Board Amends Living Wage Ordinance

Affecting Proposition A and Cafeteria Services Contracts

On December 8, 2015, the Board of Supervisors adopted amendments to the
County Living Wage Ordinance ("LWO"). The amendments establish a single
living wage rate effective March 1, 2016, with annual increases thereafter,
eliminated the small business and non-profit business exemptions, and
expanded the program to include part-time employees. (See attached
ordinance.) The attached LWO Implementation Plan, which provides guidance to
County departments, was also adopted.
In light of the amendments, we must be prepared to respond to calls from our
client departments on how to proceed with current solicitations and amendments
to Prop A and cafeteria services contracts. Some of the questions we anticipate
receiving are: (1) Can we amend or scrap the current solicitation? (2) We
already sent our notice of contract award; do we have to renegotiate a price? (3)
Do we have to amend our current contract? and (4) What happens if the new
rates result in our contract not being cost effective?
To assist in responding to these questions, the following snapshot of the changes
and their application to various situations, as set forth in more detail in the
attached Implementation Plan, follows:

Two tiered rate becomes a single wage rate effective March 1, 2016 (County Code
2.201.040);

Rate will increase annually until January 1, 2020; when the annual rate will be
calculated based on CPI and announced by CEO (Id.);

Nonprofits and small business contractors are no longer exempt (Ordinance Section
3);

Existing contracts that are not renewed or amended are not required to comply with
the new LWO requirements (Implementation Plan, p. 5);

Existing contracts that are amended to change scope of work, term or compensation
must also be amended to comply with the new LWO (Implementation Plan, p. 5);

Existing contracts that are set to expire may be extended if pending solicitations
need additional time to implement the new LWO requirements (Implementation Plan,
p. 5);

Pending solicitations where proposals have not been received can be amended to
include LWO requirements (Implementation Plan, p. 4);

With respect to pending solicitations where selection or nonelection notifications to

proposers have not been released, departments can negotiate a revised cost with

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the highest rated proposer; provided however, that the resulting contract must still be
cost effective (Implementation Plan, p. 4); and

If any amendment or new contract does not demonstrate cost-effectiveness,

departments must notify the Board with an implementation plan to transition the
services to County employees (Implementation Plan, p. 5).

For further assistance and guidance, please contact the Contracts Division.

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