Chapter 9.36 — LIVING WAGES

The following definitions shall apply throughout this chapter:

"Awarding authority" means that subordinate or component entity or person of the City (such as a department) or of the financial assistance recipient that awards or is otherwise responsible for the administration of a service contract or public lease or license, or, where there is no such subordinate or component entity or person, then the City or the City financial assistance recipient.

"City" means the City of Vernon and all awarding authorities thereof, including those City departments which exercise independent control over their expenditure of funds.

"City financial assistance recipient" means any person who receives from the City discrete financial assistance for economic development or job growth expressly articulated and identified by the City, as contrasted with generalized financial assistance such as through tax legislation, in accordance with the following monetary limitations:

1. Assistance given in the amount $1,000,000.00 or more in any 12-month period shall require compliance with this chapter for five years from the date such assistance reaches the $1,000,000.00 threshold. For assistance in any 12-month period totaling less than $1,000,000.00 but at least $100,000.00, there shall be compliance for one year if at least $100,000.00 of such assistance is given in what is reasonably contemplated at the time to be on a continuing basis, with the period of compliance beginning when the accrual during such 12-month period of such continuing assistance reaches the $100,000.00 threshold.

2. Categories of such assistance include, but are not limited to, bond financing, planning assistance, tax increment financing exclusively by the City, and tax credits. City staff assistance shall not be regarded as financial assistance for purposes of this chapter. A loan shall not be regarded as financial assistance. The forgiveness of a loan shall be regarded as financial assistance. A loan shall be regarded as financial assistance to the extent of any differential between the amount of the loan and the present value of the payments thereunder, discounted over the life of the loan by the applicable Federal rate as used in 26 U.S.C. Sections 1274(d) and 7872(f). A recipient shall not be deemed to include lessees and sublessees.

3. A recipient shall be exempted from application of this chapter if:

   • a. It is in its first year of existence, in which case the exemption shall last for one year;

   • b. It employs fewer than five employees for each working day in each of 20 or more calendar weeks in the current or preceding calendar year; or

   • c. It obtains a waiver as provided herein.

4. A recipient (who employs the long-term unemployed or provides trainee positions intended to prepare employees for permanent positions, and who claims that compliance with this chapter would cause an economic hardship) may apply in writing to the City department or office administering such assistance, which department or office which shall forward such application and its recommended action on it to the City Council. Waivers shall be effected by Council resolution.

"Contractor" means any person that enters into:

• A service contract with the City;

• A service contract with a proprietary lessee or licensee or sublessee or sublicense; or

3. A contract with a City financial assistance recipient to assist the recipient in performing the work for which the assistance is being given. Vendors, such as service contractors, of City financial assistance recipients shall not be regarded as contractors except to the extent provided in the definition of "employee."

"Designated administrative agency (DAA)" means the City Administrator, or another department or office designated by City Council resolution, who shall bear administrative responsibilities under this chapter.

"Employee" means any person (who is not a managerial, supervisory, or confidential employee and who is not required to possess an occupational license) who is employed:

1. As a service employee of a contractor or subcontractor on or under the authority of one or more service contracts and who expends any of his or her time thereon, including, but not limited to: hotel employees, restaurant, food service or banquet employees; janitorial employees; security guards; parking attendants; nonprofessional health care employees; gardeners; waste management employees; and clerical employees;

2. As a service employee (of a public lessee or licensee, of a sublessee or sublicensee, or of a service contractor or subcontractor of a public lessee or licensee, or sublessee or sublicensee) who works on the leased or licensed premises;

3. By a City financial assistance recipient who expends at least half of his or her time on the funded project; or

4. By a service contractor or subcontractor of a City financial assistance recipient and who expends at least half of his or her time on the premises of the City financial assistance recipient directly involved with the activities funded by the City.

"Employer" means any person who is a City financial assistance recipient, contractor, subcontractor, public lessee, public sublessee, public licensee, or public sublicensee and who is required to pay a business license tax pursuant to Chapter 5.08 of this Code, or successor ordinance or, if expressly exempted by the Code from such tax, would otherwise be subject to the tax but for such exemption; provided, however, that corporations organized under Section 501(c)(3) of the United States Internal Revenue Code of 1954, 26 U.S.C. Section 501(c)(3), whose chief executive officer earns a salary which, when calculated on an hourly basis, is less than eight times the lowest wage paid by the corporation, shall be exempted as to all employees other than child care workers.

"Person" means any individual, proprietorship, partnership, joint venture, corporation, limited liability company, trust, association, or other entity that may employ individuals or enter into contracts.

Public Lease or License.

1. Except as provided in subsection (2), "public lease or license" means a lease or license of City property on which services are rendered by employees of the public lessee or licensee or sublessee or sublicensee, or of a contractor or subcontractor, but only where any of the following applies:

   • a. The services are rendered on premises at least a portion of which is visited by substantial numbers of the public on a frequent basis (including, but not limited to, parking lots and recreational facilities); or

   • b. Any of the services could feasibly be performed by City employees if the awarding authority had the requisite financial and staffing resources; or

   • c. The DAA has determined in writing that coverage would further the proprietary interests of the City.

2. A public lessee or licensee will be exempt from the requirements of this chapter subject to the following limitations:

   • a. The lessee or licensee has annual gross revenues of less than the annual gross revenue threshold, $350,000.00, from business conducted on City property;

   • b. The lessee or licensee employs no more than seven people total in the company on and off City property;

   • c. To qualify for this exemption, the lessee or licensee must provide proof of its gross revenues and number of people it employs in the company's entire workforce to the awarding authority as required by regulation;

   • d. Whether annual gross revenues are less than $350,000.00 shall be determined based on the gross revenues for the last tax year prior to application or such other period as may be established by regulation;

   • e. The annual gross revenue threshold shall be adjusted annually at the same rate and at the same time as the living wage is adjusted under Section 9.36.020;

   • f. A lessee or licensee shall be deemed to employ no more than seven people if the company's entire workforce worked an average of no more than 1,214 hours per month for at least three-fourths of the time period that the revenue limitation is measured;

• g. Public leases and licenses shall be deemed to include public subleases and sublicenses;

  • h. If a public lease or license has a term of more than two years, the exemption granted pursuant to this section shall expire after two years but shall be renewable in twoyear increments upon meeting the requirements therefor at the time of the renewal application or such period established by regulation.

"Service contract" means a contract let to a contractor by the City primarily for the furnishing of services to or for the City (as opposed to the purchase of goods or other property or the leasing or renting of property) and that involves an expenditure in excess of $25,000.00 and a contract term of at least three months; but only where any of the following applies:

1. At least some of the services rendered are rendered by employees whose work site is on property owned by the City;

2. The services could feasibly be performed by City employees if the awarding authority had the requisite financial and staffing resources; or

3. The DAA has determined in writing that coverage would further the proprietary interests of the City.

"Subcontractor" means any person not an employee that enters into a contract (and that employs employees for such purpose) with:

• A contractor or subcontractor to assist the contractor in performing a service contract; or

2. A contractor or subcontractor of a proprietary lessee or licensee or sublessee or sublicensee to perform or assist in performing services on the leased or licensed premises. Vendors, such as service contractors or subcontractors, of City financial assistance recipients shall not be regarded as subcontractors except to the extent provided in the definition for "employee."

"Willful violation" means that the employer knew of his, her, or its obligations under this chapter and deliberately failed or refused to comply with its provisions. (Prior code § 2.131)

Employers shall pay employees a wage of no less than the hourly minimum wage and provide the minimum required leave pursuant to State law. (Prior code § 2.132)

Neither an employer, as defined in this chapter, nor any other person employing individuals shall discharge, reduce in compensation, or otherwise discriminate against any employee for complaining to the City with regard to the employer's compliance or anticipated compliance with this chapter, for opposing any practice proscribed by this chapter, for participating in proceedings related to this chapter, for seeking to enforce his or her rights under this chapter by any lawful means, or for otherwise asserting rights under this chapter. (Prior code § 2.135)

• A. An employee claiming violation of this chapter may bring an action in the Superior Court of the State of California against an employer and may be awarded:

  1. For failure to pay wages required by this chapter (back pay for each day during which the violation continued).

  2. For failure to pay medical benefits (the differential between the wage required by this chapter without benefits and such wage with benefits, less amounts paid, if any, toward medical benefits).

  3. For retaliation (reinstatement, back pay, or other equitable relief the court may deem appropriate).

  4. For willful violations, the amount of monies to be paid under subsections (A)(1)

through (A)(3) shall be trebled.

• B. The court shall award reasonable attorney's fees and costs to an employee who prevails in any such enforcement action and to an employer who so prevails if the employee's suit was frivolous.

• C. Compliance with this chapter shall be required in all City contracts to which it applies, and such contracts shall provide that violation of this chapter shall constitute a material breach thereof and entitle the City to terminate the contract and otherwise pursue legal remedies that may be available. Such contracts shall also include a pledge that there shall be compliance with Federal law proscribing retaliation for union organizing.

• D. An employee claiming violation of this chapter may report such claimed violation to the DAA which shall investigate such complaint. Whether based upon such a complaint or otherwise, where the DAA has determined that an employer has violated this chapter, the DAA shall issue a written notice to the employer that the violation is to be corrected within 10 days. In the event that the employer has not demonstrated to the DAA within such period that it has cured such violation, the DAA may then:

  1. Request the awarding authority to declare a material breach of the service contract, public lease or license, or financial assistance agreement and exercise its contractual remedies thereunder, which are to include, but not be limited to, termination of the service contract, public lease or license, or financial assistance agreement and the return of monies paid by the City for services not yet rendered.

  2. Request the City Council to debar the employer from future City contracts, leases, and licenses for three years or until all penalties and restitution have been fully paid, whichever occurs last. Such debarment shall be to the extent permitted by, and under whatever procedures may be required by, law.

  3. Request the City Attorney to bring a civil action against the employer seeking:

     • a. Where applicable, payment of all unpaid wages or health premiums prescribed by this chapter; and/or

     • b. A fine payable to the City in the amount of up to $100.00 for each violation for each day the violation remains uncured.

4. Where the alleged violation concerns non-payment of wages or health premiums, the employer will not be subject to debarment or civil penalties if it pays the monies in dispute into a holding account maintained by the City for such purpose. Such disputed monies shall be presented to a neutral arbitrator for binding arbitration. The arbitrator shall determine whether such monies shall be disbursed, in whole or in part, to the employer or to the employees in question. Rules and procedures promulgated by the DAA shall establish the framework and procedures of such arbitration process. If the DAA does not promulgate such rules or procedures, the framework and procedures of such arbitration process shall be governed by the rules of Judicial Arbitration Mediation Services (JAMS). The cost of arbitration shall be borne by the City, unless the arbitrator determines that the employer's position in the matter is frivolous, in which event the arbitrator shall assess the employer for the full cost of the arbitration. Interest earned by the City on monies held in the holding account shall be added to the principal sum deposited, and the monies shall be disbursed in accordance with the arbitration award. A service charge for the cost of account maintenance and service may be deducted therefrom.

• E. Notwithstanding any provision of this Code or any other ordinance to the contrary, no criminal penalties shall attach for violation of this chapter.

• (Prior code § 2.136)

The DAA shall monitor compliance, including the investigation of claimed violations, and shall promulgate implementing rules and procedures consistent with this chapter as necessary. The DAA shall also issue determinations that persons are City financial assistance recipients, and that particular contracts shall be regarded as service contracts, and that particular leases and licenses shall be regarded as public leases or public licenses, when it receives an application for a determination of non-coverage or exemption as provided for in Section 9.36.100. The DAA shall also establish employer reporting requirements on employee compensation and on notification about and usage of the Federal EIC as appropriate. The DAA shall report on compliance to the City Council no less frequently than annually.

Every three years of this chapter's operation as of its effective date, the DAA shall conduct or commission an evaluation of this chapter's operation and effects. The evaluation shall specifically address at least the following matters:

• A. How extensively affected employers are complying with this chapter;

• B. How the chapter is affecting the workforce composition of affected employers;

• C. How the chapter is affecting productivity and service quality of affected employers;

• D. How the additional costs of the chapter have been distributed among workers, their employers, and the City. Within 180 days of the adoption of this chapter, these offices shall develop detailed plans for evaluation, including a determination of what current and future data will be needed for effective evaluation.

(Prior code § 2.137)

This chapter shall not be construed to limit an employee's right to bring legal action for violation of other minimum compensation laws.

(Prior code § 2.138)

This chapter shall apply to the expenditure, whether through aid to City financial assistance recipients, service contracts let by the City, or service contracts let by its financial assistance recipients, of funds entirely within the City's control and to other funds, such as Federal or State grant funds, where the application of this chapter is consonant with the laws authorizing the City to expend such other funds.

(Prior code § 2.139)

The provisions of this chapter as enacted by Ordinance No. 1187, as of its effective date, shall apply to contracts, contract amendments, financial assistance, supplemental finance assistance, and public leases or licenses, consummated after such date. (Prior code § 2.140)

Parties subject to this chapter may by collective bargaining agreement provide that such agreement shall supersede the requirements of this chapter. (Prior code § 2.141)

The definitions of City financial assistance recipient, public lease or license, and service contract in Section 9.36.010 shall be liberally interpreted so as to further the policy objectives of this chapter. All recipients of City financial assistance meeting the monetary thresholds of Section 9.36.010, all City leases and licenses (including subleases and sublicenses) where the City is the lessor or licensor, and all City contracts providing for services that are more than incidental, shall be presumed to meet the corresponding definition just mentioned, subject, however, to a determination by the DAA of non-coverage or exemption on any basis allowed by this chapter, including, but not limited to, non-coverage for failure to satisfy such definition. The DAA shall establish procedures for informing persons engaging in such transactions with the City of their opportunity to apply for a determination of non-coverage or exemption and procedures for making determinations on such applications. (Prior code § 2.142)

The provisions of this chapter shall apply to employees of the City. (Prior code § 2.143)

If any provision of this chapter is declared legally invalid by any court of competent jurisdiction, the remaining provisions shall remain in full force and effect. (Prior code § 2.144)