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HomeMy WebLinkAboutItem 11b - Establishing Minimum Wage in Accordance with SB 3 DATE: December 17, 2019 TO: Honorable Mayor and City Council FROM: Hue C. Quach, Administrative Services Director By: Shama P. Curian, Human Resources Administrator SUBJECT: RESOLUTION NO. 7288 APPROVING WAGE ADJUSTMENTS FOR UNREPRESENTED, NON-BENEFITED PART-TIME EMPLOYEES IN ACCORDANCE WITH CALIFORNIA’S MINIMUM WAGE INCREASE EFFECTIVE JANUARY 1, 2020 Recommendation: Adopt SUMMARY On April 4, 2016, Governor Jerry Brown signed Senate Bill 3 (“SB 3”), incrementally increasing California’s minimum wage over a period of six years to reach $15 per hour by January 1, 2022. In order to continue to comply with SB 3, it is recommended that the City Council adopt Resolution No. 7288 approving wage adjustments for unrepresented, non-benefited part-time employees to meet the expected minimum wage increase of $13.00 per hour effective January 1, 2020. The recommended adjustments are projected to increase the City’s Operating Budget by approximately $34,000 for the remainder of Fiscal Year 2019-20. BACKGROUND SB 3 signed by Governor Jerry Brown on April 4, 2016, increasing California’s minimum wage in increments of $1.00 per hour annually to reach $15.00 per hour in January 1, 2022. The minimum wage has been set as follows: Effective Date Minimum Hourly Wage January 1, 2017 $10.50 January 1, 2018 $11.00 January 1, 2019 $12.00 January 1, 2020 $13.00 January 1, 2021 $14.00 January 1, 2022 $15.00 Resolution 7288 Establishing Minimum Wage In Accordance with SB 3 December 17, 2019 Page 2 of 3 In previous years, the City Council has adopted resolutions establishing wage adjustments for part-time (unrepresented) employees to comply with the State’s set minimum wage; however, Charter Cities such as Arcadia may exempt themselves from these standards. The implementation of these new schedules has started to create compaction to related part-time classifications within the same job family as well as pay ranges to some full-time positions. As such, the Human Resources Division conducted a comprehensive analysis to determine a viable solution to address the compaction concerns. DISCUSSION The Human Resources Division surveyed surrounding cities and their comparable part- time positions. Cities who responded, confirmed that they have not yet needed to adjust their full-time positions because of the minimum wage mandate. Similarly, they have only adjusted the pay rates for their part-time positions that were below the minimum wage threshold, although they are facing similar internal compaction issues as the rates increase. A comparative wage study from the nine cities concluded that the City’s part-time positions were equitable amongst surrounding cities for positions with similar duties. All but one of Arcadia’s 11 part-time positions are currently within competitive scales at 80% or above the median pay. One additional position did not have a comparable position in the cities surveyed. After internal review and discussion of possible alternative, the consensus of the City’s Executive Team is to adjust the start of the full salary range to the minimum of $13 per hour, and apply a 2.5% incremental increase between each step instead of the current 5%. This has the effect of meeting the minimum wage requirements but slows the cost increases over time as employees move through the steps. Additionally, the schedule would end at PT22 and the positions of Volunteer Services Coordinator and Reserve Police Officer (Level II) would be removed from the part-time wage schedule. The recommendation is to place these positions at a set hourly rate (their current maximum step) and adjust the compensation when a job audit deems necessary. Removing these positions from the wage schedule would not require that the adjustment be applied to these positions simply as a result of being on the same part-time wage schedule. Both of these positions are housed in the Police Department and the one entry-level position of Police Cadet would not be considered in the same job family or create compaction concerns. These adjustments to the salary table will also simplify the increases that will be necessary in future years as the minimum wage moves to $15.00 per hour. The proposed unrepresented, part-time wage schedules are attached as Exhibit “A” and Exhibit “B” within Resolution No. 7288. Exhibit “A” illustrates part-time positions with Non-CalPERS Retirement, while Exhibit “B” is for part-time positions enrolled in Resolution 7288 Establishing Minimum Wage In Accordance with SB 3 December 17, 2019 Page 3 of 3 CalPERS due to mandatory guidelines based on hours worked or having been vested in CalPERS from prior employment. Exhibit “A” reflects the same wage adjustments made to Exhibit “B”; however, Exhibit “B” includes a 7% increase that is currently in place to offset the employee pension contributions as a result of past labor negotiations and as adopted in Resolution No. 6795. ENVIRONMENTAL IMPACT The proposed action does not constitute a project under the California Environmental Quality Act (“CEQA”), and it can be seen with certainty that it will have no impact on the environment. As such, this matter is exempt under CEQA. FISCAL IMPACT The recommended adjustments are projected to increase the City’s Operating Budget cost by approximately $34,000 for the remainder of Fiscal Year 2019-20. The anticipated increase is a conservative projection as it is based on actual hours worked during the summer season of the affected part-time employees. At this time, no additional budget appropriation is requested as the projected increase can be absorbed in the Fiscal Year 2019-20 General Fund Operating Budget. RECOMMENDATION It is recommended that the City Council determines that this project is exempt under the California Environmental Quality Act (“CEQA”); adopt Resolution No. 7288 approving wage adjustments for unrepresented, non-benefited part-time employees in accordance with California’s minimum wage increase effective January 1, 2020. Attachment: Resolution No. 7288