San Jose lawmakers on Tuesday will revisit a debate over construction companies hiring local workers and paying them prevailing wages on city-subsidized construction.
In June, the City Council approved a law to prevent contractors from exploiting low-wage workers. The decision was part of a lengthy process spurred by negotiations between labor unions and the city. The South Bay Labor Council, its affiliate nonprofit think-tank Working Partnerships USA, the Santa Clara-San Benito Counties Building Trades and the Mechanical, Electrical, Plumbing, and Sprinkler Fitters Union were considering a potential ballot measure to enact a gross-receipt tax on large corporations.
Labor leaders, however, pulled the measure in exchange for San Jose adopting certain workforce standards that would ensure workers collect prevailing wages. At its June 25 meeting, the council moved forward with the first part of that deal—opting to study other aspects, like the local hire requirement, at a later date.
According to a July 24 memo from San Jose Economic Development Director Kim Walesh and Public Works Director Matt Cano, city officials are now recommending that the council adopt a law that encompasses all of those components. Walesh and Cano previously cited legal, administrative and enforcement resources as reasons why the study of local hire provisions was taking so long.
“[The first law] was limited to prevailing wage requirements and did not include provisions for apprentices, local hiring and targeted workers because these provisions needed further analysis,” Walesh and Cano wrote. “Staff anticipated bringing back a second ordinance that would address minimum labor requirements for using apprentices, local workers and underrepresented workers.”
The core of the new law addresses what constitutes a city subsidy, local hire provisions and exclusions for affordable housing developments.
A point of contention at the June 25 meeting was whether the downtown high-rise incentive would be considered a subsidy. The program looks to expedite development by cutting certain fees. But developers say that an increased cost of labor would delay building.
In preparation for Tuesday, Elisabeth Handler, a spokesperson for the economic development department, said that the city does consider the high-rise incentive program a subsidy by definition.
If the council gives the proposal the green light at its first meeting post-summer recess, private construction companies that receive subsidies must “use good faith efforts to have ‘local residents’ perform at least 30 percent of the total work hours necessary to complete the construction work.”
City officials referred to San Francisco's local hiring policy for construction to help define a “local resident.” In this case, it's someone who is “domiciled” in Santa Clara County for at least seven calendar days before starting work on the project. That means the person has the intent to stay and live in the area.
Construction companies accepting city subsidies would also need to use “good faith efforts” to hire "underrepresented workers as entry-level apprentices to perform 25 percent of the total apprentice hours.”
The city has defined “underrepresented workers” as people who receive government assistance, are at risk of losing their home, are a veteran or are a survivor of labor trafficking, among other things.
The San Jose City Council meets at 1:30pm Tuesday inside the council chambers at City Hall, 200 E. Santa Clara St. in San Jose. Click here to read the agenda.