LIVING WAGE ORDINANCE FACT SHEET

On July 24, 2001, the Santa Monica City Council adopted an ordinance to establish a "living wage" of $10.50/hour applicable to certain employers in a defined geographical area of the city. This came after almost two years of community activity for and against such a measure, including a ballot initiative defeated in November 2000 that would have preempted Council action on the matter. Following is information on key provisions of the new ordinance. For additional information, please call the City Manager's Office at (310) 458-8301 or consult the ordinance itself and the several reports posted on the city website (see index page for links).

Q:    When will the Living Wage take effect?*

A:    While the ordinance will become effective August 24, 2001 (30 days after adoption), as is standard practice, employers will not be required to pay the new minimum compensation until July 1, 2002.  The ten-month period will allow time for administrative regulations to be developed and for affected businesses to make a hardship claim (see below) or carry out necessary financial planning.  

*SPECIAL NOTE: The referendum to adopt the Living Wage Ordinance was defeated in the election of November 5, 2002.

Q:    Which employees will be eligible for the Living Wage?

A:       Employees of certain businesses in the Santa Monica Coastal Zone and extended Downtown core, employees of contractors to such businesses, city employees, and employees of service contractors doing business with the city.  

Q:    What is the "Coastal Zone" and extended Downtown core?

A:    The Coastal Zone is an approximately 1.5 square mile area bounded on the west by the Pacific Ocean and on the east by the Lincoln Boulevard centerline south of Pico Boulevard to the southern city border, the east side of 4th Street from Pico to Colorado and the 4th Street centerline from Colorado to San Vicente Boulevard. Here, the boundary goes inland along the San Vicente Boulevard centerline for approximately 2400 feet and then extends north to the city border at Adelaide. 

The extended Downtown core is the area bounded by Ocean Avenue, Wilshire Boulevard, Fifth Street, and Colorado Avenue.  Properties on both sides of the boundary streets are included. Click here to see a map of the applicable areas for the ordinance.

Q:    Which businesses are included?

A:      Businesses in the geographic areas described above with annual gross receipts of $5 million at locations in the zone and contractors performing part of the activities of such businesses, except for those receiving exemptions for severe economic hardship (see below); and the City of Santa Monica and its service contractors.

Q:    What is the minimum compensation for employees under the Living Wage Ordinance?

A:    The initial hourly rate will be $10.50, or more if health benefits are not provided (see below).

Q:    What about health benefits?

A:    The ordinance also covers health benefits.  If an employer provides health benefits already, the $10.50 per hour wage is the maximum to be paid.  If health benefits are not provided, the employer must add $1.75 per hour to the wage in the first year, and $2.50 per hour in the second year, in lieu of health benefits.  Thus, the total hourly wage in year one would be $12.25 and $13.00 in year two.

Q:    Will the gross revenue threshold or the minimum compensation rate ever change?

A:    Both the gross revenue threshold and the wage rate can increase annually, based on the previous calendar year's L.A. County Consumer Price Index for Urban Wage Earners and Clerical Workers in Los Angeles County (published by the U.S. Department of Labor).

Q:    What businesses will qualify for hardship exemptions?

A:    The ordinance provides for exemptions in cases of severe economic impacts. The exemption would apply when: a) compliance with the requirements would render the employer's business nonviable; (b) the viability of a business depends on young people and other first-time workers who are employed on a seasonal basis; and (c) granting a waiver would otherwise advance the underlying policy of this ordinance.

Q:    How will administrative rules and regulations be developed?

A:    A task force, composition yet to be determined, will work with the City Manager to develop rules and regulations related to this ordinance. Once regulations are developed, the City Manager will have administrative responsibility for implementing the provisions of the law.

Q:    Are there protections for employees who exercise their rights under the ordinance?

A:    Yes. Specific protections and remedies have been written into the law.

 

August 8, 2001

This page was last updated on 10/25/06.