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RFP No. 59548 Page 32 of 40 Subcontractors/Sub-Lessees Affects both for-profit and non-profit employers that enter into a subcontract with the primary employer/contractor and assumes some of the obligations of the primary employer/contractor. Subcontractor’s and sub-lessee’s are also subject to the same living wage provisions and requirements as the primary employer or lessee. Employees who are or would be covered under the state prevailing wage rate requirement would only be covered by the Ordinance if their current prevailing wage rate was lower than the living wage rate. Compensation Covered businesses are required to pay no less than $17.73 per hour or $16.23 with health benefits valued at least $1.50 per hour, subject to annual CPI adjustment. Reporting and Compliance Covered businesses self-verify compliance and are subject to periodic re-verification and audit of living wage related records. Frequently Asked Questions 1. What is the City of San Leandro’s Living Wage Ordinance? “Living wage” is an hourly wage level that sets wages at a level higher than the Federal or State minimum wage. The City of San Leandro Ordinance specifies that an hourly wage and a health benefit dollar level be applied to certain contracts, agreements and leases between the City and for-profit and non-profit entities. It does not apply to every business in the City. 2. When does the Living Wage take effect and when do businesses have to start complying and provide higher wages to their employees? September 1, 2007 is the effective date. Applicable businesses must comply with the Ordinance when they enter into a lease, contract or concessionaire or other agreement with the City of San Leandro, or when an existing agreement is amended to benefit the business. For example, if a lease contract expires in two years, compliance would not be required for the two years the lease remains in effect and unchanged. New contracts entered into or amended thereto affecting financial aid or expending the term after the eff ective date are subject to the Ordinance. Covered employees would be entitled to the higher wage on the effective date of the new or modified contract or agreement. All contracts and agreements with the City of San Leandro will include the requirement that the Living Wage Ordinance shall be complied with. 3. What is the required Living Wage rate? Covered businesses are required to pay no less than $17.73 per hour, which includes wages and employer health benefits. Health benefits must be valued at $1.50 per hour in order to be counted towards the requirement. In other words, an employee not receiving any employer