In a unanimous vote, The New Orleans City Council on Thursday passed legislation meant to strengthen compliance with the city’s Living Wage Ordinance. The ordinance, which passed in 2015 and took effect in 2016, requires city contractors with contracts over $25,000 a year, as well as organizations that receive more than $100,000 in municipal financial assistance in a year, to pay their employees a wage higher than the federal minimum wage of $7.25 per hour. (Louisiana doesn’t have a state minimum wage, and Louisiana law prohibits the city from creating its own)
In 2016, the city’s living wage was set at $10.55. But the wage automatically ticks up every year to match inflation and is currently at $11.19, according to the city’s website. The law also mandates seven paid leave days a year.
Already, the ordinance requires the city’s Chief Administrative Office to monitor compliance. It also dictates that anyone can submit a complaint to that office, and that it is required to complete an investigation on the potential violation within 90 days.
But the provisions passed on Thursday will now force the city’s chief administrative officer — currently Gilbert Montaño — to present an annual report to the council “detailing its efforts to monitor compliance.” The reports will be mandated starting in 2021 and will be presented during the Mayor’s annual budget presentation.
The report will have to identify every “city contract or city financial assistance agreement” that is bound by the law. For each of those organizations, the report will disclose the wages of the lowest paid worker, as well as the number of paid leave days offered to employees making less than 130 percent of the city’s living wage.
Currently, there is no publicly facing city database of companies and organizations bound by the Living Wage Ordinance. The new reporting requirements on the ordinance could be extensive, accounting for scores of city contracts and their subcontractors.
In addition, organizations that receive more than $100,000 in “city financial assistance” in a 12-month period are bound by the Living Wage Ordinance for the following ten years. “City financial assistance,” explicitly includes grants, bond financing, debt forgiveness, waivers of city-imposed fees, payment in lieu of taxes (PILOT) programs and tax abatements and refunds.
Thursday’s ordinance also requires all future multi-year city contracts to explicitly provide for the annual inflation adjustment that’s applied to the living wage rate.
The Living Wage Ordinance, and the city’s success enforcing it, has come under scrutiny in the past. In 2016, when the law went into effect, it was reported that some contractors, who had inked contracts with the city before the law went into effect, were allowed to continue to pay their workers at rates that were well below the city’s living wage.
The city’s enforcement of the law again came into question in recent months due to a high-profile garbage hoppers’ strike. Workers in eastern New Orleans have been picketing their city trash contractor Metro Service Group since May 5 over transgressions including lack of adequate pay, longstanding workplace safety issues and a lack of adequate protection from new safety issues posed by the coronavirus pandemic.
The striking workers were getting paid $10.25 per hour before they went on strike. They’re now demanding $15 per hour along with additional hazard pay during the pandemic. At the very least, they argue, their wages prior to the strike violated the Living Wage Ordinance. Metro is one of three companies the city contracts with for residential garbage collection and — with a contract worth millions of dollars per year — is bound by the ordinance. The hoppers are also demanding seven days of annual paid leave.
In May, in response to a question about whether the $10.25 wages were a violation of the law, Mayor LaToya Cantrell’s office told The Lens that “based on the award date of Metro’s contract with the City, a minimum wage of $10.25 is required.”
Two days later, in response to follow-up questions, a Cantrell spokesman said that “the $10.25 reference was an error.”
“Metro is required to fully comply with the City’s living wage requirement,” the follow-up statement said. “The City is currently evaluating complaints as to Metro and will respond as may be appropriate.”
Metro recently set up a website (with the help of PR firm Beuerman Miller Fitzgerald) called Metrotruth.com to dispute some of the hoppers’ allegations. On the site, Metro claims that 70 percent of its workforce gets paid at least $11.19 in compliance with the Living Wage Ordinance.
The striking hoppers fit into that remaining 30 percent. They are not directly employed by Metro, but work instead for a temporary staffing agency, Washington state-based PeopleReady. Metro subcontracts with PeopleReady for the extra labor.
According to the Living Wage Ordinance, however, the living wage requirements should still apply to subcontracted hoppers.
“Prior to entering into a subcontract, a city contractor, beneficiary, or other covered employer shall notify subcontractors in writing of the requirements and applicability of this article,” the ordinance says. “City contractors and beneficiaries shall be deemed responsible for violations of this article by their subcontractors.”
Failure to comply with the ordinance represents a breach of contract, according to the law, and allows the city to modify, suspend or completely terminate the contract. Violators, according to the ordinance, can face fines. And each day that a violation occurs can be processed as a separate violation.
