2019-138 Contract Options for Living WageDate: July 5, 2019 Report No. 2019-138
INFORMAL STAFF REPORT TO MAYOR AND CITY COUNCIL SUBJECT: Research related to requiring City contractors to pay their employees a living wage. EXECUTIVE SUMMARY: Texas law allows for cities to adopt requirements for city contractors to pay a living wage and there are a number of cities in Texas that have passed resolutions. BACKGROUND:
Requests were made on June 3, 2019 during the Council work session on living wage to provide additional options for incentivizing current contractors to pay a living wage and to provide options to revise evaluation criteria to require bidders provide a list of employees’ salaries as part of their bid submissions.
DISCUSSION:
The City currently does not compel city contractors to pay a certain wage above the federal minimum wage for non-construction contracts. However, below are a few options which may allow the City to determine whether contractors are paying a living wage and require or incentivize city contractors to pay a living wage.
Auditing Under Current Contract The City may be able to request current contractors provide payroll information if the City were to perform an audit under any existing contract provisions allowing an audit1. Records received by the City in the course of a contract audit could be subject to the Texas Public Information Act
and potentially be made public in response to an open records request.
Requiring Wage Information for Renewal of Contract Another option is for the City to request payroll information from the contractor before renewing current contracts. In some instances the City may be able to choose not to renew a contract if
adequate payroll information is not provided by the contractor.2 This practice would require additional staff time to administer and City operations could be negatively impacted if planned contract renewals were not executed. It is not recommended the City acquire detailed payroll records for individual employees of city contractors.
1 Prior to moving forward, this option would require a review of specific contract provisions to determine if the City has a right to perform an audit and whether payroll records are encompassed within the audit provisions of the contract.
2 This option may be limited in situations where current contracts contain specific language about how and when a renewal occurs. A review of contracts coming up for renewal would have to be performed to determine if requiring payroll information prior to renewal is an option. Future contracts could be drafted to contain language requiring payroll information prior to renewal.
Date: July 5, 2019 Report No. 2019-138
Requiring Wage Information in Procurement The City can require vendors provide payroll information as part of bid submissions. For example, vendors for non-construction services could be required to identify what positions are required to
perform the contracted services and provide a salary range for each identified position as part of their submission. It is not recommended bidders provide detailed payroll records for individual employees.
Adding Living Wage to Evaluation Criteria for Procurement
The City Council can adopt evaluation criteria for competitive proposals that considers, among other important factors, a vendor’s approach to employee pay rates and other related considerations. This could be done for specific categories of contracts, such as general services. The City of Dallas adopted evaluation criteria for general services as listed in Table 1. The
‘Planned Approach’ category has several subsections including rate of hourly pay for employees
directly working on city contracts. City of Dallas requires bidders sign an affidavit affirming they comply with the City’s living wage policy, if bidders do not sign the affidavit their proposals are deemed non-responsive. A non-responsive proposal is not evaluated or recommended for contract award.
Evaluation Criteria Points
Cost 35
Planned Approach 35
Experience and Capabilities 15
Business Inclusion and Development 15
Total 100
Table 1. City of Dallas Evaluation Criteria for General Services
Dallas requires an annual report be provided by the contractor showing they have complied with the city’s requirement and the city can audit contractors as well.
STAFF CONTACT: Cassey Ogden Director of Compliance (940)349-7195
Cassandra.Ogden@cityofdenton.com
REQUESTOR: Council Member Briggs, Council Member Davis
PARTICIPATING DEPARTMENTS: Purchasing and Procurement
STAFF TIME TO COMPLETE REPORT: 8 hours