SR-703-003 (13)
f:\atty\muni\strpts\mjm\livingwage2d.wpd
City Council Meeting 6-26-01 Santa Monica,
California
TO: Mayor and City Council
FROM: City Staff
SUBJECT: Ordinance Adding Chapter 4.65 to the Santa Monica Municipal Code
Creating Minimum Wage Requirements Applicable to Certain Businesses
Located in the Coastal Zone and Extended Downtown Core and to the City
and its Service Contractors
Introduction
At its meeting of June 12, 2001, the City Council directed staff to make specified changes
to the proposed Living Wage Ordinance and return it to the Council for first reading. This
staff report and the attached ordinance fulfill that directive.
Background
The previous version of the Living Wage Ordinance, submitted to the Council for second
reading on June 12, 2001, needed revision to eliminate ambiguities and thereby ensure
effectuation of the Councils intent. In particular, the Council directed staff to reword for
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claritys sake provisions establishing boundaries for the area governed by the ordinance
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and defining the class of employers subject to the laws minimum wage and benefit
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requirements. Additionally, Council directed that the national price index specified in the
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proposed ordinance be eliminated and that a local index be utilized instead. Finally, the
Council asked staff to correct a typographical error.
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Discussion
The attached draft includes the changes which the Council requested. Four of the
definitions have been changed. The definitions of Coastal Zone and Downtown Core
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have been revised to enhance clarity. The definition of Employee has been changed to
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make clear that employees of contractors, subcontractors, lessees or sublessees working
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for covered employers may also be entitled to the protections of the ordinance. The
definition of Employer has been revised to include both the employer itself and its
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contractors and subcontractors.
Other changes directed by the Council have also been made. The index applicable to
wages, benefits and the gross receipts threshold has been changed to a local index. Also,
a spelling error was corrected.
In addition to the changes directed by the Council, minor editing changes have been made
in the wording of various provisions to improve grammar, syntax, stylistic consistency and
clarity. These changes were not substantive.
Recommendation
Staff recommends that the Council introduce the attached ordinance for first reading.
PREPARED BY: Marsha Jones Moutrie, City Attorney
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City Council Meeting 6-26-01 Santa Monica,
California
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ORDINANCE NUMBER _____
(City Council Series)
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY
OF SANTA MONICA ADDING CHAPTER 4.65 TO THE SANTA
MONICA MUNICIPAL CREATING MINIMUM WAGE REQUIREMENTS
APPLICABLE TO BUSINESSES IN THE COASTAL ZONE AND
EXTENDED DOWNTOWN CORE WITH GROSS RECEIPTS OVER
$5,000,000 AND TO THE CITY AND ITS SERVICE CONTRACTORS
WHEREAS, the public welfare requires wages and benefits sufficient to ensure a
decent and healthy life for workers and their families; and
WHEREAS, many Santa Monica employers pay wages so low as to imperil the
public welfare; and
WHEREAS, many Santa Monica workers earn wages insufficient to support
themselves and their families; and
WHEREAS, many Santa Monica workers receive no health care benefits and
therefore cannot protect their own health and the health of their families; and
WHEREAS, many Santa Monica workers cannot participate in civic life or pursue
educational, cultural and recreational opportunities because they must work such long
hours to meet their households most basic needs; and
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WHEREAS, workers who do not receive adequate wages must rely upon federal,
state and local public assistance and social services funded by taxpayers and may never
escape poverty; and
WHEREAS, workers who do not receive health care benefits may be unable to
maintain their own health or the health of their children, may be forced to utilize publicly-
funded health and emergency care services, and may unintentionally imperil the health of
others; and
WHEREAS, workers who do not have sufficient income and time off work to
participate in the civic affairs and to pursue educational, cultural and recreational
opportunities may become alienated from their communities, their states and their nation;
and
WHEREAS, minimum wage laws promote the general welfare by ensuring that
workers can support and care for their families through their own efforts and without
governmental intervention; and
WHEREAS, creating decent job opportunities through minimum wage and benefit
laws is a better way to protect individuals and families than public assistance because the
availability of decent job opportunities fosters independence, self-reliance and family unity;
and
WHEREAS, laws mandating or encouraging the provision of health care benefits to
workers promote the general welfare by minimizing health risks to the general population
and reducing the cost of emergency and other health care to the taxpayers; and
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WHEREAS, minimum wage and benefit laws also assure workers the means and
leisure to participate in civic life and pursue educational and cultural opportunities and
thereby strengthen the fabric of our society; and
WHEREAS, minimum wage and benefit laws also benefit employers and the
economy as a whole by improving employee performance, reducing employee turnover,
lowering absenteeism, and thereby improving productivity and the quality of the services
provided by employees; and
WHEREAS, in recognition of these realities, the federal government mandates the
payment of a minimum wage; and
WHEREAS, in recognition of the fact that the cost of living and other circumstances
vary substantially through the United States, federal law explicitly authorizes states and
municipalities to set more stringent wage standards than those established federally; and
WHEREAS, the State of California has exercised its power to set a minimum wage
higher than the minimum set by federal law in part because the cost of living in California
is higher than in most states; and
WHEREAS, the California Legislature has recognized that localities may need to
set more stringent wage standards than those set by state law and has therefore
specifically authorized the adoption of such standards in Labor Code Section 1205; and
WHEREAS, in Opinion Number 89-502, the California Attorney General has
recognized the power of local governments to set wage requirements higher than those set
by state law; and
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WHEREAS, the federal minimum wage has declined steadily in real dollars for two
decades; and
WHEREAS, the California minimum wage has also declined in real dollars; and
WHEREAS, the California minimum wage is inadequate to meet the needs of
workers in the Los Angeles region where the cost of living is much higher than in most
parts of the state; and
WHEREAS, housing costs in the region are particularly high relative to most parts
of California, and low-income workers must therefore spend a disproportionate percentage
of their income sheltering themselves and their families; and
WHEREAS, disproportionately high housing costs force workers to locate far from
their jobs and spend long hours traveling to and from work; and
WHEREAS, the taxpayers of the Los Angeles region must pay the cost of meeting
workers needs through the provision of social services because the state minimum wage
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is not adequate to meet those needs; and
WHEREAS, a minimum wage standard which condemns a full-time workers family
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to abject poverty is simply inadequate to achieve the long-recognized and salutary goals
of the minimum wage laws; and
WHEREAS, the inadequacy of the state minimum wage is particularly detrimental to
the public welfare in Santa Monica where the cost of living is very high and where
thousands of workers labor long hours at very low-paying jobs; and
WHEREAS, the highest concentration of low-income workers in Santa Monica is in
the coastal zone and the extended downtown core; and
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WHEREAS, this same area is home to some of the Citys largest and most
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profitable businesses, including luxury hotels, gourmet restaurants and large, national
retailers which can afford to pay their employees decent wages and can pass the cost of
paying increased wages to consumers; and
WHEREAS, most workers in this area are heads of household who bear primary
responsibility for supporting their families; and
WHEREAS, eighty per cent of these workers have incomes inadequate to meet their
families basic needs; and
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WHEREAS, the vast majority of these workers have no private health insurance;
and
WHEREAS, tourists staying in the hotels in this area may pay more than $400.00
per night for their rooms, but the workers changing their bedding and serving their food
cannot support their own families; and
WHEREAS, businesses in this area have reaped the benefits of various City
policies and investments; and
WHEREAS, the City has actively improved this area through capital investments,
operating expenditures, the promotion of tourism and the adoption of policies which restrict
growth and limit competition among certain businesses; and
WHEREAS, these investments, expenditures and policies have fostered huge
profits for some businesses in the area which employ large numbers of low-wage workers;
and
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WHEREAS, the City Council wishes to adopt a local requirement to effectuate the
purposes of the federal and state minimum wage law, to address the needs of workers,
and to promote the public welfare; and
WHEREAS, increasing the wages of low-wage workers will help achieve Santa
Monicas sustainable city goals by helping low-wage workers live closer to work, reducing
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commute distances, and facilitating use of public transit; and
WHEREAS, the City Council also wishes to protect local busineses and their
employees by ensuring that no business suffers economic hardship so severe as to render
it nonviable as a result of this ordinance; and
WHEREAS, the Council wishes to take all possible action to address the problems
caused by inadequate wages and benefits, and Council therefore intends that the
severance doctrine shall be liberally applied to effectuate the policy served by this law,
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA
DOES HEREBY ORDAIN AS FOLLOWS:
SECTION 1. Chapter 4.65 is hereby added to the Santa Monica Municipal Code to
read as follows:
CHAPTER 4.65
LIVING WAGE
Section 4.65.010. Definitions.
Coastal Zone. That area bounded by the Pacific Ocean on the west,
by the City border on the south, by the San Vicente Boulevard centerline and
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the City border on the north, and, on the east, by the Lincoln Boulevard
centerline south of Pico Boulevard and Fourth Street north of Pico
Boulevard. Properties adjacent to the east side of Fourth Street between
Pico Boulevard and Colorado Boulevard are included within the zone;
otherwise the Fourth Street boundary shall be at the centerline.
Extended Downtown Core. That area bounded by Ocean Avenue on
the west, Wilshire Boulevard on the north, Fifth Court on the east, and
Colorado Boulevard on the south. Properties on both sides of the boundary
streets shall be included within this definition.
Employee. Any person who does not actually work as a manager,
supervisor, or confidential employee, who is not required to possess an
occupational license, who is employed either by an Employer or a contractor,
subcontractor, lessee or sublessee working for an Employer, and who works
at an Employers place of business in the Coastal Zone or Extended
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Downtown Core at least half of his or her work time.
Employer. The City of Santa Monica, any contractor or subcontractor
working for the City on a service contract, any private person or private
corporation doing business at a location in the Coastal Zone or Extended
Downtown Core with gross receipts over the Gross Receipts Threshold for
the previous two years at that location, and any contractor, subcontractor,
lessee or sublessee working for such a private person or private corporation.
Gross Receipts Threshold. Gross receipts over $5 million per year
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which amount shall be adjusted annually each July 1st, beginning in 2003 by
an amount corresponding to the previous years change in the Consumer
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Price Index - Urban Wage Earners and Clerical Workers Los Angeles-
Riverside-Orange County, CA.
Health Benefit. A payment towards the provision of health care
benefits for Employees and their dependents in the amount of $1.75 per
hour in the first year that this Chapter is in effect, $2.50 per hour in the
second year that this Chapter is in effect, and thereafter adjusted annually
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each July 1, beginning in 2004, by an amount corresponding to the
previous years change in the Consumer Price Index - Urban Wage Earners
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and Clerical Workers Los Angeles-Riverside-Orange County, CA.
Section 4.65.020. Minimum Compensation for Employees.
Employers shall pay Employees a wage of no less than the hourly
rate established by this Chapter. The initial hourly rate shall be $10.50 per
hour with Health Benefits or $12.25 per hour without Health Benefits. Such
rates shall be adjusted annually each July 1st, beginning in 2003, by an
amount corresponding to the previous years change in the Consumer Price
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Index - Urban Wage Earners and Clerical Workers Los Angeles-Riverside-
Orange County, CA.
Section 4.65.030. Exemption for Severe Economic Hardship.
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An Employer who contends that compliance with this Chapter would
constitute a severe economic hardship may apply to the City Manager for a
waiver applicable to all or part of the Employers work force. Criteria for
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determining hardship shall include whether: (a) compliance with the
requirements of this Chapter would render the Employers business
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nonviable; (b) the Employers business depends for its viability upon young
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people and other first-time workers who are employed on a seasonal basis;
and (c) whether granting a waiver would otherwise advance the policies
underlying this Chapter. The City Manager shall promulgate an
Administrative Instruction establishing specific criteria applicable to and
procedures for processing hardship applications. Said Administrative
Instruction shall set forth information to be included on the hardship
application, procedures for filing and processing applications, and
procedures for administrative review by a City hearing examiner whose final
decision shall be subject to judicial review.
Section 4.65.040. Prohibitions Against Retaliation and
Circumvention.
It shall be unlawful for any Employer or Employers agent or
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representative to take any action against an Employee in retaliation for the
exercise of rights under this Chapter. This Section shall also apply to any
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individual working in or for the City who mistakenly, but in good faith, alleges
noncompliance with this Chapter.
Taking adverse action against an Employee within sixty (60) days of
the Employees assertion of rights shall raise a rebuttable presumption of
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having done so in retaliation for the assertion of rights.
Additionally, it shall be unlawful for any Employer to intentionally
circumvent the requirements of this Chapter by contracting portions of its
operation or leasing portions of its property.
Section 4.65.050. Remedies.
(a) Criminal Penalty. Any person who is convicted of violating this
Chapter shall be guilty of a misdemeanor and upon conviction shall be
punished by a fine of not greater than five hundred dollars or by
imprisonment in the county jail for not more than six months, or by both such
fine and imprisonment.
(b) Civil Action. Any person, including the City, may enforce the
provisions of this Chapter by means of a civil action for injunctive and
monetary relief. The burden of proof in such cases shall be preponderance
of the evidence. Any person who violates or aids or incites another person
to violate the provisions of this Chapter is liable for each and every such
offense for the actual damages suffered by any aggrieved party or for
statutory damages in the sum of five hundred dollars, whichever is greater,
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and shall be liable for such attorney's fees and costs as may be determined
by the court in addition thereto. The court may also award punitive damages
to any plaintiff, including the City, in a proper case as defined by Civil Code
Section 3294. The burden of proof for purposes of punitive damages shall be
clear and convincing evidence.
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(c) Administrative Complaint. Any Employee claiming violation of this
Chapter may file an administrative complaint with the City Manager or his or
her designee who shall investigate the complaint and render a determination
on it. If the City Manager or Managers designee concludes that a violation
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has occurred, he or she may issue orders to the Employer appropriate to
effectuate the complaining Employees rights, including, but not limited to,
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back pay and reinstatement. If the Employer refuses to comply with such
orders, the City Manager may revoke the Employers business license. The
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City Managers determination shall be appealable to a hearing officer who
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shall conduct an evidentiary hearing and issue a written decision thereon.
The hearing officers decision shall be reviewable in court.
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(d) Nonexclusive Remedies and Penalties. The remedies provided in
this Section are not exclusive, and nothing in this Chapter shall preclude any
person from seeking any other remedies, penalties or relief provided by law.
Section 4.65.060. Supercession by Collective Bargaining
Agreement.
All of the provisions of this Chapter, or any part thereof, may be
waived in a bona fide collective bargaining agreement, but only if the waiver
is explicitly set forth in such agreement in clear and unambiguous terms.
Unilateral implementation of terms and conditions of employment by either
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party to a collective bargaining relationship shall not constitute, or be
permitted as, a waiver of all or any part of the provisions of this Chapter.
Section 4.65.070. Effective Date and Implementation.
Employers obligations under Section 4.65.020 shall be effective as of
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July 1, 2002.
SECTION 2. Any provision of the Santa Monica Municipal Code or appendices
thereto inconsistent with the provisions of this Ordinance, to the extent of such
inconsistencies and no further, is hereby repealed or modified to that extent necessary to
effect the provisions of this Ordinance.
SECTION 3. If any section, subsection, sentence, clause, or phrase of this
Ordinance is for any reason held to be invalid or unconstitutional by a decision of any court
of competent jurisdiction, such decision shall not affect the validity of the remaining
portions of this Ordinance. The City Council hereby declares that it would have passed
this Ordinance and each and every section, subsection, sentence, clause, or phrase not
declared invalid or unconstitutional without regard to whether any portion of the ordinance
would be subsequently declared invalid or unconstitutional.
SECTION 4. The Mayor shall sign and the City Clerk shall attest to the passage of
this Ordinance. The City Clerk shall cause the same to be published once in the official
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newspaper within 15 days after its adoption. Except as provided in Section 4.65.070, this
Ordinance shall become effective 30 days from its adoption.
APPROVED AS TO FORM:
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MARSHA JONES MOUTRIE
City Attorney
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