Business & Economy

Irvine drops $10.82 minimum pay requirement for contracted businesses

The city of Irvine is pulling back its living wage standard that sets a minimum pay for certain employers that contract with the city.
The city of Irvine is pulling back its living wage standard that sets a minimum pay for certain employers that contract with the city.
Photo by David M. Goehring via Flickr Creative Commons

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The city of Irvine is pulling back its living wage standard that sets a minimum pay for certain employers that contract with the city.

The Irvine City Council Tuesday voted 4 to 1 to repeal the city’s living wage ordinance adopted in 2007.  Council member Beth Krom was the sole dissenting vote. The repeal will go through one more hearing before it becomes law.

The ordinance requires businesses that have an annual city contract of $100,000 or more to pay employees a minimum of $10.82 an hour, the same rate the city pays its lowest wage earners with benefits.

The Council’s vote to reverse the ordinance comes one week after the city of Los Angeles voted to raise it’s minimum wage to $15 an hour over the next five years.

“Instead of trying to impose a feel-good wage, we should all be seeking ways to have our economy grow,” said Councilmember Jeff Lalloway.

Irvine’s living wage ordinance also requires its contractors to pay employees who work in other parts of Orange County at least $10.82 an hour.

Councilmember Christina Shea proposed repealing the ordinance last month when a business withdrew its bid for a custodial contract to clean city buildings.

The contractor claimed it didn’t know it would have to pay all its employees in Orange County the city minimum wage.

Shea said the living wage should have been applied to all city contracts, not just the ones over $100,000.

“If we’re going to be fair, it should be applied across the board and it wasn’t,” she said.

Currently, 15 contracts offering janitorial, security and landscaping services fall under the city’s living wage ordinance. It's unclear how many employees were affected, Irvine city staff said.

Under the repeal, existing contracts would continue paying the $10.82 wage at least until they expire. Three of those contract agreements are set to end on June 30.  

“Going backwards is something that is unheard of,” said Irvine restaurant owner Farrah Khan, 48. “We went backwards.”

When Irvine’s living wage ordinance was adopted, California’s minimum wage was $7.50 an hour, according to the state Department of Industrial Relations.

“Irvine was kind of leading the way on that,” said Ana Cabral, political organizer for the Orange County Labor Federation.

About a dozen people spoke out against the repeal Tuesday night. City-contracted employees, who could be at risk of having their paychecks cut due to the repeal, were absent from the conversation.

That's in stark contrast to Los Angeles, where labor workers have been extremely vocal at city meetings about raising the minimum wage.

“It’s harder work in Orange County,” said Cabral. “It’s a conservative county, for the most part.”

Cabral added that low-wage workers tend to not live in South Orange County but in the central parts where it's considered more affordable.

Though the living wage ordinance is likely to be abolished this summer, the City Council encouraged all businesses with city contracts to consider voluntarily paying employees a wage higher than the state’s $9 an hour. 

“We’ve seen over the years that putting a goal in has actually been successful,” said Councilmember  Shea.