Section 2-408 of the City Code requires, for certain service contracts, that contractors pay employees the living wage rates that the City Commission has approved for any given year. The current living wage rates, which were approved by the City Commission in September 2020 and became effective on January 1, 2021, are:

• $15.15 per hour without health care benefits; or
• $11.90 per hour with health care benefits of at least $3.25 per hour.

The City Code stipulates that the living wage rates may be adjusted annually for inflation by the City Commission. 

On April 6, 2022, the Commission approved a referral item to the Finance and Economic Resiliency Committee to discuss and make a recommendation regarding the living wage rates for the calendar year beginning January 1, 2023.

As required in the City Code, living wage hourly rate increases are calculated based on any prior year increases in the overall Consumer Price Index (“CPI”) for the local area. Increases in the health care benefits portion are calculated based on any prior year increases in the CPI for medical costs for the local area.

The City Code stipulates that any increase to the living wage rates may not exceed the cost of living adjustment (COLA) approved for unclassified employees. It is important to note that, at the time of this memorandum, a cost of living adjustment (COLA) for unclassified employees has not been finalized. As a result, the exact fiscal impact of any COLA increase for unclassified employees cannot be established at this time. Nonetheless, in order to assist the Committee with the discussion on this item, the Administration has calculated the fiscal impact of a living wage increase, estimated based on current service hours, for every 1% increase in the current living wage rates (See table below).

Pursuant to Section 2-408(d) of the City Code, the following shall apply when considering any increase to the living wage rates:

1. Regardless of any CPI increase, the City Code stipulates a maximum increase to the living wage rates of 3%. Therefore, the maximum fiscal impact, based on current service hours, would be $400,027.05.
2. Any increase to the living wage rates shall not exceed the corresponding increase provided to unclassified city employees

The information contained herein is provided to assist the Committee in its discussion on the living wage rates for the calendar year beginning January 1, 2023.