Nonprofits win exemption to LA minimum wage increase

Jose Osuna (middle) and trainees of Homeboy Industries meet with Councilman Gil Cedillo after a minimum wage vote.
Jose Osuna (middle) and trainees of Homeboy Industries meet with Councilman Gil Cedillo after a minimum wage vote.
Brian Watt

Three nonprofit organizations that train "transitional workers" in Los Angeles will get an exemption from paying the city's increasing minimum wage.  

The Los Angeles City Council voted unanimously Tuesday to instruct city attorneys to draft the exemption as an amendment to the already approved plan to raise the city's minimum wage to $15.00 per hour by 2020.

The ordinance would then need to be approved by the council before going into effect.

The exemption would apply to "trainees" in programs run by Chrysalis, Homeboy Industries, and the L.A. Conservation Corps, which create jobs for people who have difficulty finding work: the chronically homeless, former gang members and prison inmates, and at-risk youth.  

The nonprofits provide minimum-wage jobs designed to prepare these "transitional" workers for the workplace.  

The exemption would allow the nonprofits to pay the "trainees" the state minimum wage — rather than the city's — for the 18 months they participate in their program. The state's minimum wage is scheduled to rise from $9 per hour to $10 in January. 

Representatives of the three nonprofits, as well as participants in their programs, have been a steady presence at City Council hearings on the minimum wage.  They've maintained that without an exemption, they'd be forced to cut back on the number of transitional workers they serve.

Their testimony managed to sway even some critics of exemptions.

"Although I have been skeptical of any exemptions, as I feel that no workers deserve a sub-minimum wage, I have seen an outpouring of compelling testimony from program participants who feel that their jobs and the jobs of future participants could be in jeopardy,"David Huerta of the Service Employees International Union wrote in a letter to City Council members.

Mayor Eric Garcetti signed the minimum wage law earlier this month. The first bump up — to $10.50 per hour — goes into effect July 1, 2016, for businesses with 26 or more employees.

The nonprofit exemption is one of a handful of issues the City Council set aside while approving the framework.  The Council's economic development committee is also considering an exemption for employers with union workers and a proposal on paid sick leave.