Savannah City Council Living Wage Proposal and Fiscal Impact
"Explore the Savannah City Council's proposal to amend the employee pay policy to include a living wage, the definition and calculation of a living wage, limitations on city contracts, and the fiscal impact assessment. Discover how this policy change can impact the workforce and the city's budget."
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Presentation Transcript
Savannah City Council Work Session Proposal to amend the City of Proposal to amend the City of Savannah Employee Pay Policy to Savannah Employee Pay Policy to include Payment of a Living Wage include Payment of a Living Wage
Purpose of the Citys Pay Policy To outline and explain the City of Savannah s pay policy as it applies to all classes of employees. To establish and maintain policies that are fair and consistent with applicable federal, state and other laws governing pay. 2
What is a Living Wage ? Living Wage is an hourly rate of pay intended to provide the amount of income, adjusted for inflation, that is needed to provide a decent standard of living. The purpose of a Living Wage is to ensure that City Employees can meet their basic needs. 3
Can City contracts include a Living Wage requirement? Georgia state law prohibits local governments from controlling or affecting contractor wages or employee benefits. O.C.G.A. 34-4-3.1(c) provides: No No local government entity may through its purchasing or local government entity may through its purchasing or contracting procedures seek to control or affect the wages contracting procedures seek to control or affect the wages or employment benefits provided by its vendors, contractors, or employment benefits provided by its vendors, contractors, service providers, or other parties doing business with the service providers, or other parties doing business with the local government entity local government entity. . 4
Calculating the Living Wage The most widely accepted living wage calculation is administered by Massachusetts Institute of Technology (MIT), which records Chatham County s living wage as $10.87. Hourly Wage Chatham County Living Wage Poverty Wage Federal Minimum Wage 1 Worker $10.87 $5.00 $7.25 Annual Expenses Food Child Care Medical Housing Transportation Other Required annual income after taxes Annual taxes Required annual income before taxes 1 Worker $3,011 $0 The cost broken down in further detail. $2,111 $7,596 $4,290 $2,146 $19,154 $3,448 $22,602 5
Fiscal Impact of Living Wage Policy According to a review completed by Human Resources, based on currently budgeted positions, paying the current Living Wage to full-time and part-time employees with benefits would have a fiscal impact of $375 more a year. Under these criteria, only one position would need a wage increase to meet the new minimum. The position would require a $0.36 increase from the current hourly rate of $10.51 per hour. 6
Section II. Definitions Living Wage Requirement Living Wage is anhourly rate of pay calculated as specified in this policy that is intended to provide the amount of income adjusted for inflation that is needed to provide a decent standard of living. The purpose of a Living Wage is to ensure that City Employees can meet their basic needs. Section III. Policy (G.1.) 1. Subject to City Manager recommendation and City Council approval as part of the annual budget approval process. 2. Applies to part-time and full-time benefits-eligible employees shall be paid no less than a living wage. 3. Determined by using the nationally-recognized Massachusetts Institute of Technology (MIT) Living Wage Calculator, or a comparable calculator should the MIT Calculator no longer remain current or reliable. 7
Section III. Policy (G.2.) Annual Wage Assessment 1. Staff will complete an annual review of changes in living wage calculations and determine the City s living wage proposal to City Council. 2. Recommend annual living wage increase: a. not exceed three percent (3%); and b. in no event exceed the compensation increase provided to employees of the City not subject to this policy. 8
Posting of Living Wage Section III. Policy (G.3.) The City s living wage rate will be: a. Posted on internal informational sites and work locations b. Made available to employees upon request Living Wage Review Section III. Policy (G.4.) As part of the annual budget process, the City Manager or his/her designee will report to the Mayor and Aldermen: a. Current and projected living wage and related calculation data b. Annual performance in achieving payment of the living wage c. The budget impact of paying living wages in the coming budget year d. Any wage compression issues 9
QUESTIONS? 10
