Exhibit CC 10-04-2016 Item No. 13 B - Redlined Draft Ordinance
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ORDINANCE NO.
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;
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:
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Section 1: Title 3 of the Cupertino Municipal Code is hereby amended by adding Chapter 3.37
(Minimum Wage) to be numbered, entitled and to read 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.
(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.
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(f) “Welfare-to-Work Program” shall mean the CalWORKS Program, County Adult
Assistance Program (CAAP) which includes the Personal Assisted Employment Services (PAES)
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 ($15.00), except when these scheduled increases are temporarily suspended under
subdivision (f). To prevent inflation from eroding its value, beginning on January 1, 2020, and
each January 1st thereafter, the Minimum Wage shall increase by an amount corresponding to the
increase, if any, in the cost of living, not to exceed 5%. The prior year's increase in the cost of
living shall be measured by the percentage increase, if any, as of August of the immediately
preceding year of the Bay Area Consumer Price Index (Urban Wage Earners and Clerical Workers,
San Francisco-Oakland-San Jose, CA for All Items) or its successor index as published by the U.S.
Department of Labor or its successor agency, with the amount of the Minimum Wage increase
rounded to the nearest multiple of five ($.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.
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(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 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
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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) 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 chapter. 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 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.
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(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 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.
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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 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
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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 administ rative costs of enforcement and reasonable attorney’s
fees.
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.
Section 2: 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.
Section 3: 3.37.140 Constitutionality; Severability.
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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 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.
Section 4: Certification.
The City Clerk shall certify to the passage and adoption of this Ordinance and shall give notice of
its adoption as required by law. Pursuant to Government Code Section 36933, a summary of this
Ordinance may be published and posted in lieu of publication and posting of the entire text.
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:
PASSED:
Vote: Members of the City Council
Ayes:
Noes:
Absent:
Abstain:
ATTEST: APPROVED:
______________________ ______________________
Grace Schmidt, City Clerk Rod SinksBarry Chang, Mayor, City of
Cupertino