The City of San Jose ENFORCING WAGE STANDARDS THROUGH LABOR COMPLAINTS AND CONTRACTS

Main Take Away

¡ Cities have the power to protect wages

everyday through city contracts;

¡ A small team based unit can oversee a vast

amount of city wage enforcement activities;

¡ Wage enforcement improves the city’s

economic stability; and

¡ A charter city committed to wage enforcement

can incentivize smaller localities to pursue its own

wage enforcement policies.

Why Does San Jose Protect Wages for its Citizens

¡  It is beneficial to the health and welfare of all citizens of San Jose that all workers are paid wages that enable them not to live in poverty;

¡  The City awards many contracts to employers to provide services to the public and City government;

¡ Many service employees in San Jose live at or near the poverty line; and

¡  The payment of such inadequate compensation negatively affects the quality of services to the City and the public.

Office of Equality Assurance The Unit

•  8 staff members total;

•  1 Director;

•  3 staff members oversee

contractual compliance;

•  1 staff member oversees

minimum wage

compliance; and

•  Three staff members are

clerical and support.

What It Oversees

¡  Over 1,000 city contracts;

¡  1.7 Billion dollars in city

business;

¡  The paystubs of every

employer that provides

service and public works to

San Jose; and

¡  Wage enforcement

complaints for several

surrounding cities.

Contracts as Enforcement ¡  San Jose has enforced wages through contracts since

1998;

¡  The wages protected by these contracts are called the living and prevailing wage;

¡  Applies to City service and public works contracts; and

¡  As a condition of being awarded city business, employers must submit paystubs for all employees working under a city contract or face paying potential liquidated damages.

Airport •  Airport contracts are still

controlled through the San Jose’s living and prevailing wage, but are lower;

•  Purpose of lower wages is to make SJO more competitive with Oakland and San Francisco Airports.

Complaint Based Enforcement

¡  Applies to the City’s minimum wage ordinance that was adopted in 2013;

¡  Employee are notified about their rights and ability to make complaints by mandatory workplace notices;

¡  A complaint is made with the Office of Equality Assurance (“OEA”);

¡  OEA sends notice to the employer of a possible workplace violation;

¡  Employer must respond within 10 days; and

¡  All paystubs for the work site must be produced.

Complaint Resolution Informal (preferred)

¡  The OEA conducts investigation, which may include document requests, interviews, and payroll records;

¡  Issue a notice of violation;

¡  If employer contests violation, it may appeal to the Director of OEA;

¡  Most disputes end at this phase because the OEA may waive fees and liquidated damages.

Formal ¡  The dispute moves to San

Jose City Hall for adjudication with a hearing officer;

¡  Employer must deposit the assessed fine with the City before a hearing officer is assigned;

¡  Hearing commences that allows employer to call witnesses and produce evidence; and

¡  Final determination by hearing officer.

Enforcement Results

•  700 wage violations issued;

•  $3,400,000 recovered in

back wages;

•  $2,100,000 recovered in

liquidated damages; and

•  2 employers barred from

doing business with San

Jose.

Local Impact ¡  The cities of Santa Clara, Sunnyvale, Mountain

View, and Palo Alto contract out its wage enforcement with San Jose because of its size;

¡  This has effectively created a hub and spoke model for wage enforcement;

¡  This allows smaller cities to leverage wage violators with the backing of a charter city; and

¡  San Jose provides a template for smaller cities to draft a minimum wage ordinance.

What About Undocumented Workers?

¡  It is the policy of the OEA that all workers regardless of immigration status are paid at least the city’s minimum wage for all work performed within the city.

¡  The OEA does not inquire about a complainants immigration status; and

¡  (Informally Stated) Would refuse to disclose an individuals immigration status to federal authorities.

Questions?