of this section.

C. No remedy set forth in this chapter is intended to be exclusive or a prerequisite for asserting a claim for relief

to enforce any rights hereunder in a court of law. This chapter shall not be construed to limit an employee’s right

to bring a common law cause of action for wrongful termination.

D. Nothing in this chapter shall be interpreted to authorize a claim for damages against the city based upon

another employer’s failure to comply with this chapter or the city’s failure to enforce its provisions.

(Ord. 2259 NCS §1, 2007.)

Prior to commencement of the contract’s term or execution by the city, each contractor, subcontractor, lessee of

city property or other city-funded employer will certify to the satisfaction of the city that its employees are paid a living wage as provided by this chapter. As part of any bid, application or proposal for any contract or other

funding arrangement with the city covered by Section 8.36.040, the submitter shall (1) include an

acknowledgement in a form acceptable to the city of the terms of this chapter and intent to comply therewith, and

(2) complete a form to be created by the city manager indicating whether it has received any wage, hour, collective

bargaining, workplace safety, environmental or consumer protection charges, complaints, citations or Nndings of

violation of law or regulation by any regulatory agency or court within the last ten years, including but not limited

to California DFEH, OSHA, Department of Industrial Relations (Labor Commissioner), EPA, and NLRB.

By seeking such contract or arrangement from the city the submitter shall be deemed to have authorized the city

to obtain additional information upon request about the submitter’s history as an employer, including but not

limited to information about employee turnover and complaints lodged by employees (unless disclosure is

prohibited by their legal right of privacy or other applicable law), so that the city may ascertain the submitter’s

ability to provide the promised services without disruption and without adverse eQect on the city’s proprietary

interests. To the extent permitted by law, the council shall consider such matters in deciding whether to award the

contract, Nnancial assistance, or other arrangement being sought from the city. (Ord. 2259 NCS §1, 2007.)

A. No employer covered by Section 8.36.040 shall use any city funds or property to assist, promote or deter

union organizing. This restriction shall be subject to the deNnitions and exclusions found in Government Code

Sections 16645, 16646, and 16647. This subsection shall be of no force and eQect until and unless courts of

competent jurisdiction Nnally determine that the provisions of California Government Code Sections 16645, 16656

and 16647, or successor statutes, are valid and constitutional.

B. To the extent otherwise permitted by law, the employer shall provide reasonable access to employee-

assistance organizations for the sole purpose of communicating with employees about their rights under this

chapter, including rights of enforcement. Such access shall be limited to non-work time and to areas where

employees enter or exit the workplace or take breaks. Access shall not be exercised in any manner which disrupts

work.

(Ord. 2259 NCS §1, 2007.)