This month, City Council is set to look at proposed changes to the city’s living wage ordinance, after the plight of two workers brought to light possible loopholes in the law.
The living wage ordinance applies to city contractors, guaranteeing employees a wage of either $15.99 per hour or a lower wage of $13.71 per hour plus a medical benefit that makes up the difference. But if an employer offers a medical benefit and the employee turns it down, the employer can simply pay the lower wage.
Councilmember Jesse Arreguin wants to change this policy so that an employee can opt out of the medical benefit option and still be entitled to the higher $15.99 wage. According to Arreguin, the law’s current version could provide incentive for companies to offer undesirable health coverage. In that case, employees would be more likely to opt out, allowing their employer to pay the lower wage.
City employees already have the right to get cash in lieu of an employer-provided medical benefit, if they have proof they are already paying for their own insurance, Arreguin said.
“We shouldn’t have this loophole,” he said. “We need to have some consistency between how we treat our city employees and how we treat our contract employees.”
Arreguin’s suggested changes also aim to strengthen the ordinance’s complaint process, the protection against retaliation and the requirements on how companies notify employees of what the living wage is. Once strengthened, Arreguin said, enforcement of the ordinance will be more consistent with the new minimum wage law set to go into effect next month.
Arreguin put forth these alterations as an item on the council’s Sept. 16 agenda to be referred to the city’s Commission on Labor. They address issues faced by Julio Castro, a former employee of LAZ Parking, which contracts with the city and runs three parking garages in Berkeley. Castro said he waived the health benefit provided by LAZ Parking because he found cheaper insurance elsewhere and thought he should get a higher wage because he was paying for his own insurance.
In 2013, the Division of Labor Standards Enforcement awarded Castro with more than $3,000 for unpaid wages, as well as other labor violations allegedly committed by his employer. The city, though, concluded that because Castro waived the medical benefit, he was not entitled to a higher wage.
Castro agreed that the “loophole” pointed out by Arreguin should be fixed. He also said the city, in general, needs to exercise more oversight on how contractors treat their employees.
“Had the city taken a more hands-on approach from the beginning, I wouldn’t have lived this nightmare,” Castro said.
Former LAZ Parking employee Chauncy Taylor complained to the city of problems similar to those that Castro faced. She did not have the time, however, to pursue the matter further and did not receive back pay from the company.
“At this point, I have to go forward with my life,” Taylor said. “My life doesn’t consist of putting that much energy into keeping up with the council of Berkeley and their thoughts and opinions … if it doesn’t have anything to do with giving me back what they (LAZ Parking) owe me.”
Arreguin hopes his suggested changes will return to City Council for approval before next summer.