Leading Practices

Leading Practices

• The president issued an Executive Order on Increasing the Minimum Wage for Federal Contractors in 2021 that increased the required wage for contractors to $15 per hour and addressed implications for tipped workers.

• Maryland implemented a living wage requirement for state service contracts and rolled out a detailed Frequently Asked Questions Guide that provides detailed guidance on how jurisdictions should incorporate living wage in their procurement processes to support their subrecipients, contractors and vendors. The policy states that, effective 12:01 a.m. on September 28, 2022, living wage rates will be adjusted to $15.13 per hour in tier 1 areas (Anne Arundel County, Baltimore City, Baltimore, Howard, Montgomery and Prince George’s Counties) and $11.36 in tier 2 areas (any county in the state not included in the tier 1 areas), depending on the location where the services are being performed or on the location benefiting from the work.

• The Board of County Commissioners in Miami-Dade County established a Living Wage Ordinance for employees paid through county service contracts to allow citizens to support themselves and their families above the poverty line and with dignity. The living wage applies to contracts valued at greater than $100,000 and all service contractors at Miami-Dade Aviation Department facilities regardless of contract value for various covered services as defined in the provisions of Miami-Dade County's Living Wage Ordinances. Effective October 1, 2022, the living wage is $15.03 per hour with qualifying health benefits valued at least $3.70 per hour or $18.73 per hour.

• The Santa Clara County procurement department established a living wage ordinance for all county purchasing. Requirements specifically outline the rate of wages with or without health benefit and retirement benefit credits. The county’s living wage rates are updated annually based on specified cost of living adjustments. For FY2022/FY2023, the living wage is $22.96 with both benefits and retirement, $24.96 with either health or retirement and $26.96 without health or benefits.

• King County issued an ordinance and a Frequently Asked Questions Guide that outlines wage requirements and addresses repercussions for noncompliance. Contractors (and their subcontractors) awarded a contract valued $100,000 or more must pay a living wage to their employees. Wages are based on the company’s total number of employees. Companies that fail to pay living wages may be subject to (1) disqualification from bidding on a King County contract and (2) damages and termination of a contract. Living wage for a single individual in 2022 is $21.42 per hour.

• Vendors paid more than $25,000 per year by the city of Berkeley must comply with the Living Wage Ordinance. To comply, vendors must pay a living wage (set by the city), provide health benefits or cash in lieu and provide paid time off. Learn more about this and other vendor requirements, or read the full ordinance. Vendors must have a Berkley city business license. Effective July 1, 2022, vendors must pay employees $17.41 per hour plus a medical benefit equivalent to at least $2.89 per hour. If the employer does not provide the employee at least $2.89 per hour toward an employee medical benefits plan, the employer shall pay an hourly wage of not less than $20.30. Vendors must provide employees with at least 22 days off per year for sick leave, vacation or personal necessity; 12 of these days off must be compensated at the same wage as for a normal working day.

• Los Angeles issued a living wage ordinance (LWO) along with rules and procedures for implementation of the ordinance. The ordinance defines requirements for sick leave, vacation and personal responsibility and establishes a minimum wage threshold. The LWO applies to contractors receiving city funds and ensures that employees working on city contracts are paid the city’s living wage (which consists of a cash wage rate and an employer’s health benefits contribution) and are provided with time off as required by the LWO (at least 96 compensated hours off and 80 uncompensated hours off). As of July 1, 2020, the city's minimum wage for employers with 26 or more employees increases to $15.00/hour for qualified employees in the city of Los Angeles.

• The Living Wage Ordinance, which includes the Business Subsidy Act, requires covered projects to create at least one full-time living wage job for each $25,000 of business subsidy. State law contains many exemptions. The city places its own requirements on subsidies valued at $100,000 or more and with the intention, or end result, of creating or keeping jobs. Living wage rates effective January 1, 2022, to December 31, 2022, are 130% of poverty for a family of four without health coverage provided by the employer and 110% of poverty for a family of four with health coverage provided by the employer.

• New York City launched the Fair Wages for New Yorkers Act, a living wage law that includes wages and health benefits for workers. The law requires certain employers that receive at least $1 million of financial assistance from the city or a city economic development entity to pay no less than the living wage to their employees at the project site, unless the employer qualifies for certain exemptions. As of April 1, 2022, the living wage rate of $15.00 and health benefit supplement of $2.05 applies.

• Firmenich, the world’s largest privately owned fragrance and taste company, achieved living wage certification across all of its global operations. Following an external assessment by Fair Wage Network, a widely recognized international nongovernmental organization, the group was awarded the certification. The firm is pairing living wage investments internally with training for 100 major suppliers on human rights to include living wage, women’s empowerment, education and human rights practices.

• Cupcakin' Bake Shop is a Northern-California-based business with multiple locations. The company is committed to maintaining job quality as it grows. The owner offers her workers a living wage, career-building opportunities, wealth-building opportunities and a fair and engaging workplace. Cupcakin’ partnered with Pacific Community Ventures and their Good Jobs, Good Business program to implement job quality practices, including tracking and measuring changes over time, as well as to receive access to capital to scale operations efficiently and prepare the business for the future while supporting quality jobs.