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The DAA shall promulgate rules for implementation of this article and otherwise coordinate administration of the requirements of this article.
SECTION HISTORY
Added by Ord. No. 171,004, Eff. 5-18-96.
Amended by: Ord. No. 176,155, Eff. 9-22-04; Ord. No. 176,283, Eff. 12-25-04, Oper. 9-22-04; In Entirety, Ord. No. 184,293, Eff. 6-27-16; In Entirety, Ord. No. 185,356, Eff. 1-26-18.
If any subsection, sentence, clause or phrase of this article is for any reason held to be invalid or unconstitutional by a 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 adopted this section, and each and every subsection, sentence, clause and phrase thereof not declared invalid or unconstitutional, without regard to whether any portion of the ordinance would be subsequently declared invalid or unconstitutional.
SECTION HISTORY
Added by Ord. No. 171,004, Eff. 5-18-96.
Amended by: In Entirety, Ord. No. 184,293, Eff. 6-27-16; In Entirety, Ord. No. 185,356, Eff. 1-26-18.
Section
10.37 Legislative Findings.
10.37.1 Definitions.
10.37.2 Payment of Minimum Compensation to Employees.
10.37.3 Health Benefits.
10.37.4 Employer Reporting and Notification Requirements.
10.37.5 Retaliation Prohibited.
10.37.6 Enforcement.
10.37.7 Administration.
10.37.8 City is a Third Party Beneficiary of Contracts Between an Employer and Subcontractor for Purposes of Enforcement.
10.37.9 Coexistence with Other Available Relief for Specific Deprivations of Protected Rights.
10.37.10 Expenditures Covered.
10.37.11 Timing of Application.
10.37.12 Express Supersession by Collective Bargaining Agreement.
10.37.13 Liberal Interpretation of Coverage; Rebuttable Presumption of Coverage.
10.37.14 Contracts, Employers and Employees Not Subject to this Article.
10.37.15 Exemptions.
10.37.16 Severability.
The City awards many contracts to private firms to provide services to the public and to City government. Many lessees or licensees of City property perform services that affect the proprietary interests of City government in that their performance impacts the success of City operations. The City also provides financial assistance and funding to other firms for the purpose of economic development or job growth. The City expends grant funds under programs created by the federal and state governments. These expenditures serve to promote the goals established for the grant programs and for similar goals of the City. The City intends that the policies underlying this article serve to guide the expenditure of such funds to the extent allowed by the laws under which such grant programs are established.
Experience indicates that procurement by contract of services all too often has resulted in the payment by service contractors to their employees of wages at or slightly above the minimum required by federal and state minimum wage laws. The minimal compensation tends to inhibit the quantity and quality of services rendered by those employees to the City and to the public. Underpaying employees in this way fosters high turnover, absenteeism and lackluster performance. Conversely, adequate compensation promotes amelioration of these undesirable conditions. Through this article, the City intends to require service contractors to provide a minimum level of compensation which will improve the level of services rendered to and for the City.
The inadequate compensation leaves service employees with insufficient resources to afford life in Los Angeles. Contracting decisions involving the expenditure of City funds should not foster conditions that place a burden on limited social services. The City, as a principal provider of social support services, has an interest in promoting an employment environment that protects such limited resources. In requiring the payment of a higher minimum level of compensation, this article benefits that interest.
In comparison with the wages paid at San Francisco International Airport, the wage for Los Angeles airport workers is often lower even though the airports are similar in the number of passengers they serve and have similar goals of providing a living wage to the airport workforce. Studies show that higher wages at the airport leads to increases in worker productivity and improves customer service. Higher wages for airport workers also results in a decline in worker turnover, yielding savings to the employers and alleviating potential security concerns. Therefore, the City finds that a higher wage for airport employees is needed to reduce turnover and retain a qualified and stable workforce.
Many airport workers who provide catering services to the airlines are paid below the living wage. Federal law allows employment contract agreements between airline caterers and its workers to remain in effect without an expiration date, effectively freezing wages for workers. Long-term employment contract agreements provide little incentive for employers to renegotiate the employment contract agreements with their workers. Airline catering workers often struggle to pay their bills, sometimes having to choose between paying medical bills and buying food for their families. The City finds that airline caterers should pay their workers, at a minimum, the living wage with benefits.
Airport workers are also the first to respond when an emergency occurs at the airport. In order to properly assist first responders during a crisis at the airport, the City finds that airport employees of Certified Service Provider License Agreement holders should be formally trained for an emergency response at the airport.
Nothing less than the living wage should be paid by employers that are the recipients of City financial assistance. Whether workers are engaged in manufacturing or some other line of business, the City does not wish to foster an economic climate where a lesser wage is all that is offered to the working poor.
The City holds a proprietary interest in the work performed by many employees of City lessees and licensees and by their service contractors, subcontractors, sublessees and sublicensees. The success or failure of City operations may turn on the success or failure of these enterprises, for the City has a genuine stake in how the public perceives the services rendered for them by such businesses. Inadequate compensation of these employees adversely impacts the performance by the City’s lessee or licensee and thereby hinders the opportunity for success of City operations. A proprietary interest in providing a living wage is important for various reasons, including, but not limited to: 1) the public perception of the services or products rendered to them by a business; 2) security concerns related to the location of the business or any product or service the business produces; or 3) an employer’s industry-specific job classification which is in the City’s interest to cover by the living wage. This article is meant to cover all such employees not expressly exempted.
Requiring payment of the living wage further serves a proprietary concern of the City. If an employer does not comply with this article, the City may: 1) declare a material breach of the contract; 2) declare the employer non- responsible and limit its ability to bid on future City contracts, leases or licenses; and 3) exercise any other remedies available.
SECTION HISTORY
Article and Section Added by Ord. No. 171,547, Eff. 5-5-97.
Amended by: In Entirety, Ord. No. 172,336, Eff. 1-14-99; In Entirety, Ord. No. 184,318, Eff. 7-7-16; In Entirety, Ord. No. 185,321, Eff. 1-20-18.
The following definitions shall apply throughout this article:
(a) “Airline Food Caterer” means any Employer that, with respect to the Airport:
(1) prepares food or beverage to or for aircraft crew or passengers;
(2) delivers prepared food or beverage to or for aircraft crew or passengers;
(3) conducts security or inspection of aircraft food or beverage; or
(4) provides any other service related to or in connection with the preparation of food or beverage to or for aircraft crew or passengers.
(b) “Airport” means the Department of Airports and each of the airports which it operates.
(c) “Awarding Authority” means the governing body, board, officer or employee of the City or City Financial Assistance Recipient authorized to award a Contract and shall include a department which has control of its own funds.
(d) “City” means the City of Los Angeles and all awarding authorities thereof, including those City departments which exercise independent control over their expenditure of funds.
(e) “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. Assistance given in the amount of $1,000,000 or more in any 12-month period shall require compliance with this article for five years from the date such assistance reaches the $1,000,000 threshold. For assistance in any 12-month period totaling less than $1,000,000 but at least $100,000, there shall be compliance for one year, with the period of compliance beginning when the accrual of continuing assistance reaches the $100,000 threshold.
Categories of assistance include, but are not limited to, bond financing, planning assistance, tax increment financing exclusively by the City and tax credits, and shall not include assistance provided by the Community Development Bank. City staff assistance shall not be regarded as financial assistance for purposes of this article. A loan at market rate 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. §§ 1274(d) and 7872(f). A recipient shall not be deemed to include lessees and sublessees.
A recipient shall be exempted from application of this article if:
(1) it is in its first year of existence, in which case the exemption shall last for one year;
(2) 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
(3) it obtains a waiver as a recipient who employs the long-term unemployed or provides trainee positions intended to prepare Employees for permanent positions. The recipient shall attest that compliance with this article would cause an economic hardship and shall apply in writing to the City department or office administering the assistance. The department or office shall forward the waiver application and the department or office’s recommended action to the City Council. Waivers shall be effected by Council resolution.
(f) “Contractor” means any person that enters into:
(1) a Service Contract with the City;
(2) a contract with a Public Lessee or Licensee; or
(3) a contract with a City Financial Assistance Recipient to help the recipient in performing the work for which the assistance is being given.
(g) “Designated Administrative Agency (DAA)” means the Department of Public Works, Bureau of Contract Administration, which shall bear administrative responsibilities under this article.
(h) “Employee” means any person who is not a managerial, supervisory or confidential employee who expends any of their time working for an Employer in the United States.
(i) “Employer” means any person who is:
(1) a City Financial Assistance Recipient;
(2) Contractor;
(3) Subcontractor;
(4) Public Lessee or Licensee; and
(5) Contractor, Subcontractor, sublessee or sublicensee of a Public Lessee or Licensee.
(j) “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.
(k) “Public Lease or License” means, except as provided in Section 10.37.15, a lease, license, sublease or sublicense of City property, including, but not limited to, Non-Exclusive License Agreements, Air Carrier Operating Permits and Certified Service Provider License Agreements (CSPLA), for which services are furnished by Employees where any of the following apply:
(1) The services are rendered on premises at least a portion of which is visited by members of the public (including, but not limited to, airport passenger terminals, parking lots, golf courses, recreational facilities);
(2) Any of the services feasibly could be performed by City employees if the City had the requisite financial and staffing resources; or
(3) The DAA has determined in writing as approved by the Board of Public Works that coverage would further the proprietary interests of the City. Proprietary interest includes, but is not limited to:
(i) the public perception of the services or products rendered to them by a business;
(ii) security concerns related to the location of the business or any product or service the business produces; or
(iii) an Employer’s industry-specific job classifications as defined in the regulations.
(l) “Service Contract” means a contract involving an expenditure in excess of $25,000 and a contract term of at least three months awarded to a Contractor by the City to furnish services for the City where any of the following apply:
(1) at least some of the services are rendered by Employees whose work site is on property owned or controlled by the City;
(2) the services feasibly could be performed by City employees if the City had the requisite financial and staffing resources; or
(3) the DAA has determined in writing as approved by the Board of Public Works that coverage would further the proprietary interests of the City. Proprietary interest includes, but is not limited to:
(i) the public perception of the services or products rendered to them by a business;
(ii) security concerns related to the location of the business or any product or service the business produces; or
(iii) an Employer’s industry-specific job classifications as defined in the regulations.
(m) “Subcontractor” means any person not an Employee who enters into a contract:
(1) to assist in performance of a Service Contract;
(2) with a Public Lessee or Licensee, sublessee, sublicensee or Contractor to perform or assist in performing services for the leased or licensed premises.
(n) “Willful Violation” means that the Employer knew of its obligations under this article and deliberately failed or refused to comply with its provisions.
SECTION HISTORY
Added by Ord. No. 171,547, Eff. 5-5-97.
Amended by: In Entirety, Ord. No. 172,336, Eff. 1-14-99; Subsec. (e), Ord. No. 176,155, Eff. 9-22-04; Subsec. (e), Ord. No. 176,283, Eff. 12-25-04, Oper. 9-22-04; Subsecs. (a) through (l) re-lettered (d) through (o), respectively and new Subsecs. (a), (b), and (c) added, Ord. No. 180,877, Eff. 10-19-09; In Entirety, Ord. No. 184,318, Eff. 7-7-16; In Entirety, Ord. No. 185,321, Eff. 1-20-18.
(a) Wages. An Employer shall pay an Employee for all hours worked on a Service Contract or if a Public Lease or License or for a Contractor of a Public Lessee or Licensee, for all hours worked furnishing a service relating to the City, a wage of no less than the hourly rates set under the authority of this article.
(1) Non-Airport Employee Wages.
(i) If an Employer provides an Employee with health benefits as provided in Section 10.37.3 of this article, the Employee shall be paid the following:
a. On July 1, 2018, the wage rate for an Employee shall be no less than $13.25 per hour.
b. On July 1, 2019, the wage rate for an Employee shall be no less than $14.25 per hour.
c. On July 1, 2020, the wage rate for an Employee shall be no less than $15.00 per hour.
d. On July 1, 2022, and annually thereafter, the hourly wage rate paid to an Employee shall be adjusted consistent with any adjustment pursuant to Section 187.02 D. of the Los Angeles Municipal Code.
(iii) Section 10.37.11 is not applicable to this subdivision.
(2) Airport Employee Wages.
(i) If an Employer servicing the Airport provides an Employee with health benefits as provided in Section 10.37.3 of this article, the Employee shall be paid the following:
a. On July 1, 2017, the wage rate for an Employee shall be no less than $12.08 per hour.
b. On July 1, 2018, the wage rate for an Employee shall be no less than $13.75 per hour.
c. On July 1, 2019, the wage rate for an Employee shall be no less than $15.25 per hour.
d. On July 1, 2020, the wage rate for an Employee shall be no less than $16.50 per hour.
e. On July 1, 2021, the wage rate for an Employee shall be no less than $17.00 per hour.
f. Beginning on July 1, 2022, the wage rate for an Employee shall increase annually, on July 1, to an amount $2.00 above the minimum rate under the City’s Minimum Wage Ordinance for that same period of time.
a. On July 1, 2017, an Employer servicing the Airport shall pay an Employee an additional wage rate of $5.18 per hour.
b. Beginning on July 1, 2018, an Employer servicing the Airport shall pay an Employee an additional wage rate per hour equal to the health benefit payment in effect for an Employee pursuant to Section 10.37.3(a)(5).
(3) An Employer may not use tips or gratuities earned by an Employee to offset the wages required under this article.
(b) Compensated Time Off. An Employer shall provide an Employee compensated time off as follows:
(1) An Employee who works at least 40 hours per week or is classified as a full-time Employee by the Employer shall accrue no less than 96 hours of compensated time off per year.
(2) An Employee who works less than 40 hours per week and is not classified as a full-time Employee by the Employer shall accrue hours of compensated time off in increments proportional to that accrued by an Employee who works 40 hours per week.
(3) General Rules for Compensated Time Off.
(i) An Employee must be eligible to use accrued paid compensated time off after the first 90 days of employment or consistent with company policies, whichever is sooner. Compensated time off shall be paid at an Employee’s regular wage rate at the time the compensated time off is used.
(ii) An Employee may use accrued compensated time off hours for sick leave, vacation or personal necessity.
(iii) An Employer may not unreasonably deny an Employee’s request to use the accrued compensated time off. The DAA, through regulations, may provide guidance on what is considered unreasonable.
(iv) The DAA may allow an Employer’s established compensated time off policy to remain in place even though it does not meet these requirements, if the DAA determines that the Employer’s established policy is overall more generous.
(v) Unused accrued compensated time off shall carry over until time off reaches a maximum of 192 hours, unless the Employer’s established policy is overall more generous.
(vi) After an Employee reaches the maximum accrued compensated time off, an Employer shall provide a cash payment once every 30 days for accrued compensated time off over the maximum. An Employer may provide an Employee with the option of cashing out any portion of, or all of, the Employee’s accrued compensated time off, but, an Employer shall not require an Employee to cash out any accrued compensated time off. Compensated time off cashed out shall be paid to the Employee at the wage rate that the Employee is earning at the time of cash out.
(vii) An Employer may not implement any unreasonable employment policy to count accrued compensated time off taken under this article as an absence that may result in discipline, discharge, suspension or any other adverse action.
(4) Compensated Release Time. An Employer servicing the Airport who holds a Certified Service Provider License Agreement and is subject to this article shall comply with the following additional requirements:
(i) A CSPLA Employer shall provide an Employee at the Airport, 16 hours of additional compensated release time annually to attend and complete emergency response training courses approved by the Airport.
(ii) By December 31, 2018, and continuing thereafter on an annual basis, an Employee of a CSPLA Employer shall successfully complete the 16 hours of emergency response training.
(iii) An Employee of a CSPLA Employer hired after December 31, 2018, shall complete the 16 hours of emergency response training within 120 days of the first date of hire.
(iv) The 16 hours of compensated release time shall only be used to attend Airport approved annual emergency response training courses. The 16 hours of compensated release time does not accumulate or carry over to the following year. The 16 hours of compensated release time shall not be included as part of the 96 hours of compensated time off required under this article.
(c) Uncompensated Time Off. An Employer shall provide an Employee uncompensated time off as follows:
(1) An Employee who works at least 40 hours a week or is classified as a full-time Employee by an Employer shall accrue no less than 80 hours of uncompensated time off per year.
(2) An Employee who works less than 40 hours per week and is not classified as a full-time Employee by the Employer shall accrue hours of uncompensated time off in increments proportional to that accrued by an Employee who works 40 hours per week.
(3) General Rules for Uncompensated Time Off.
(i) An Employee must be eligible to use accrued uncompensated time off after the first 90 days of employment or consistent with company policies, whichever is sooner.
(ii) Uncompensated time off may only be used for sick leave for the illness of an Employee or a member of the Employee’s immediate family and where an Employee has exhausted their compensated time off for that year.
(iii) An Employer may not unreasonably deny an Employee’s request to use the accrued uncompensated time off. The DAA, through regulations, may provide guidance on what is considered unreasonable.
(iv) Unused accrued uncompensated time off shall carry over until the time off reaches a maximum of 80 hours, unless the Employer’s established policy is overall more generous.
(v) An Employer may not implement any unreasonable employment policy to count accrued uncompensated time off taken under this article as an absence that may result in discipline, discharge, suspension or any other adverse action.
SECTION HISTORY
Added by Ord. No. 171,547, Eff. 5-5-97.
Amended by: In Entirety, Ord. No. 172,336, Eff. 1-14-99; Subsec. (a), Ord. No. 173,285, Eff. 6-26-00, Oper. 7-1-00; Subsec. (a), Ord. No. 180,877, Eff. 10-19-09; In Entirety, Ord. No. 184,318, Eff. 7-7-16; In Entirety, Ord. No. 185,321, Eff. 1-20-18; Subsec. (a)(1), Ord. No. 185,745, Eff. 10-15-18.
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