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Living Wage Guide

(Table of Contents)

Living Wage Description

What is the City of Irvine’s Living Wage Ordinance?

Contractors and Contracts Subject to the Living Wage Ordinance

Which Contractors are subject to the Living Wage Ordinance?

Which contracts are subject to the Living Wage Ordinance?

Employees Covered Under the Living Wage Ordinance

Who is a "covered employee"?

Are both part-time and full-time employees covered under the Living Wage Ordinance?

Compensation Required Under the Ordinance

What base hourly rate must I pay "covered employees"?

What if my employees are under a collective bargaining agreement or if I am

paying my employees prevailing wages?

What minimum health and paid time off benefits are offered to City employees?

What if I don’t offer my employees comparable health and paid time off benefits?

How is the "benefit factor" calculated and how often is it updated?

How do I calculate the benefit factor I am currently paying my employees?

Where do I find the current rates?

Other Requirements under the Ordinance

What other requirements must I meet under the Ordinance?

Compliance and Violations

How is the Living Wage Ordinance enforced?

If I am audited what documents might I be asked to provide?

What happens if it is determined that I am not in compliance with the Ordinance?

Is there an appeal process?

How does a covered employee file a complaint if they believe that a Contractor or subcontractor is in violation of the Ordinance?

What remedies for violation do covered employees have under the Ordinance?

Exceptions

Are there any circumstances in which an exception to the Ordinance will be granted?

Sample Documents

Contact Information


Living Wage Description

What is the City of Irvine’s Living Wage Ordinance?

The Living Wage Ordinance requires a Contractor entering into City contracts subject to the Ordinance to pay its covered employees an hourly rate, comparable health benefits and paid time off (such as vacation, sick and holiday paid time off) as set by the most current City Council Resolution (Resolution) establishing compensation policy for employees. These benefits are summarized in the Living Wage Comparable Benefits Summary.

The purpose of the Ordinance is to ensure that employees of City services Contractors can earn an hourly wage that is sufficient to live with dignity and to achieve economic self-sufficiency. The use of City funds to create living wage jobs is intended to decrease poverty, increase consumer income, invigorate community businesses and reduce the need for taxpayer-funded social service programs.

Contractors and Contracts Subject to the Living Wage Ordinance

Which Contractors are subject to the Living Wage Ordinance?

"Contractor" means any person or business that enters into a new service contract or any service contract with the City (including the Orange County Great Park Corporation) and all other City agencies, departments and offices) that is amended, renewed or extended after July 12, 2007 except for those bids, RFP’s and contracts that were in process on that date.

The term "Contractor" shall include all subcontractors retained by a Contractor to perform any or all of the functions covered by the contract.

Which contracts are subject to the Living Wage Ordinance?

All services contracts greater than $100,000 over a 12-month period are subject to the Living Wage Ordinance. A contract shall be subject to the Living Wage Ordinance if the aggregate value of multiple contracts with the City, including amendments to contracts, is $100,000 or more in a consecutive 12-month period.

Employees Covered Under the Living Wage Ordinance

Who is a "covered employee"?

"Covered employee" means (1) any employee whose services fulfill the Contractor’s contractual obligations for contracts with the City that are subject to this Ordinance and (2) any other employee of the Contractor who performs a majority of his or her services within Orange County.

Volunteers are not considered "covered employees" under the Ordinance.

Are both part-time and full-time employees covered under the Living Wage Ordinance?

The City does not provide health benefits or paid time off for City employees working less than 30 hours per week on average. Accordingly, there is no current requirement for a Contractor to pay a "benefit factor rate" for its part-time employees who work less than 30 hours a week on average.

Compensation Required Under the Ordinance

What base hourly rate must I pay "covered employees"?

The current City Council Resolution sets the minimum hourly rate. This is the rate at which an employee must be paid if the Contractor also provides the employee with health benefits and paid time off that are equal to or exceeding those offered to City employees, as detailed in the current City Council Resolution. Rates generally change in July of each year. All rate changes will be posted on the City’s web site in the Purchasing Department’s Living Wage section and Contractors are responsible for monitoring all changes and for notifying their subcontractors of those changes.

What if my employees are under a collective bargaining agreement or if I am paying my employees prevailing wages?

In the event that collective bargaining agreements and/or prevailing wage requirements are higher than the current living wage rates as set forth in the Ordinance, collective bargaining and/or prevailing wage rates must be paid to covered employees.

What minimum health and paid time off benefits are offered to City employees?

The selection of benefits of all salary classifications is set forth by the most current City Council Resolution establishing compensation for City employees. Currently, minimum City health benefits include an option for employees to enroll in the City’s indemnity medical insurance plan or the Health Maintenance Organization (HMO), and the option to enroll in a dental plan. City benefits also include pro-rata paid time off such as sick, vacation, and holiday pay. A summarization of these benefits is included in the Living Wage Comparable Benefit Summary.

What if I don’t offer my employees comparable health and paid time off benefits?

An additional "benefit factor" must be added to the base hourly rate if employees are not offered health and paid time off benefits equal to or exceeding those offered to City employees, as detailed in the current City Council Resolution and summarized in the Living Wage Comparable Benefit Summary. The current benefit factor must be added to the base minimum rate to reach the total minimum rate for covered employees.

If the cost of health and paid time off benefits provided to your employees cost you less than the current benefit factor, the difference between what you pay and the benefit factor must be added to the base minimum rate to achieve the total hourly compensation that must be paid to the covered employees.

All rate changes will be posted on the City’s web site in the Purchasing Department’s Living Wage section. Contractors are responsible for monitoring all changes and for notifying their subcontractors of the changes.

How is the benefit factor calculated and how often is it updated?

The methodology for calculating the benefit factor is based on the actual cost to the City for providing those benefits to employees. The rate is updated as benefit costs change, generally in July of each year. All rate changes will be posted on the City’s web site in the Purchasing Department’s Living Wage section. Contractors are responsible for monitoring all changes and for notifying their subcontractors of the changes.

How do I calculate the benefit factor I am currently paying my employees?

Take the total annual cost you pay, or offer to pay, as the employer for the benefits offered to your employees including health insurance and paid time off benefits, and then divide by 2,080 (the number of hours in a year).

Where do I find the current rates?

Rates may be found on the City’s web site, at www.cityofirvine.org.  Click on the “Doing Business” tab at the top of the screen, and then select “Living Wage Info.”  You may also call the Purchasing Department at 949-724-6180.

Rates are subject to change and it is the Contractor’s responsibility to monitor and update payroll records to accommodate rate changes when applicable. In addition, Contractors are responsible for notifying and ensuring compliance with these requirements by subcontractors retained by the Contractor to perform any or all functions covered by the contract.

Other Requirements Under the Ordinance

What other requirements must I meet under the Ordinance?

You are required under the Ordinance to:

  1. Post in a conspicuous place, as required by State and Federal laws for other notices to employees, a copy of the notice referred to in the Ordinance that informs covered employees of their rights under the Ordinance. A copy will be provided to you with your contract documents and is also available on the City website.

  2. Post in a conspicuous place, as required by State and Federal laws for other notices to employees, a copy of the notice referred to in the Ordinance that informs covered employees of their potential eligibility for Federal Earned Income Tax Credit (EITC).

  3. Provide notification of all of the requirements of the Ordinance to any subcontractors retained by you to perform any or all of the functions covered by the contract; and ensure compliance to the Ordinance.

  4. You are required to monitor and update your payroll records to accommodate Living Wage minimum wage and benefit factor rates when applicable.

  5. You are required to contact the City in writing if you are awarded additional contracts and the aggregate value of your contract(s) with the City, including amendments to your contract(s), is $100,000 or more in a 12-month period.

You are prohibited under the Ordinance to discharge, reduce the compensation, discriminate or retaliate against any employee for making a complaint to the City, asserting his or her rights or assisting another employee in making a complaint or asserting his or her rights under the Ordinance. Such notification should be sent to: Purchasing Agent, City of Irvine, PO Box 19575, Irvine, CA 92623-9575.

Compliance and Violations

How is the Living Wage Ordinance enforced?

Any covered employee may lodge a written complaint and/or the Director of Administrative Services may at any time review, investigate and/or perform random audits of the Contractor’s records to verify compliance with the Ordinance.

If I am audited what documents might I be asked to provide?

Specific documents that may be reviewed include, but are not limited to, covered employee time cards, gross pay calculations, pay registers, canceled checks, medical and dental insurance invoices, paid time off policies, required postings and other related payroll or benefit documents.

What happens if it is determined that I am not in compliance with the Ordinance?

The City may impose any or all of the following corrective measures for violations of the Ordinance:

  1. Order Contractor to comply within 60 days

  2. Order payment to covered employees to compensate the employee for amounts that should have been paid under the contract

  3. Suspend payments to the Contractor for the contract in violation

  4. Cancel the City contract in violation

  5. Render the Contractor ineligible to enter into contracts with the City for a period of three years or until all restitution to covered employees has been paid, which ever is longer

  6. Seek all other equitable and legal rights under Federal, State and local laws, including injunctive relief

Is there an appeal process?

If it is determined that the Contractor is not in compliance, the Contractor will be issued a preliminary notice of violation that contains the corrective measures required by the Contractor. The Contractor may request in writing an appeal hearing before the Director of Administrative Services to dispute the violation and/or the corrective measures. The request for appeal hearing must be filed with the City Clerk within fifteen (15) days of the date of the preliminary notice of violation and must contain the reasons the Contractor believes that a violation does not exist and/or that the corrective measures or remedies are not appropriate.

The Director of Administrative Services will conduct the appeal hearing within forty-five (45) days of receipt of the appeal request. Within fifteen (15) days of the conclusion of the appeal hearing, the Director of Administrative Services will issue his/her findings and final decision.

The final decision of the Director of Administrative Services may be appealed to the City Council by filing a written notice of appeal within fifteen (15) days of the date of the Director’s final written decision. The City Council shall conduct a hearing on the appeal within forty-five (45) days of its receipt of the appeal request and either uphold, overturn or modify the Director’s final decision.

How does a covered employee file a complaint if they believe that a Contractor or subcontractor is in violation of the Ordinance?

A Covered employee who believes a Contractor or subcontractor has violated the requirements of the Ordinance may file a written complaint with the Director of Administrative Services.

What remedies for violation do covered employees have under the Ordinance?

A covered employee may seek the following remedies against a Contractor violating the Ordinance:

  1. Restitution to compensate the employee for amounts that should have been paid under the contract

  2. Reasonable attorneys’ fees and costs

  3. Any and all other legal and equitable remedies available under Federal, State and local laws

Exceptions

Are there any circumstances in which an exception to the Ordinance will be granted?

The City Council, by a majority vote, may grant a whole or partial exception at the time of award of the contract if it is determined that imposition of this Ordinance would violate State or Federal laws. A Contractor that desires an exception must, at the time of the bid proposal, provide the City with a written request with a reference to the specific State or Federal law that would be violated.

The City Council, by a four-fifths vote, may grant a whole or partial exception if it is determined that an emergency or extraordinary circumstance justifies an exemption.

Sample Documents

Where can I view the various documents relating to the Living Wage Ordinance?

Please click on the following links for a copy of the current documents:

  1. Living Wage Ordinance

  2. Sample Declaration of Compliance

  3. Sample Notice to Employees (Contractor Responsibility/Employee Rights) Posting

  4. Living Wage Comparable Benefit Summary

Contact Information

To receive a copy of the Living Wage Guide, or to ask questions about the Living Wage Ordinance, please contact:

Purchasing Department
Phone: (949) 724-6180
City of Irvine FAX:(949) 724-6187
PO Box 19575
Irvine, CA 92623-9575

Employees registering a complaint against an employer should contact:

Director of Administrative Services
Phone: (949) 724-6255
City of Irvine FAX: (949) 724-6030
PO Box 19575
Irvine, CA 92623-9575