Council sets 'living wage' City contract workers will also make at least $10 an hour.

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By SONYA SMITH
OC Register, May 22 2007
Contact: SONYA SMITH, OC Register
949-553-2911 , 
Workers contracting with the city will make a "living wage" of at least $10 an hour plus benefits, matching the minimum city employees earn, the City Council ordered Tuesday.

The new law will go into effect instantly for new contracts and will be phased over the next four years for existing contracts. A second council approval is required to establish the law, which mandates that all employees hired by the city – or hired by the city through a contractor – be paid at least $10 an hour plus benefits.

"This is about the people who keep our city clean and beautiful," Councilman Larry Agran said. "This gives people who work here … the opportunity to live here and enjoy the benefits of Irvine."

Irvine is the only city in the county with a "living wage" – a law intended to raise worker's annual salaries above the national poverty line.

The Associated Press contributed to this report.

The ordinance was approved with a 3-2 vote. Council members Christina Shea and Steven Choi dissented.

Choi opposed the law saying he does not want Irvine taxpayers to pay for higher salaries and benefits for people who may not live in Irvine. Shea opposed the law because the cost implications are not yet known and because she wants a more comprehensive law.

"This is a good start, but perhaps not the best start," she said.

The living wage will be applied to contracts as they're renewed; all new contracts will be instantly covered by the law. The wage law will cover up to 13 contracts for services such as landscaping, maintenance and security.

The total cost to the city is unknown, but $300,000 will be set aside in the 2007-08 budget to accommodate contract cost increases caused by the living wage.

The ordinance approved Tuesday:

Sets a minimum wage for employees working for contractors hired by the city. Volunteers for contractors are excluded.

Sets a minimum hourly pay rate of $10 per hour (excluding benefits) with an increase of 4 percent on July 1. This is the same rate for the existing Irvine living wage that covers city employees.

Includes a minimum for benefits coverage of $2.02 per hour (raising the salary and benefits minimum to $12.02).

Covers contracts awarded by the city that are more than $100,000 over at least one year.

Sets how violations will be treated – violating contractors could be required to pay compensation to employees; the city could suspend or cancel the contract; and the contractor could be banned from future city contracts.

Of California's 478 incorporated cities, 20 have passed some form of a living wage ordinance, according to the ACORN Living Wage Resource Center, an agency advocating the practice.

Jill Jenkins, chief economist for the Employment Policies Institute, said that a living wage could mean Irvine contract prices would rise because of less competition and higher labor costs. That could mean a Great Park price higher than the $1.1 billion estimate, lost city services and higher taxes because of increased government costs, she said.

Contact the writer: 949-553-2911 or sosmith [at] ocregister [dot] com