Living Wage Ordinance – Detroit

Date: 21 Nov 2008 | posted in: equity | 0 Facebooktwitterredditmail

At the ballot box on November 3, 1998, Detroit voters overwhelmingly approved a living wage measure that requires city service contractors or recipients of city financial assistance of $50,000 or more to pay employees a wage equivalent to the federal poverty line for a family of four.


FINANCE DEPARTMENT — PURCHASING DIVISION
NOTICE OF DETROIT LIVING WAGE RATES
ADJUSTMENT EFFECTIVE June 1, 2009

Inaccordance with Ordinance No. 45-98, being Sections 18-5-81 through 18-5-86 of the 1984 Detroit City Code, titled Detroit Living Wage Ordinance’ (Ordinance), the Purchasing Division of the City Finance Department has determined that the following adjustments to the living wage rates are necessary to reflect changes in the federal poverty level:

1) Where health benefits as defined in the Ordinance are provided to the employee, the living wage rate is $11.03 per hour (100% of the federal poverty level income guideline for a family of four); and

2) Where health benefits as defined in the Ordinance are not provided to the employee, the living wage rate is $13.78 per hour (125% of the federal poverty level income guideline for a family of four).

These rates are based upon the 2009 federal poverty level income guideline of $22,050.00 for a family of four in the contiguous 48 states and the District of Columbia, as published in the Federal Register: January 23, 2009.  In order to provide the notice to employers required pursuant to Section 18-5-83 (d) of the Ordinance, these rates shall become effective June 1, 2009.

These rates will be further adjusted periodically when the federal poverty level income guideline is adjusted by the U.S. Department of Health and Human Services.

The Ordinance applies to employers who are contractors’ or grantees’ as defined in the Ordinance, where the contract or grant is entered into or renewed after the effective date of the Ordinance, which is December 16, 1998.


Current poverty guidelines can be accessed at the Poverty Guidelines, Research, and Measurement web site of the U.S. Dept. of Health and Human Services. The Detroit ordinance also requires companies to attempt to hire Detroit residents to fill any new jobs created as a result of the contract assistance granted by the city.


Detroit Living Wage Ordinance

Ordinance No. 45-98, being Sections 18-5-81 through 18-5-86

SEC. 18-5-72. APPLICABILITY.

  1. This ordinance applies to any individual, proprietorship, partnership, corporation, trusts, association or other entity which is a contractor or a grantee, defined as following:
  1. a contractor is a party to a contract with the City of Detroit primarily for the furnishing of services (as opposed to the purchasing or leasing of goods or property), where the total expenditure for such contract exceeds $50,000.00, including any subcontractor of such contractor:
  2. a granted is the recipient of any financial assistance from the City in excess of $50,000.00, including any federal grant program administered by the city, revenue bond financing, planning assistance, tax increment financing, tax credits or any other form of assistance, if the purpose of the assistance is economic development or job growth, including any contractors, subcontractors or leaseholders at the subsidized sites.
  1. The minimum wage requirements of this ordinance shall apply with respect to any employee of a contractor or grantee who is employed either part-time or full-time at a job site covered in whole or in part by the contract, or to any employee of a grantee who is employed either part-time or full-time at any job site covered or subsidized in whole or in part under the grant of financial assistance.

SEC. 18-5-73. MINIMUM REQUIREMENTS

  1. Each contractor and grantee shall pay its employees wages which are at least equal to a living wage as defined in this ordinance.
  2. A living wage means an hourly wage rate which on an annual basis (based on forty hours per week, fifty weeks per year) is equivalent to either of the following:
  1. One hundred and twenty five percent (125%) of the federal poverty level; or
  2. One hundred percent (100%) of the federal poverty level; if health benefits are provided to the employee. Health benefits, for purposes of this ordinance mean fully paid. comprehensive family medical coverage.
  1. The federal poverty level means the United States poverty level income guideline for a family of four, as adjusted periodically.
  2. The City Purchasing Department shall adjust the living wage as necessary to incorporate changes in the federal poverty level. The Purchasing Department shall publish a bulletin announcing any changes in the amount of the living wage, and shall inform each contractor and grantee of such changes in writing, prior to such adjustment becoming effective.
  3. To the greatest extend feasible, a covered contractor or grantee shall attempt to fill all new positions created as a result of a contact or financial assistance with employees who are resident of the City of Detroit. The foregoing shall not be interpreted as [a] residency requirement: nor shall it cause any contractor or grantee to terminate, transfer, or lay off any employee who is on the payroll at the time coverage under this ordinance becomes effective for that contractor or grantee.

SEC. 18-5-74. ENFORCEMENT AND PENALTIES

  1. Each City contract or grant or financial assistance shall require compliance with this ordinance. Each such contract or grant shall provide that willful or repeated violation of this ordinance will entitle the City to terminate the contract or grant.
  2. Every contractor or grantee shall post in a conspicuous place or any job site subject to this ordinance a copy of the minimum living wage rate required under this ordinance the City shall notify contractors and grantees of the minimum living wage rate, and adjustments thereto, within a reasonable period before they become effective.
  3. A contractor or grantee who violates the living wage requirement shall pay to each Employee affected the amount of the deficiency, for each the violation continues. Willful violation of the ordinance will result in a penalty paid to the City in the amount of $50.00 per violation for each day the violation continues . The City may withhold from payment, grants, of financial assistance to the employer such amounts as necessary to effectuate the payments provided in this paragraph.
  4. A contractor or grantee who is assessed the $50 penalty provided above based on more than three (3) incidents within a two (2) year period shall be barred from bidding on or entering into any contracts with the City or from receiving any financial assistance from the City (as defined in Section 2(b) [sic] [Section 18-5-72(b)1 . for a period of ten (10) years from the date of the last violation. An incident for purposes of this paragraph means one payroll, payday, or date of payment, regardless of the number of employees affected by each incident.
  5. A person affected by a violation of this ordinance may file a complaint with [sic] City Purchasing Department, which will have ninety (90) days to investigate and remedy the complaint. If the complaint is not resolved to the complainant’s [sic] satisfaction within the ninety day period, the complainant [sic] or his or her representative may bring an action in the Wayne County Circuit Court to enforce this ordinance. The court shall award reasonable attorneys fees and costs to a person who prevails in an enforcement action. This ordinance shall not be constructed [sic] to limit an employee’s right to bring legal action for violation of any other minimum compensation or wage and hour law.

SEC. 18-5-75. SEVERABILITY.

Ifany portion or provision of this ordinance is declared invalid or unenforceable by a court of competent jurisdiction, the remaining provisions shall remain in full force and effect.

SEC. 18-5-76. EFFECTIVE DATE.

Thisordinance shall apply to any contract entered into and any financial assistance granted or renewed after the effective date of this ordinance. Entering into an agreement for extension of a contract for a period beyond its original term shall be considered entering into a contract for purposes of this paragraph.

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