Section 2-408 of the City Code requires, for certain service contracts, that contractors pay employees the living wage rates that have been approved by the City Commission for any given year. The current living wage rates, which were approved by the City Commission on September 25, 2019 and became effective on January 1, 2020, are:

$15.00 per hour without health care benefits; or

$11.78 per hour with health care benefits of at least $3.22 per hour.

The current rates are the result of a three-year phased-in approach originally approved by the City Commission in October 18, 2017 with the goal of establishing $15.00 as the minimum living wage rates by 2020.

The City Code stipulates that the living wage rates may be adjusted annually for inflation by the City Commission. Typically, increases to the rates are considered by the City Commission during annual budget discussions. As is customary, the Administration refers an item to the Finance and Economic Resiliency Committee for a discussion on adjusting the living wage rates for the subsequent year.  Accordingly, on February 12, 2020, the Administration requested a referral to the Finance and Economic Resiliency Committee for a discussion and direction on any increases to the current living wage rates that the City Commission wished to consider.

Typically, the living wage hourly rate increases are calculated pursuant to any prior year increases in the overall Consumer Price Index (CPI) for the local area. Increases in the health care benefits portion are rate increases are calculated pursuant to any prior year increases in the CPI for medical costs for the local area. However, the living wage law states that any annual increase to the living wage rates shall not exceed the corresponding increase (if any) provided to unclassified city employees.

The fiscal impact of adopting a living wage increase pursuant to the increase in the CPI over the previous year is stated in Table 1. It is important to note that, which the CPI increase to the health care benefit was actually 3.4%, Section 2-408(d) of the City Code caps places a 3% cap on increases.

Section 2-408(d) also states that any annual increase to the living wage rates shall not exceed the corresponding increase (if any) provided to unclassified city employees. In this regard, the City’s past practice has been to consider the cost of living adjustment (COLA) approved for unclassified staff.  Therefore, the fiscal impact of adopting a living wage increase equivalent to the proposed 1% COLA for unclassified staff is stated in Table 2.