LAWA Living Wage Q & A Session OFFICE OF CONTRACT COMPLIANCE

Timeline September 9, Council passed an amendment to the Living Wage Ordinance October 19, 2009 – Effective Date January 19, 2010 – Operative Date

Amendment Highlights On September 9, 2009, the Los Angeles City Council approved an amendment to Section 2 Subsections (a) through (l) of Section of the Los Angeles Administrative Code to re-designate as Subsections (d) through (o), and three new Subsections, are added and designated as (a) through (c).

Highlights Continued Wage required is $10.30 per hour Health Benefit to be provided by Airport Employers is $4.50 per hour towards the provision of health care benefits for Employees and their dependents. Employees cannot waive the health benefits offered by an Airport Employer when there is no out-of-pocket cost to the Employee.

Highlights Continued Health Benefit payments by Airport Employers shall be adjusted annually to correspond with adjustments, if any, to the retirement benefits paid to members of the Los Angeles City Employees Retirement System (LACERS). Any increase in the Health Benefits shall take effect upon publication of a bulletin by OCC announcing the adjustment.

Highlights Continued Once every three (3) years the Office of Administrative and Research Services shall evaluate and report the health benefit payment by Airport Employers to determine whether the payment accurately reflects the cost of health care. Additionally, it will asses the impacts of the health benefit payment on Airport Employers and Airport Employees.

Applying the Living Wage Ordinance The Living Wage applies to three types of contracts: – City Financial Assistance Recipients (CFARS) – Service Contracts – Public Lease/License

CFAR Any person who receives from the City discrete financial assistance for economic development or job growth expressly articulated and identified by the City, meeting the following monetary thresholds: – Assistance given in the amount of $1,000,000 or more in any twelve-month period shall require compliance for five years from the date the assistance reaches the threshold. – Assistance given in any twelve month period totaling less than $1,000,000, but at least $100,000 in what is reasonably contemplated at the time to be on a continuous basis shall require compliance for one year from the date the assistance reaches the threshold.

Service Contracts A contract let to a contractor by the City primarily for the furnishing of services to or for the City (as opposed to the purchase of goods or other property or the leasing or renting of property) and that involves an expenditure in excess of $25,000 and a contract term of at least 3 months; but only where any of the following applies: – At least some of the services rendered are rendered by employees whose work site is on property owned by the City; or – The services could feasibly be performed by City employees if the awarding authority had the requisite financial and staffing resources; or – The Designated Administrative Agency (DAA) has determined in writing that coverage would further the proprietary interests of the City.

Public Lease/License A lease or license of City property on which services are rendered by employees of the public lesee or licensee or sublesee or sublicensee, or of a contractor or subcontractor, but only where any of the following applies: – The services are rendered on premises at least a portion of which is visited by substantial numbers of the public on a frequent basis (including, but not limited to, airport passenger terminals, parking lots, golf courses, recreational facilities); or – Any of the services could feasibly be performed by City employees if the awarding authority had the requisite financial and staffing resources; or – The DAA has determined in writing that coverage would further the proprietary interests of the City

Liberal Interpretation of Coverage; Rebuttable Presumption of Coverage LWO Section states the following: – The definitions of CFAR, Public Lease/License and of Service Contract shall be liberally interpreted so as to further the policy objectives of this article. – All CFAR, Public Lease/License and Service Contracts shall be presumed to meet the corresponding definitions, subject, however to a determination by the DAA (OCC)

Determination of Non-Coverage RFP and Bid Documents contain the LW-10 Form – Non-Coverage/Exemption – Contractor & subcontractors seeking a coverage determination or exemption must submit the form to OCC for a determination or approval.

Most Common Questions

Common Questions 1. Does the amendment require our company to provide family healthcare if requested by our employees? If so, what is the definition of family?

Common Questions 2. Is there a minimum level of healthcare services that we must meet? If so, what is it?

Common Questions 3. January 19 th is the implementation date and it falls in the middle of the month, is there any flexibility in this date?

Common Questions 4. Many insurance companies require at least a 30 day period of collecting premiums before service is provided. Has this been addressed in the ordinance?

Common Questions 5. Does the Living Wage apply to part-time employees?

Common Questions 6. If we offer $14/hour and $3/hour for benefits, do we have to adjust the hourly rate to $14.80?

Common Questions 7. What if an employee declines to receive benefits?

Common Questions 8. Must employers provide Health Care to employees over 65 who are eligible for Medicare?

Common Questions 9. Are employers required to pay the $4.50 for overtime hours?

Common Questions 10. How about students or interns who work 8 hours per week?

Common Questions 11. Are the number of holidays for part-time employees pro-rated?

Common Questions 12. If an employee works for multiple airport employers, can the employee take the health benefits from employer A and opt for the wages from employer B even if employer B offers health benefits?

Common Questions 13. If an employee and their spouse/domestic partner both work for a company that is subject to the LWO, can one opt out of the health benefits coverage and take the full cash wage?

14. Regardless of wage, if an employees wages are already at $14.80 or more is employer required to contribute $4.50 towards benefit?

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