HR Management & Compliance

Living Wage: San Jose Adopts Steepest Living Wage Policy As Trend Picks Up Steam Across California

San Jose’s City Council recently approved the highest living wage in the nation, guaranteeing certain workers far more than required by state or federal minimum wage laws. But San Jose’s new policy isn’t the first in California-and it looks like it won’t be the last.


The HR Management & Compliance Report: How To Comply with California Wage & Hour Law, explains everything you need to know to stay in compliance with the state’s complex and ever-changing rules, laws, and regulations in this area. Coverage on bonuses, meal and rest breaks, overtime, alternative workweeks, final paychecks, and more.


New San Jose Living Wage Rule

Contractors with the City of San Jose will now have to pay employees at least $9.50/hour if the employer provides health benefits or $10.75/hour without benefits. The requirement is effective immediately and applies to employers with contracts totaling more than $20,000 to provide any of a broad range of services, including auto repair and maintenance, food, janitorial, landscaping, office/clerical and property maintenance. Contracts issued by the city’s Redevelopment Agency are exempt and the new policy doesn’t cover low-wage workers at the San Jose airport.

Although there are no specific penalties for violations, Ed Moran with the San Jose City Attorney’s office told CEA that employers who breach the new law risk losing their city contracts.Los Angeles, Oakland, Pasadena and West Hollywood OrdinancesSan Jose is the fifth California city to adopt a living wage rule. A few years ago, Los Angeles adopted an ordinance mandating that municipal contractors pay $7.39/hour plus benefits or $8.64/hour without benefits.Last July, Oakland decreed that employers with city service contracts totaling over $25,000 must pay at least $8 or $9.25/hour, depending on whether the worker is entitled to benefits. Violators can be fined up to $500 per week. Pasadena and West Hollywood have also adopted living wage requirements.

Who’s Next?

Business groups have attached these measures, arguing that city leaders are usurping the role of labor unions in negotiating wages and benefits. But Steve Tedesco with the San Jose Silicon Valley Chamber of Commerce told CEA that living wage ordinances are a growing trend across the country. And their backers-which include unions-already have their sights set on a number of other California cities and counties.In San Francisco, the Board of Supervisors recently appointed a task force to study the impact of a potential living wage ordinance. Barry Hermanson with A Living Wage Coalition in San Francisco told CEA that an ordinance could be in place there as early as this summer.The Marin County Board of Supervisors recently voted to review a living wage measure that calls for county service contractors to pay $15.75/hour to employees without benefits and $14.50/hour with benefits. A loosely knit coalition called the Peninsula Living Wage Campaign is actively backing living wage proposals in Palo Alto and Mountain View.And in Southern California, both Santa Monica and the county of Los Angeles have begun looking into living wage rules. We’ll keep you posted.