The Rochester Living Wage Ordinance, Ordinance No. 2001-36, was adopted in 2001 by a unanimous vote of City Council with the support of the Mayor. It set minimum wage rates for employees of companies entering into contracts for services with the City of Rochester. It applies to contracts in excess of $50,000. Certain contracts are exempt as are certain types of employees. The basis for the initial wage rates was the Federal Poverty Guideline- the wage was set so that a full-time employee with a family of four would not earn below the poverty level. The ordinance took effect July 1, 2001.
City Council passed this law to encourage employers to pay living wages in this community. The "living wage" rate is adjusted annually to keep up with inflation. In 2001 the wage was set at $8.52 per hour if the employer provides health insurance and $9.52 if not. The current rate, good through June 30, 2013, is $11.11 for employees offered health insurance benefits and $12.41 for those not offered these benefits.
Contractors are required to post notices to employees informing them of their rights under this law, and giving them a contact person in the City Administration to share complaints with (Contract Administrator). The contractor is also required to provide the City with a listing of job titles and their corresponding wages. This information is to be filed by the City Administration.
The ordinance also required that a review and evaluation be conducted two years after its adoption. This evaluation was intended to assess the law's effectiveness in providing fairer wages for workers, and whether it is being enforced according to its guidelines. While some information has been collected, a full evaluation has not yet occurred. The purpose of this report is to serve as a basic evaluation of the implementation of the law.
Facts About the City's Implementation of the Law
The City of Rochester implemented the Living Wage Ordinance in July of 2001. Between July 1, 2001 and March 19, 2004 the City entered 200 agreements totaling $33,680,476 that were covered by the ordinance. This is out of 1,810 agreements adding up to a total value of $88,327,234. Thus, the law was applied to 11% of City contracts but these represent 38% of the value in dollar terms. The remaining contracts were exempt under the law for a variety of reasons.
The administration chose a decentralized model for the implementation, with Department Heads overseeing the individual contractor's compliance. The Law Department distributed a memo to Department Heads clarifying the law and its requirements. Included was a template of a notice that Contractors were required to display for their employees informing them of their rights under the law. Also included was standard contract language that was incorporated into all contracts subject to the law. These actions are consistent with the implementation contemplated when the law was adopted.
In 2003 the Assistant to the Mayor surveyed the Departments for compliance with the Living Wage Law requirements. Based on his report of these responses the Departments have included the appropriate language in contracts but have not fully complied with the record keeping requirements of the Ordinance. In particular, it is not clear whether in most cases the contractors have submitted the list of job titles and wage rates. However, as no grievances were reported filed with Contract Administrators, we have no reason to believe that contractors are not complying with the wage requirements of the ordinance.
This Finance Director's Office has copies of:
- The Ordinance
- Original Law department memo and attachments.
- Administration's survey of compliance (4/3/2003)
- Finance memo readjusting rates. (5/24/2012)
- Listing of covered Agreements
- Listing of exempt agreements
- Contracts valued less than $50,000
- Memo summarizing results of Evaluation (1/6/2005)
The ideal way to evaluate the impact of this law would be to compare 'before and after' data. However, we do not have enough information to really accomplish this. Prior to the adoption of the law in 2001 the City did not generally collect information on wages paid to employees of contractors (except in construction contracts where required by State and Federal law). Since 2001 it appears that while some wage information has been collected it is not comprehensive and it is not centralized in a data base that would allow for ready analysis.
The City Administration, in the Fall of 2004, conducted an evaluation of the Living Wage Ordinance. Two surveys were developed and distributed: one for vendors contracting with the City for services, the other for Department Heads/Units within the city administration awarding those contracts. The two surveys were written with the intent to keep them short, focused on questions raised during the adoption of the Living Wage Law and to gather information regarding the impact on vendors and their employees. The surveys were distributed with the option that the responses would remain anonymous, as this might increase the response rate.
One hundred and eighty-seven vendor surveys were distributed. Forty-one responses were received. Of which thirty-four were usable.
Seventeen City Administrative units were surveyed. Nineteen responses were received. The Department of Environmental Services copied and redistributed the survey within its department, creating more responses than surveys. Eight of these nineteen were useable. The other eleven indicated a lack of experience either in contracting or with vendors covered under the Ordinance.
Results show that most vendors responded that rules established in the law were clear and not burdensome. Slightly more than half (55%) responded that they posted notice of the law. Most (79%) reported that the cost of operations had not increased nor did they (91 %) have to reduce their workforce.
Departments reported that generally, the law was not complicated to follow and was not overly time consuming to implement. Half (50%) of the responses reported receiving and filing information showing vendors compliance with the law, but that this information was not difficult to obtain from contractors. Most vendors were provided notices to post (71%), however, compliance with this was not checked on (75%). 88% of department heads responding received no complaints from employees. 75% of Department Heads received no complaints from their employers (vendors). Department Heads reported that the Living Wage Law did not reduce the number or quality of vendors (100%) applying for contracts with the City.
Comments added to the responses demonstrated a genuine agreement with the need to give employees a livable wage. These comments also suggested that clarity of the law's language, and methods for its implementation and tracking in the City could be improved.
It would seem that the Living Wage Ordinance, implementation and evaluation is a successful first step in promoting fair and appropriate wages in the Rochester area. The evaluation demonstrates some positive impact on employees covered in city contracts without too burdensome a process for vendors or City Departments. It also shows some areas in which the procedures can be improved:
- Additional training and clarity around the requirements of the law, especially with regard to posting of notices for employees.
- Moving toward centralized tracking of vendors' compliance and employees' grievances. This would clarify who is responsible for monitoring.
- Using current technologies to provide knowledge of the law its implementation and ongoing evaluation; including making information available on the city's website.