LTC 103-2003 CITY of MIAMI BEACH
Office of the City Manager
Letter to Commission No./Z23- Zo p_3
TO:
FROM:
SUBJECT:
Mayor David Dermer and
Members of the City Commission
Jorge M. Gonzalezt'~ r~,~x/'-~
City Manager (,)~ O
LIVING WAGE LEGISLATION
Date: May 1,2003
The purpose of the LTC is to update the Mayor and City Commission on
legislation in Tallahassee related to living wage ordinances enacted by
municipalities.
On April 29, 2003, the Florida Senate approved Senate Bill 54, which prohibits
local governments from requiring employers to pay a minimum wage other than
the federal minimum wage. The bill provides exemptions that allow local
governments to require a living wage in the following instances:
· For employees of the political subdivision;
· For employees of an employer (or employees of a subcontractor of the
employer) contracting to provide goods or services for the political
subdivision under the terms of a contract with the political subdivision; or
· For employees of an employer receiving a direct tax abatement or subsidy
from the political subdivision, as a condition of the abatement or subsidy.
On May 1, 2003, the Senate bill was approved by the Florida House of
Representatives on second reading, and the bill is expected to be passed on the
final day of the legislative session, Friday May 2, 2003.
The City and its representatives have worked diligently during the 2002 and 2003
legislative sessions to ensure that the exemptions listed above remained intact.
The legislative team will remain vigilant through Sine Die of the 2003 Legislature
to ensure that the exemptions remain.
The bill text and staff analysis is attached for your review. Please contact me if
you have any questions or comments.
C:
Murray Dubbin, City Attorney
Christina Cuervo, Assistant City Manager
Mayra Diaz-Buttacavoli, Assistant City Manager
Bob Middaugh, Assistant City Manager
Kevin Crowder, Economic Development Division Director
Attachments (2)
JMG/~/KC
F:\DDHP\$ALL\KEVlN\Correspondence\LTCs\living wage legislation. DOC
Florida Senate - 2003 CS for SB 54
By the Committee on Comprehensive Planning; and Senators
Constantine, Fasano, Cowin, Wise and Lynn
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316-2219-03
A bill to be entitled
An act relating to local government; providing
definitions; prohibiting local governments from
requiring employers to pay a minimum wage other
than a federal minimum wage; providing
exceptions; providing an effective date.
WHEREAS, promoting the economic growth and prosperity
of its citizens is among the most important responsibilities
of the state, and
WHEREAS, this economic growth and prosperity depends
upon maintaining a stable business climate that will attract
new employers to the state and allow existing employers to
grow, and
WHEREAS, with regard to worker wages, federal minimum
wage provisions strike the necessary balance between the
interests of workers and their employers, and
WHEREAS, allowing each local government to establish
minimum wage levels in their individual jurisdictions higher
than those required by federal law would threaten to drive
businesses out of these communities and out of the state in
search of a more favorable and uniform business environment,
and
WHEREAS, higher minimum wage standards differing from
one locale to another would encourage residents to conduct
their business in jurisdictions where wage costs, and hence
prices, are lower, and
WHEREAS, such artificial constraints would disrupt
Florida's economy and threaten the public welfare, NOW,
THEREFORE,
CODING:Words s~ are deletions; words underlined are additions.
Florida Senate - 2003
316-2219-03
CS for SB 54
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Be It Enacted by the Legislature of the State of Florida:
Section 1. (1) As used in this section, the term:
(a) "Employee" means any natural person who is
entitled under federal law to receive a federal minimum waqe.
(b) "Employer" means any person who is required under
federal law to pay a federal minimum wage to the person's
employees.
(c) "Employer contractinq to provide goods or services
for the political subdivision" means a person contractinq with
the political subdivision to provide goods or services to, for
the benefit of, or on behalf of, the political subdivision in
exchange for valuable consideration, and includes a person
leasing or subleasing real property owned by the political
subdivision.
(d) "Federal minimum waqe" means a minimum waqe
required under federal law, including the federal Fair Labor
Standards Act of 1938, as amended, 29 U.S.C. ss. 201 et seq.
(e) "Political subdivision" means a county,
municipality, department, commission, district, board, or
other public body, whether corporate or otherwise, created by
or under state law.
(f) "Wage" means that compensation for employment to
which any federal minimum wage applies.
(2) Except as otherwise provided in subsection (3), a
political subdivision may not establish, mandate, or otherwise
require an employer to pay a minimum wage, other than a
federal minimum waqe, or to apply a federal minimum wage to
wages exempt from a federal minimum waqe.
CODING:Words ~-tr~zck~n are deletions; words underlined are additions.
Florida Senate - 2003
316-2219-03
CS for SB 54
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(3) This section does not limit the authority of a
political subdivision to establish a minimum wage other than a
federal minimum wage:
(a) For the employees of the political subdivision;
(b) For the employees of an employer contracting to
provide goods or services for the political subdivision, or
for the employees of a subcontractor of such an employer,
under the terms of a contract with the political subdivision;
or
(c) For the employees of an employer receiving a
direct tax abatement or subsidy from the political
subdivision, as a condition of the direct tax abatement or
subsidy.
(4) If it is determined by the officer or agency
responsible for distributing federal funds to a political
subdivision that compliance with this act would prevent
receipt of those federal funds, or would otherwise be
inconsistent with federal requirements pertaining to such
funds, then this act shall not apply, but only to the extent
necessary to allow receipt of the federal funds or to
eliminate the inconsistency with such federal requirements.
Section 2. This act shall not prohibit a federally
authorized and recognized tribal government from establishing
a minimum wage in excess of the federal minimum wage for
natural persons employed within any territory over which the
tribe has jurisdiction.
Section 3. This act shall take effect upon becoming a
law.
CODING:Words ~ are deletions; words underlined are additions.
Florida Senate - 2003
316-2219-03
CS for SB 54
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STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
COMMITTEE SUBSTITUTE FOR
Senate Bill 54
This CS differs from the bill as filed in the following ways:
* It adds a definition for employee, employer,"e~ployer
contracting to provide goods or services for the
political subdivision," and wage;
* Provides that the act will not apDly if it is determined
that comDliance with this act would prevent receipt of
federal ~unds to a political subdivision; and
* Provides that this act does not prohibit a federally
authorized and recognized tribal government from
establishing a minimum wage in excess of the federal
minimum wage for natural persons employed within any
territory over which the ~ribe has 3urlsdiction.
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CODING:Words s~ are deletions; words underlined are additions.
SENATE STAFF ANALYSIS AND ECONOMIC IMPACT STATEMENT
(This document is based on the provisions contained in the legislation as of the latest date listed below.)
BILL:
SPONSOR:
SUBJECT:
DATE:
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6.
CS/SB 54
Comprehensive Planning Committee, Senator Constantine and others
Local Government
April 7, 2003
REVISED:
ANALYST STAFF DIRECTOR
Cooper Yeatman
REFERENCE ACTION
CP Fav/CS
Summary:
This committee substitute prohibits the political subdivisions of the state from requiring
employers to pay a minimum wage other than a federal minimum wage, or from requiring
employers to apply a federal minimum wage to wages that are exempt under federal law.
However, the committee substitute allows political subdivisions to establish a minimum wage for
their employees, for employees of contractors and subcontractors under contract with the
political subdivision, and for employees of employers receiving direct tax abatements or
subsidies from the political subdivision.
This committee substitute creates an unnumbered section of the Florida Statutes.
II. Present Situation:
Federal and State Minimum Wage Laws
In 1938, the United States Congress enacted the federal Fair Labor Standards Act (29 U.S.C.
ss. 201, et seq.). The federal act established an initial federal minimum wage of $0.25 per hour.
During the 64-year history of the federal minimum wage, Congress has amended the minimum
wage rate 25 times. In 1996, Congress increased the minimum wage from $4.25 per hour to
$4.75 per hour, beginning October 1, 1996, and from $4.75 per hour to $5.15 per hour, beginning
September 1, 1997. The federal minimum wage for all covered, nonexempt employees has
remained at $5.15 per hour since 1997. The federal act includes several exemptions from the
federal minimum wage, including:1
~ Section 13 of the Fair Labor Standards Act of 1938, as amended, 29 U.S.C.s. 213; Wage and Hour Division, U.S.
Department of Labor, Handy Reference Guide, at http://www.dol.gov/esa/regs/compliance/whd/hrg.htm#1.
BILL: CS/SB 54 Page 2
· Executive, administrative, and professional employees (including teachers and academic
administrative personnel in elementary and secondary schools), outside sales employees,
and employees in certain computer-related occupations;
· Employees in certain seasonal amusement or recreational establishments, employees in
certain small newspapers, seamen employed on foreign vessels, employees engaged in
fishing operations, and employees engaged in newspaper delivery;
· Farm workers employed by anyone who used no more than 500 "man-days" of farm
labor in any calendar quarter of the preceding calendar year; and
· Causal babysitters and persons employed as companions for the elderly or infirm.
Employers must also pay tipped employees (e.g., servers in restaurants) who customarily and
regularly receive more than $30 per month in tips the federal minimum wage of $5.15 per hour.
The employer, however, may account for tips received by a tipped employee as part of the wage
rate, but must also pay the employee a base wage of at least $2.13 per hour.2
The Wage and Hour Division of the United States Department of Labor enforces the federal Fair
Labor Standards Act, including the federal minimum wage.
According to the United States Department of Labor, Florida is one of seven states with no state
minimum wage law.3 These other states are Alabama, Arizona, Louisiana, Mississippi, South
Carolina, and Tennessee. Eleven states and the District of Columbia have minimum wage rates
higher than the federal rate: Alaska, California, Connecticut, Delaware, Hawaii, Maine,
Massachusetts, Oregon, Rhode Island, Vermont, and Washington. Three states (Kansas, New
Mexico, and Ohio) have minimum wage rates lower than the federal minimum wage. If an
employee is subject to both a state and federal minimum wage law, the employee is entitled to
the higher of the two minimum wages.
National Living Wage Campaign
The "living wage" campaign is a national effort seeking local governments to require that
employers pay minimum wages in excess of the federal minimum wage. According to the
Economic Policy Institute, a living wage is usually the wage a full-time worker would need in
order to produce a family income ranging from 100 percent to 130 percent of the federal poverty
levelfi The institute cites that the wage rates specified in living wage ordinances typically range
between $6.25 and $12.00 per hour. By contrast, the Employment Policies Institute cites that
living wage proponents seek wage rates between $13.62 and $19.27 per hour.5 One of the living
wage proponents, the New Party, advocates wage rates between $6.50 and $7.50 per hour,
together with health care benefits.6 The Association of Community Organizations for Reform
Now (ACORN) reports that at least 103 local governments nationwide have adopted a living
2 Section 3(m) and (t) of the Fair Labor Standards Act of 1938, as amended, 29 U.S.C.s. 203(m) and (t); Wage and Hour
Division, supra, at n. 1.
3 U.S. Department of Labor, Minimum Wage Laws in the States, at http://www.dol.gov/esa/minwage/america.htm
4 Economic Policy Institute, Living Wage: Facts at a Glance, at
http://www.epinet .org/I ssueguides/livingwage/livingwagefacts .html.
5 Employment Policies Institute, What is the Living Wage?, at http://www.epionline.org/livingwage/lw_what.cfm.
6 New Party, The Living Wage Campaign, at http://www.newparty.org/livwag/livwag.html.
BILL: CS/SB 54 Page 3
wage ordinance, requiring employers that receive government contracts or public subsidies to
pay a minimum wage higher than the federal minimum wage.7
Local Living Wage Ordinances in Florida
In Florida, the City of Miami Beach, and Miami-Dade, Broward, and Palm Beach Counties have
enacted ordinances addressing "living wages."
In May 1999, the Board of County Commissioners of Miami-Dade County enacted the county's
"living wage" ordinance, which requires the county government and certain of its service
contractors and subcontractors to pay employees a living wage of no less than $8.56 per hour if
employer-paid health care benefits are provided, or $9.81 per hour without health care benefits
(s. 2-8.9, Code of Metropolitan Dade County, Florida). The ordinance covers the following
categories of county service contracts valued at more than $100,000 per year:
· Food preparation and/or distribution;
· Security services;
· Routine maintenance services such as custodial, cleaning, refuse removal, repair,
refinishing, and recycling;
· Clerical or other non-supervisory office work, whether temporary or permanent;
· Transportation and parking services including airport and seaport services;
· Printing and reproduction services; and
· Landscaping, lawn, and/or agricultural services.
In April 2001, the City of Miami Beach enacted a living wage ordinance similar to Miami-Dade
County's ordinance. The city's ordinance requires the city and certain of the city's service
contractors with contracts valued at more than $100,000 per year, and their subcontractors, to
pay employees a living wage of no less than $8.56 an hour if employer-paid health care benefits
are provided, or no less than $9.81 without health care benefits, indexed annually (ss. 2-407-
2-409, Code of the City of Miami Beach, Florida). The city's ordinance applies to similar
categories of service contracts as the county's ordinance, but also included park and public place
maintenance.
In October, 2002, Broward County enacted a living wage ordinance that requires pay of $9.47
per hour for nearly 400 county employees starting in October 2003. It also will apply to
employees of service-oriented companies that do more than $100,000 annually in business with
the county ($10.82 without health benefits).8
In February, 2003, Palm Beach County enacted a living wage ordinance that requires pay of
$9.47 an hour plus health benefits for some county govemment workers and county-hired
construction contractors.9
At least seven other living wage campaigns have been identified in Florida: Alachua Cotmty,
Gainesville, Tampa, Orlando, Jacksonville, South Miami, and Coral Gables.~°
Asso. of Community Organizations for Reform Now, Victories, at http://www.acom.org/acom 10/livingwage/victories.htm.
Miami Herald, October 10, 2002.
Ft. Lauderdale Sun Sentinel, Feb. 26, 2003.
BILL: CS/SB 54 Page 4
Power of Local Governments to Enact Minimum Wage Ordinances
The federal Fair Labor Standards Act does not preempt state laws or municipal ordinances from
establishing a higher minimum wage. See s. 18(a) of the federal Fair Labor Standards Act of
1938, as amended, 29 U.S.C.s. 218:
No provision of [the Fair Labor Standards Act] or of any order thereunder shall excuse
noncompliance with any Federal or State law or municipal ordinance establishing a
minimum wage higher than the minimum wage established under [the federal act].
In Florida, the State Constitution permits counties to enact ordinances that are not inconsistent
with state law. TM The State Constitution also grants municipalities the power to enact ordinances
on any subject that state law may address, exceptl2:
· The subjects of annexation, merger, and exercise of extraterritorial power;
· Any subject expressly prohibited by the State Constitution;
· Any subject expressly preempted to state or county government by the State Constitution
or by law; or
· Any subject preempted to a county under a county charter (s. 166.021(3), F.S.).
If a conflict exits between a county ordinance and an ordinance of a municipality located within
the county, in charter counties, the county charter would specify whether the county ordinance or
the municipal ordinance prevails.~3 In non-charter counties, the county ordinance does not, ~apply
in those municipalities with municipal ordinances that conflict with the county ordinance.'~
Florida has no state minimum wage. There is no current law that preempts local ordinances or
that prohibits a local government in this state from establishing a minimum wage that exceeds
the federal minimum wage.
III. Effect of Proposed Changes:
Section 1 prohibits the political subdivisions of the state from requiring employers to pay a
minimum rate of compensation for employment - a "minimum wage" - other than a federal
minimum wage required under federal law, including the federal Fair Labor Standards Act of
1938, as amended (29 U.S.C. ss. 201, et seq.). This section also prohibits a political subdivision
from requiring employers to apply a federal minimum wage to wages that are exempt from the
minimum wage under federal law. These provisions apply to each "political subdivision," which
is defined as a county, municipality, department, commission, district, board, or other public
body, whether corporate or otherwise, created by or under state law.
l0 Living Wage Resource Center, Association of Community Organizations for Reform Now, Living Wage Campaigns
Underway, at http://www.livingwagecampaign.org/pages/currentcampaigns.htm (last modified July 2002).
n Section l(f) and (g), Art. VIII of the State Constitution; see also s. 125.01, F.S.
~2 Section 2(b), Art. VIII of the State Constitution.
~3 Section l(g), Art. VIII of the State Constitution.
~4 Section l(f), Art. VIII of the State Constitution.
BILL: CS/SB 54 Page 5
However, these provisions do not limit the authority of a political subdivision to establish a
minimum wage other than a federal minimum wage:
· For employees of the political subdivision;
· For employees of an employer (or employees of a subcontractor of the employer)
contracting to provide goods or services for the political subdivision under the terms of a
contract with the political subdivision; or
· For employees of an employer receiving a direct tax abatement or subsidy from the
political subdivision, as a condition of the abatement or subsidy.
In addition, the act will not apply if it is determined that compliance with this act would prevent
receipt of federal funds to a political subdivision.
The following definitions are provided:
· "Employee" means any natural person who is entitled under federal law to receive a
federal minimum wage;
· "Employer" means any person who is required under federal law to pay a federal
minimum wage to the person's employees;
· "Employer contracting to provide goods or services for the political subdivision" means a
person contracting with the political subdivision to provide goods or services to, for the
benefit of, or on behalf of, the political subdivision in exchange for valuable
consideration, and includes a person leasing or sub-leasing real property owned by the
political subdivision;
· "Federal minimum wage" means a minimum wage required under federal law, including
the federal Fair Labor Standards Act of 1938, as amended, 29 U.S.C. ss. 201 et seq;
· "Political subdivision" means a county, municipality, department, commission, district,
board, or other public body, whether corporate or otherwise, created by or under state
law; and
· "Wage" means that compensation for employment to which any federal minimum wage
applies.
Section 2 provides that this act does not prohibit a federally authorized and recognized tribal
government from establishing a minimum wage in excess of the federal minimum wage for
natural persons employed within any territory over which the tribe has jurisdiction.
Section 3 provides that the committee substitute takes effect upon becoming a law.
IV. Constitutional Issues:
A. Municipality/County Mandates Restrictions:
None.
Public Records/Open Meetings Issues:
None.
BILL: CS/SB 54 Page 6
C. Trust Funds Restrictions:
None.
V. Economic Impact and Fiscal Note:
^. Tax/Fee Issues:
None.
B. Private Sector Impact:
The committee substitute prevents an employer from being required to pay a minimum
wage other than a federal minimum wage, or to apply a federal minimum wage to wages
exempt from the minimum wage, except if the employer provides goods or services under
contract with a political subdivision or receives a direct tax abatement or subsidy from a
political subdivision.
C. Government Sector Impact:
None.
VI. Technical Deficiencies:
None.
VII. Related Issues:
None.
VIII. Amendments:
None.
This Senate staff analysis does not reflect the intent or official position of the bill's sponsor or the Florida Senate·