CC Ordinance No. 16-2151 to Add Chapter 3.37 (Minimum Wage Ordinance) to Title 3 (Revenue and Finance) of the Cupertino Municipal Code to Increase the City-Wide Minimum WageORDINANCE NO. 16-2151
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CUPERTINO TO
ADD CHAPTER 3.37 (MINIMUM WAGE ORDINANCE) TO TITLE 3 (REVENUE
AND FINANCE) OF THE CUPERTINO MUNICIPAL CODE TO INCREASE THE
CITY-WIDE MINIMUM WAGE
WHEREAS, families and workers need to earn a living wage, and public policies
which help achieve that goal are beneficial; and
WHEREAS, payment of a minimum wage advances the interests of the City as a
whole by creating jobs that keep workers and their families out of poverty; and
WHEREAS, a minimum wage will enable a worker to meet basic needs and
avoid economic hardship; and
WHEREAS, this ordinance is intended to improve the quality of services
provided in the City to the public by reducing turnover, absenteeism, and instability in ·
the workplace; and
WHEREAS, prompt and efficient enforcement of this Chapter will provide
workers with economic security and the assurance that their rights will be respected;
and
WHEREAS, key findings of a regional minimum wage study and survey
performed by the Institute for Research on Labor and Employment at UC Berkeley and
BW Research showed that increasing the minimum wage to $15.00 an hour by 2019 in
Santa Clara County would:
• Increase earnings for 250,000 workers
• Raise average annual earnings of affected workers by 19.4 percent, or
$3,200.00 (in 2014 dollars)
• Slightly increase average prices in Santa Clara County by 0.2% over three
years
• Have a net effect on employment that is slightly negative at the county
level (1,450 jobs) and close to zero at a 10 county regional level;
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WHEREAS, the Cities Association of Santa Clara County recommends a regional
minimum wage increase to $15.00 by 2019 as an effort to create an even playing field
that mitigates the impacts to local economies, provides equity to our shared economy,
and implements regional consistency across the county.
NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF CUPERTINO
DOES ORDAIN AS FOLLOWS:
3.37 Minimum Wage.
3.37.010 Title.
This chapter shall be known as the "Minimum Wage Ordinance."
3.37.020 Authority.
This chapter is adopted pursuant to the powers vested in the City of Cupertino under
the laws and Constitution of the state of California, including, but not limited to, the
police powers vested in the City pursuant to Article XI, Section 7 of the California
Constitution and Section 1205(b) of the California Labor Code.
3.37.030 Definitions.
The following words and phrases, whenever used in the chapter, shall be construed as
defined in this section:
(a) "City" shall mean the City of Cupertino, California or any agency designated by
the City to administer the terms of this chapter.
(b) "Employee" shall mean any person who:
1. In a calendar week performs at least two (2) hours of work for an employer as
defined below; and
2. Qualifies as an employee entitled to payment of a minimum wage from any
employer under the California Minimum Wage Law, as provided under Sec.
1197 of the California Labor Code and wage orders published by the
California Industrial Welfare Commission, or is a participant in a welfare-to-
work Program.
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(c) "Employer" shall mean any person, including corporate officers or executives, as
defined in Sec. 18 of the California Labor Code, who directly or indirectly through any
other person, including through the services of a temporary employment agency,
staffing agency or similar entity, employs or exercises control over the wages, hours or
working conditions of any employee and who is either subject to the City's business
license requirements or maintains a business facility in the city.
(d) "Governmental agencies" shall include federal agencies, state agencies, school
districts and auxiliary organizations as defined under Education Code Sections 72670( c)
and 89901. "Governmental agency" does not include the City of Cupertino.
(e) "Minimum wage" shall have the meaning set forth in Section 3.37.040 of this
chapter.
(f) "Welfare-to-Work Program" shall mean the CalWORKS Program, County Adult
Assistance Program (CAAP) which includes the Personal Assisted Employment
Services (P AES) Program, and General Assistance Program, and any successor
programs that are substantially similar to them.
3.37.040 Minimum wage.
(a) Employers shall pay employees no less than the minimum wage set forth in this
section for each . hour worked within the geographic boundaries of the City of
Cupertino. Governmental agencies are exempt from the minimum wage requirements
under the principle of governmental immunity when the work performed is related to
the agency's governmental function.
(b) Effective January 1, 2017, the Minimum Wage shall be an hourly rate of twelve
dollars ($12.00). On January 1, 2018, the minimum wage shall be an hourly rate of
thirteen dollars and fifty cents ($13.50). On January 1, 2019, the minimum wage shall be
an hourly rate of fifteen dollars ($15.00), except when these scheduled increases are
temporarily suspended under subdivision (f). To prevent inflation from eroding its
value, beginning on January 1, 2020, and each January 1st thereafter, the Minimum
Wage shall increase by an amount corresponding to the increase, if any, in the cost of
living, not to exceed 5%. The prior year's increase in the cost of living shall be measured
by the percentage increase, if any, as of August of the immediately preceding year of
the Bay Area Consumer Price Index (Urban Wage Earners and Clerical Workers, San
Francisco-Oakland-San Jose, CA for All Items) or its successor index as published by the
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U.S. Department of Labor or its successor agency, with the amount of the Minimum
Wage increase rounded to the nearest multiple of five ($.05) cents. If there is no net
increase in the cost of living, the minimum wage shall remain unchanged for that year.
The adjusted Minimum Wage shall be announced by October 1st of each year, or as
soon as practicable thereafter if the Consumer Price Index for August has not yet been
published, and shall become effective as the new Minimum Wage on January 1st of the
following year.
(c) Commissions or guaranteed gratuities, not including discretionary tips, may be
counted toward payment of the minimum wage when the commissions or guaranteed
gratuities are earned and paid together with other compensation paid to an employee
and are equal to or greater than the current minimum wage. For each pay period,
employers shall pay the employee an amount that equals or exceeds the current hourly
minimum wage.
(d) The employer may offset a portion of the minimum wage for housing and meal
costs only if the offsets are the same as those available under the California Minimum
Wage Law. The offsets shall only be recognized if there is a prior voluntary agreement
between the employer and the employee.
(e) A violation for unlawfully failing to pay the minimum wage shall be deemed to
continue from the date immediately following the date that the wages were due and
payable as provided in Part 1 (commencing with Section 200) of Division 2 of the
California Labor Code, to the date immediately preceding the date the wages are paid
in full.
(f) On or before September 1, 2017, and on or before every September 1 thereafter
until the minimum wage is fifteen dollars ($15.00) per hour, to ensure that economic
conditions can support a minimum wage increase, the City Manager or designee shall
annually make a determination and certify to the City Council whether each condition
below is met:
(A) Total nonfarm employment for California, seasonally adjusted, decreased
over the three-month period from April to June, inclusive, prior to the September
1 determination. This calculation shall compare seasonally adjusted total
nonfarm employment in June to seasonally adjusted total nonfarm employment
in March, as reported by the Employment Development Department.
(B) Total nonfarm employment for California, seasonally adjusted, decreased
over the six-month period from January to June, inclusive, prior to the September
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1 determination. This calculation shall compare seasonally adjusted total
nonfarm employment in June to seasonally adjusted total nonfarm employment
in December, as reported by the Employment Development Department.
(C) California state retail sales and use tax cash receipts from a 3.9375-percent
tax rate for the July 1 to June 30, inclusive, period ending one month prior to the
September 1 determination is less than retail sales and use tax cash receipts from
a 3.9375-percent tax rate for the July 1 to June 30, inclusive, period ending 14
months prior to the September 1 determination. The calculation for the condition
specified in this subparagraph shall be made by the City Manager or designee
using data posted online by the State Board of Equalization, following the
procedure specified in paragraph (1) of subdivision (c) of Section 1182.12 of the
California Labor Code as follows:
(i) The State Board of Equalization shall publish by the 10th of each month
on its Internet Web site the total retail sales (sales before adjustments) for
the prior month derived from their daily retail sales and use tax reports.
(ii) The State Board of Equalization shall publish by the 10th of each
month on its Internet Web site the monthly factor required to convert the
prior month's retail sales and use tax total from all tax rates to a retail
sales and use tax total from a 3.9375-percent tax rate.
(iii) The Department of Finance shall multiply the monthly total from
clause (i) by the monthly factor from clause (ii) for each month.
(iv) The Department of Finance shall sum the monthly totals calculated in
clause (iii) to calculate the 12-month July 1 to June 30, inclusive, totals
needed for the comparison in this subparagraph.
(g) If, for any year, the condition in either subparagraph (A) or (B) of paragraph (f) is
met, and if the condition in subparagraph (C) of paragraph (f) is met, the City Council
may, on or before October 1 of that year, make a determination to temporarily suspend
the minimum wage increase scheduled for the following year.
(h) If the City Council makes a determination to temporarily suspend the scheduled
minimum wage increases for the following year, all dates specified in paragraph (b)
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that are subsequent to the October 1 determination date shall be postponed by an
additional year.
3.37.050 Waiver through collective bargaining.
All or any portion of the applicable requirements of this Chapter shall not apply to
Employees covered by a bona fide collective bargaining agreement to the extent that
such requirements are expressly waived in the collective bargaining agreement in clear
and unambiguous terms.
3.37.060 Notice, posting and payroll records.
(a) By November 1st or as soon as practicable thereafter of each year, the City shall
publish and make available to employers a bulletin announcing the adjusted minimum
wage rate for the upcoming year, which shall take effect on January 1st. In conjunction
with this bulletin, the City shall by November 1st, or as soon as practicable thereafter of
each year, publish and make available to employers, in the top three languages spoken
in the city based on the latest available census information for the city, a notice suitable
for posting by employers in the workplace informing employees of the current
minimum wage rate and of their rights under this chapter.
(b) Every employer shall post in a conspicuous place at any workplace or job site
where any employee works the notice published each year by the City informing
employees of the current minimum wage rate and of their rights under this chapter.
Every employer shall post such notices in the top three languages spoken in the city
based on the latest available census information for the city at the workplace or job site.
Every employer shall also provide each employee at the time of hire with the
employer's name, address, and telephone number in writing.
( c) Employers shall retain payroll records pertaining to employees for a period of four
years, and shall allow the City access to such records, with appropriate notice and at a
mutually agreeable time, to monitor compliance with the requirements of this chapte r.
Where an employer does not maintain or retain adequate records documenting wages
paid or does not allow the City reasonable access to such records, the employee's
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account of how much he or she was paid shall be presumed to be accurate, absent clear
and convincing evidence otherwise.
3.37.070 Retaliation prohibited.
(a) It is unlawful for an employer or any other party to discriminate in any manner
or take adverse action against any person in retaliation for exercising rights protected
under this chapter. Rights protected under this chapter include, but are not limited to:
the right to file a complaint or inform any person about any party's alleged
noncompliance with this chapter; and the right to inform any person of his or her
potential rights under this chapter and to assist him or her in asserting such rights.
Protections of this chapter shall apply to any person who mistakenly, but in good faith,
alleges noncompliance with this chapter.
(b) Taking adverse action against a person within ninety (90) days of the person's
exercise of rights protected under this chapter shall raise a rebuttable presumption of
having done so in retaliation for the exercise of such rights.
3.37 .080 Implementation.
(a) Guidelines . The City shall be authorized to coordinate implementation and
enforcement of this chapter and may promulgate appropriate guidelines or rules for
such purposes. Any guidelines or rules promulgated by the City shall have the force
and effect of law and may be relied on by employers, employees and other parties to
determine their rights and responsibilities under this chapter. Any guidelines or rules
may establish procedures for ensuring fair, efficient and cost effective implementation
of this chapter, including supplementary procedures for helping to inform employees of
their rights under this chapter, for monitoring employer compliance with this chapter,
and for providing administrative hearings to determine whether an employer or other
person has violated the requirements of this chapter.
(b) Reporting Violations. An employee or any other person may report to the City in
writing any suspected violation of this chapter. The City shall encourage reporting
pursuant to this subsection by keeping confidential, to the maximum extent permitted
by applicable laws, the name and other identifying information of the employee or
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person reporting the violation. Provided, however, that with the authorization of such
person, the City may disclose his or her name and identifying information as necessary
to enforce this chapter or other employee protection laws. In order to further encourage
reporting by employees, if the City notifies an employer that the City is investigating a
complaint, the City shall require the employer to post or otherwise notify its employees
that the City is conducting an investigation, using a form provided by the City.
( c) Investigation. The City shall be responsible for investigating any possible
violations of this chapter by an employer or other person. The City shall have the
authority to inspect workplaces, interview persons and request the City Attorney to
subpoena books, papers, records, or other items relevant to the enforcement of this
chapter.
(d) Informal Resolution. The City shall make every effort to resolve complaints
informally, in a timely manner, and shall take no more than one year to resolve any
matter, before initiating an enforcement action. The failure of the City to meet these
timelines within one year shall not be grounds for closure or dismissal of the complaint.
3.37.090 Enforcement.
(a) Where prompt compliance is not forthcoming, the City shall take any
appropriate enforcement action to secure compliance. All remedies in the Cupertino
Municipal Code ("the code") are considered cumulative and the use of one or more
remedies by the City shall not bar the use of any other remedy for the purpose of
enforcing these provisions.
(1) The City may issue an administrative citation pursuant to Chapter 3.37 of the
code with a fine of not more than fifty dollars ($50.00) for each day or portion thereof
and for each employee or person as to whom the violation occurred or continued. The
City Council may modify the fine amount by resolution.
(2) Alternatively, the City may initiate a proceeding under Chapter 3.37 of the code
by issuing a compliance order.
(3) The City may initiate a civil action for injunctive relief and damages and civil
penalties in a court of competent jurisdiction.
(b) Any person aggrieved by a violation of this chapter, any entity a member of
which is aggrieved by a violation of this chapter, or any other person or entity acting on
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behalf of the public as provided for under applicable state law, may bring a civil action
in a court of competent jurisdiction against the employer or other person violating this
chapter and, upon prevailing, shall be awarded reasonable attorneys' fees and costs and
shall be entitled to such legal or equitable relief as may be appropriate to remedy the
violation, including, without limitation, the payment of any back wages unlawfully
withheld, the payment of an additional sum as a civil penalty in the amount of fifty
dollars ($50.00) to each employee or person whose rights under this chapter were
violated for each day that the violation occurred or continued, reinstatement in
employment and/or injunctive relief. Provided, however, that any person or entity
enforcing this chapter on behalf of the public as provided for under applicable state law
shall, upon prevailing, be entitled only to equitable, injunctive or restitutionary relief to
employees, and reasonable attorneys' fees and costs.
(c) This section shall not be construed to limit an employee's right to bring legal
action for a violation of any other laws concerning wages, hours, or other standards or
rights nor shall exhaustion of remedies under this chapter be a prerequisite to the
assertion of any right.
(d) Except where prohibited by state or federal law, City agencies or departments
may revoke or suspend any registration certificates, permits or licenses held or
requested by the employer until such time as the violation is remedied.
(e) Relief. The remedies for a violation of this chapter include~ but are not limited to:
(1) Reinstatement, the payment of back wages unlawfully withheld, and the
payment of an additional sum as a civil penalty in the amount of fifty dollars ($50.00) to
each employee or person whose rights under this chapter were violated for each day or
portion thereof that the violation occurred or continued, and fines imposed pursuant to
other provisions of this code or state law.
(2) Interest on all due and unpaid wages at the rate of interest specified in
subsection (b) of Section 3289 of the California Civil Code, which shall accrue from the
date that the wages were due and payable as provided in Part 1 (commencing with
Section 200) of Division 2 of the California Labor Code, to the date the wages are paid in
full.
(3) Reimbursement of the City's administrative costs of enforcement and reasonable
attorney's fees .
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3.37.100 Relationship to other requirements.
This chapter provides for payment of a local minimum wage and shall not be construed
to preempt or otherwise limit or affect the applicability of any other law, regulation,
requirement, policy or standard that provides for payment of higher or supplemental
wages or benefits, or that extends other protections.
3 .37.110 Application of minimum wage to welfare-to-work programs.
The minimum wage established pursuant to Section 3.80.040(b) of this chapter shall
apply to the Welfare-to-Work Programs under which persons must perform work in
exchange for receipt of benefits. Participants in Welfare-to-Work Programs shall not,
during a given benefits period, be required to work more than a number of hours equal
to the value of all cash benefits received during that period, divided by the minimum
wage.
3.37.120 Fees.
Nothing herein shall preclude the City Council from imposing a cost recovery fee on
all employers to pay the cost of administering this chapter.
3.37.130 CEQA Exemption.
The City Council finds, pursuant to Title 14 of the California Code of Regulations,
Section 15378(b )(2), that this ordinance is exempt from the requirements of the
California Environmental Quality Act (CEQA) in that the adoption of an ordinance of
general policy and procedure does not constitute a project within the meaning of
CEQA.
3.37.140 Constitutionality; Severability.
If any section, subsection, sentence, clause or phrase of this ordinance is for any reason
held to be invalid, such decision or decisions shall not affect the validity of the
remaining portions of this ordinance. The City Council hereby declares that it would
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have passed this ordinance, and each section, subsection, sentence, clause -and phrase
thereof irrespective of the fact that any one or more sections, subsections, sentences,
clauses or phrases be declared invalid.
INTRODUCED at a regular meeting of the City Council of the City of Cupertino the
20th day of September, 2016, and ENACTED at a regular meeting of the City Council of
the City of Cupertino the 4th day of October 2016, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
ATTEST:
Members of the City Council
Chang, Paul, Sinks, Wong
Vaidhyanathan
None
None
~it
Grace Schmidt, City Clerk
STATE OF CALIFORNIA )
COUNTY OF SANTA CLARA )
CITY OF CUPERTINO )
I, GRACE SCHMIDT, City Clerk and ex-officio Clerk of the City
Council of the City of Cupertino, California, do hereby certify the attached
to be a true and correct copy of Ordinance No. 16-2151, which was
enacted on October 4, 2016, and that it has been published or posted
pursuant to law (G.C. 40806).
IN WITNESS WHEREOF, I have hereunto set my hand and seal
this 5th day of October, 2016.
GRACE SCHMIDT, City Clerk and Ex-officio Clerk
of the City Council of the City of Cupertino, California