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i -- ~ . ~c CITY OF SAN LEANDRO STAFF REPORT Date: January 8, 2004 To: John Jermanis, City Manager From: Ed Schilling, Assistant City Manager By: Eric Figueroa, Assistant to the City Manager Subject: UPDATE REGARDING LIVING WAGE LAWS SUMMARY AND RECOMMENDATION Council directed staff to provide an update on living wage laws. This report is for information only, and no action is required. BACKGROUND There are three types of legislation that government can use to set a wage floor for workers. Minimum wage law is universal to almost every worker in the United States. Since 1938 the federal government has set a minimum dollar amount that all employers must pay their employees. The current minimum wage established by the federal government is $5.15 per hour. The states can set a minimum wage that is higher than the federal level and a handful of cities have established their own minimum wage at a higher amount than either the federal or state levels. For example, the State of California increased the minimum wage level on January 1, 2002 to $6.75 per hour. In November 2003 the City of San Francisco increased the minimum wage level to $8.50 per hour for all businesses within San Francisco's city limits. 'San Francisco is the first City within California, and the fourth nationwide, to establish the minimum wage within a local jurisdiction. The second type of legislation used to set a wage floor is prevailing wage law. Prevailing wage laws require a company to pay workers at the median wage point for an occupation and will vary based on location and job classification. On public works projects of $5,000 or more, general law cities in California are obligated to pay prevailing wages set by the California Department of Industrial Relations. Charter cities may exempt themselves from prevailing wage requirements for locally funded projects and may establish their own standardized wage rates for contracted public works projects. The City of San Leandro adopted a modification to the Municipal Code through Ordinance No. 85-309 on October 25, 1985 that required all City contracts in excess of $5,000 to be subject to state prevailing wage requirements.