a. Adopt a resolution approving a new Council Policy 0-44 entitled "Wage Theft Prevention Policy.

Transcription

1 COUNCIL AGENDA: 05/24/16 ITEM: CITY OF SANjOSE CAPITAL OF SILICON VALLEY TO: HONORABLE MAYOR AND CITY COUNCIL Memorandum FROM: Barry Ng SUBJECT: WAGE THEFT PREVENTION DATE: May 12, 2016 Approved Date RECOMMENDATION a. Adopt a resolution approving a new Council Policy 0-44 entitled "Wage Theft Prevention Policy. b. Approve an ordinance amending Title 6 of the San Jose Municipal Code to specifically authorize the denial, suspension or revocation of a permit or license issued under Title 6 based upon a final judgment by a court or by final administrative action of an investigatory government agency that a violation of wage and hour laws occurred and has not been satisfied. OUTCOME To establish a Council Policy to prevent wage theft on City contracts as well as deny, suspend or revoke certain City permits and licenses to businesses with unpaid wage theft judgments. EXECUTIVE SUMMARY At the June 23, 2015 Council Priority Setting session, wage theft and how to combat it was deemed Council's highest priority. Staff has completed its research and recommends that the City adopt a wage theft prevention policy. The proposed changes would: (1) amend the City's current Bid Certification and RFP Proposal Certification documents to include specific representations regarding any final wage theft judgments or orders within the past five years and (2) authorize the disqualification of a potential contractor under certain defined circumstances relating to a final wage theft judgment or order. In addition, this policy would add authority to suspend or revoke Title 6 permits when violations of applicable wage and hour laws, as determined by a final judgment by a court or by final administrative action of an investigatory government agency, have not been satisfied.

2 May 12, 2016 Page 2 BACKGROUND At the June 23, 2015 Council Priority Setting session, the issue of wage theft and how to combat it was deemed to be the Council's highest priority. Staff was directed to review the following policy options and return with an analysis: Revise contract and RFP requirements to protect the City from contracting services from businesses with unpaid wage theft judgments; Authorize Departments that issue business licenses or City issued permits to deny, suspend or revoke licenses and permits to businesses with unpaid wage theft judgments; and Any other readily available information staff may provide on the issue of wage theft. Local and national studies on wage theft report that wage theft is a pervasive and chronic problem that disproportionately affects immigrant and low-wage workers. According to the National Employment Law Project, wage theft is not incidental, aberrant or rare, or committed only by a few rogue employers at the periphery of the labor market. Instead, it takes place in industries that span the economy from retail, restaurants and grocery stores; caregiver industries; manufacturing, construction and wholesalers; building services such as janitorial and security; and personal services such as dry cleaning and laundry, car washes and beauty and nail salons. According to the Katharine & George Alexander Community Law Center's Employment Clinic (at Santa Clara University) statistics from 2007 to 2011, the percentage of wage theft complaints by industry was: food services 15%; administrative/clerical 9%; construction worker 8%; janitor 6%; sales/service 6%; driver 5%; professional technician 5%; maintenance 4%; health services 3%; teaching 3%; housekeeper 2%; machine operator 2%; elder disabled care 2%; and other 28%. Additionally, 64% of the Clinic's clients were Hispanic, 14% were Asian/Pacific Islander, 12% were white and 6% were black. What is Wage Theft? Federal, state and local laws set requirements regarding minimum working conditions. Wage theft occurs when an employer fails to pay its workers the wages to which they are legally entitled. Wage theft is the crime of stealing earned wages from workers. There are numerous forms of wage theft involving violations of employment laws, but all result in workers earning less than they are entitled to earn, including: H Paying workers less than the legally required minimum wage for every hour that he or she works; Paying workers a fixed daily or weekly amount that fails to compensate he or she at the required minimum hourly rate or applicable overtime rate;

3 May 12, 2016 Page 3 Committing payroll fraud by misclassifying an employee as an independent contractor or as an employee "exempt" from overtime and break requirements; a Requiring employees to record fewer hours on their timecards than they actually worked, forcing workers to work "off the clock"; Denying workers their required meal and rest periods; Stealing tips from workers or forcing workers to share tips with non-tipped workers; Deducting "fees" from wages earned and owed; a Issuing paychecks late or without the necessary funds; or a Not paying workers at all. Although the practices listed above are all illegal under federal, state and local law, they occur nonetheless and they occur on an all-too-often basis. Wage theft hurts workers, their families, their respective communities, as well as law-abiding responsible business employers and owners who must compete with those who cut costs by cheating their employees. Responsible business employers are effectively punished for following the laws by having to unfairly compete in the marketplace. Wage theft hurts the economy as those employers that violate wage laws also avoid paying their fair share of taxes. While studies have concluded that wage theft disproportionately affects immigrants, women and people of color, it occurs across all demographic groups and in industries that span the economy. These violations have significant social and economic impacts and can lead to increased homelessness, overcrowding, hunger, decreased mobility and difficulty accessing health care and paying medical bills. Unfortunately, many workers who are victims of wage theft never speak out because they fear or face retaliation from their employers. Labor Enforcement at the Local and State Level City of San Jose The City of San Jose already has a number of policies and contractual provisions in-place that were specifically designed to protect employees from wage theft: a Prevailing wage and living wage policies that are proactively enforced S Requiring proposers to submit an Employee Work Environment Questionnaire with their proposals for long-term service contracts such as janitorial, security and landscape maintenance. The Questionnaire is intended to review a proposer's history as an employer and work condition commitments. Proposers are to disclose any final orders or final judgments from the California Department of Fair Employment and Housing (DFEH), California Department of Industrial Relations/Division of Occupational Safety and Health (Cal/OSHA) and California Department of Industrial Relations/Labor Commissioner; S Requiring prime contractors to extend the City's wage requirements to their respective subcontractors; and

4 May 12,2016 Page 4 S Remedies for breach of wage requirements that include the City's ability to. withhold payment to contractors until all required documentation is submitted; require the contractor or subcontractor to pay restitution to those workers who did not receive proper wages; suspend or terminate agreement for cause; assess treble damages for wage violations (contractor to pay the City the sum of three times the difference between the actual amount of wages paid and the amount of wages that should have been paid); and debar contractor or subcontractor from future City contracts. As a result of these policies and contractual provisions, the City's wage enforcement record is strong. Over the past ten years: 3,000 City contracts (construction and service & maintenance) totaling $1.7 billion have been monitored; 700 wage violations have been identified involving 3,500 workers; $3.4 million has been recovered in back wages and paid to workers; $2.1 million in liquidated damages has been assessed to 290 contractors; and H 2 contractors have been debarred from bidding on City of San Jose contracts due to the egregious nature of the wage violations. In November 2012, San Jose voters approved a minimum wage ordinance that became effective on March 11, The Ordinance raised the minimum wage for employees performing work in San Jose from the California statewide minimum wage. The City's Minimum Wage Program is complaint driven and is not proactive. As of December 31,2015: 52 minimum wage complaints have been received; 44 complaints have been investigated and are settled; 8 complaints are still being investigated; 10 businesses were found to have violated the Ordinance; 145 workers were underpaid a total of $37,023.32; H All violations resolved at the informal resolution level; i.e., business owners have made restitution to the affected workers within 30 days of notification of the violation; Over 50% of the complaints received have been from the Retail/Sales and Restaurant/Food industries; and Retail/Sales and Restaurant/Food industries have accounted for all verified wage violations in San Jose since the effective date of the Ordinance. In the event a business owner does not correct the violation within 30 days, other enforcement options include: issuance of a Compliance Order; issuance of an Administrative Citation with fines of not more than $50 per day per employee; and initiation of a civil action for injunctive relief.

5 May 12, 2016 Page 5 Additionally, as a number of local cities were contemplating minimum wage policies, they sought our Office of Equality Assurance's (OEA) advice. While the cities of Sunnyvale, Mountain View, Palo Alto, and Santa Clara have the staffing resources to perform the outreach and education functions, they lack the expertise and staffing to execute day-to-day enforcement functions. Given San Jose's expertise, long-standing effective prevailing and living wage program and staff capacity, these cities have entered into agreements with San Jose whereby OEA provides administration and informal enforcement of their respective minimum wage investigations. OEA's services are provided on a 100% cost recovery rate basis. State of California The California Department of Industrial Relations/Division of Labor Standards Enforcement (DLSE) enforces all of the California labor and employment laws that establish minimum or baseline workplace conditions for workers. These include violations of state minimum wage and overtime protections as well as failure to pay commissions, vacation pay, or failure to provide meal or rest breaks. Workers can file individual claims on their own behalf for nonpayment of wages or benefits with the Labor Commissioner. The DLSE does not enforce local city or county laws that set higher minimum wage rates than the State. However, winning a DLSE hearing or a case in court does not guarantee recovery of unpaid wages. The recovery rate on DLSE claims is extremely low. 83% of workers who prevail in DLSE hearings receive no payments from their employers. There appear to be two reasons for this: 1. 60% of employers found liable for wage theft by the DLSE are no longer "active" businesses by the time of the decision - they have abandoned, transferred or sold their businesses thus avoiding any responsibility for their employment practices; and 2. Even when a business is still active, enforcement of a court or DLSE judgment or order is complex, sometimes costly and not always effective. While California has some of the strongest wage theft laws in the country, the state's enforcement efforts have not kept up. To provide the Labor Commissioner with additional tools to enforce wage theft judgments, Senate President pro Tempore Kevin de Leon in April 2015 introduced The Fair Day's Pay Act (SB 588). The additional tools include wage-bond requirements, stop-work orders and the ability to hold individual employers personally responsible for unpaid debts to workers. The bill passed in September 2015, Governor Brown signed the bill in October 2015, and it became effective January 1, It is hoped that these additional tools and adequate staffing levels will allow the Labor Commissioner's Office to meet its mission of ensuring a just day's pay in every workplace in the State and to promote economic justice through robust enforcement of labor laws.

6 May 12,2016 Page 6 Other Local Governments In order to discourage wage theft and help with the recovery of stolen wages, local governments have begun to take affirmative action to implement policies at the local level to help enforce federal and state wage laws. These policies include using contracting processes to deter wage theft and suspending certain licenses and permits of businesses found liable for wage theft. Staff has made contact with the City and County of San Francisco, the City of Los Angeles, and the County of Santa Clara to discuss their efforts to combat wage theft. Additionally, staff has reviewed efforts from the cities of Berkeley, Sacramento, and Santa Monica. The City and County of San Francisco combats wage theft through its Minimum Wage Ordinance and Minimum Compensation Ordinance. The City's Office of Labor Standards Enforcement, established in 2001, is responsible for enforcement of the City's various local labor laws: paid sick leave ordinance; health care security ordinance; family friendly workplace ordinance; fair chance ordinance; paid parental leave ordinance; formula retail employee rights ordinances; prevailing wage; health care accountability ordinance; sweatfree contracting ordinance; and displaced worker protection act. The Santa Clara County Board of Supervisors, to further its interest in ensuring that workers are fully and appropriately compensated, added a new mandatory provision specifying that the County will not permit wage theft by County contractors, and that it expects those with whom it does business to comply with all wage and hour laws. The cities of Berkeley, Sacramento, and Santa Monica have adopted minimum wage ordinances which have included provisions to deter employers from committing wage violations and provide workers protection for reporting them. Additional information, details and approaches by the City and County of San Francisco and the City of Los Angeles are found on Page 9 of this report. ANALYSIS Wage Theft Prevention Policy To further the City's already existing wage policies and interest in ensuring that workers are fully and appropriately compensated for all hours worked, staff recommends that the City Council adopt a resolution to approve a new City Council Wage Theft Prevention Policy (Attachment A). The Policy would require: (i) (ii) Potential City contractors to disclose prior wage theft judgments or final administrative orders during the bid and proposal process; City contractors to disclose wage theft judgments and final administrative orders that are issued during the term of their City contract;

7 May 12, 2016 Page 7 (iii) (iv) (v) City contractors and subcontractors to comply with all wage and hour laws; Authorization to terminate the City contract for violation of wage and hour laws; and Specifying how the City may seek denial, suspension or revocation of certain City permits and licenses for violation of wage and hour laws. City contracts involving "public works" would not be subject to the proposed Policy because monitoring and enforcement follows State prevailing wage law (CA Labor Code Sections ). Mandatory Disclosure of Prior Wage Theft Judgment or Order Currently all potential contractors who submit a bid or proposal in response to a City solicitation must complete a Bid Certification or RFP Proposal Certification. The Certification requires the name, address, telephone number, address, contact person name and title as well as the signature of the authorized representative(s). By signing the Certification, the submission of the bid or proposal is deemed a representation and certification by the bidder or proposer that they have investigated all aspects of the bid or RPP, that they are aware of the applicable facts pertaining to the bid process or RFP process, its procedures and requirements and that they have read and understand the bid or RFP. With the proposed Council Policy, an additional representation would be required of the bidder or proposer. Any bidder or proposer would be required to disclose any final court judgment or final administrative order issued within the last five (5) years from the date of the submitted bid or proposal relating to wage and hour law violations on the Bid Certification or RFP Proposal Certification. Should a bidder or proposer disclose any final court judgment or final administrative order relating to wage and hour law violations on the Certification, the City, at its sole discretion, may disqualify a potential contractor based on the disclosed violation(s). In evaluating whether to disqualify a potential contractor, the City would evaluate: (i) (ii) (iii) (iv) (v) (vi) (vii) the amount of the judgment or final administrative decision; the number of prior violations; the number of employees impacted by the prior violation; whether the judgment or final administrative decision has been fully satisfied; the size of the company and history of compliance with wage and hour laws; the impact to the City; and other factors that may be appropriate. If the City determined to disqualify a potential contractor based on the disclosed violation, the potential contractor would have due process rights.

8 May 12, 2016 Page 8 New Wage Theft Prevention Contract Provisions The proposed Council Policy would add three (3) additional contract provisions to the City's existing contract provisions. The additional provisions are italicized and bolded for ease of reference: H Make clear that contractors and subcontractors must comply with all applicable wage and hours laws; a Require contractors to inform the City if at any time before or during the contract period they are subject to any final court or agency judgment, decision or order relating to wage and hour law violations regardless whether the work at issue was performed under a contract with the City; Make failure to inform the City of such a judgment, decision or order a material breach of the contract; H Authorize the City to withhold contract payments until any judgment, decision or order regarding wage and hour violations is fully satisfied; B Require contractors to bind subcontractors to these terms so that subcontractors are similarly subject to the City's requirements; and Make a contractor's failure to comply with any of these requirements grounds for terminating the contact. The proposed Policy would also provide that any City department that receives a notice of wage theft committed by a City contractor or subcontractor to immediately notify the Office of Equality Assurance and the City Attorney's Office. The City Attorney's Office will work with the Office of Equality Assurance and relevant department(s) to determine the appropriate action to enforce the wage theft provision of the contract. Suspending and Revoking Certain Permits and Licenses As discussed earlier in this memo, wage theft occurs across all industries. While the City does a good job addressing wage theft in its City contracts, our contracts account for a very small segment of the larger picture. One way to address the larger picture is. to require employers to disclose any outstanding wages owed and judgments or orders of unpaid wages and to pay all wages due as a condition for issuance or renewal of licenses or permits. Failure to either disclose or pay all wages due would also be a basis to revoke, suspend or deny a license or permit. Some businesses require some type of city license or permit to operate in a city. For some businesses, it can be as simple as paying a tax or fee with no rules on compliance. For other industries, however, regulation is more formal and closely monitored as with liquor licenses or cardroom permits.

9 May 12,2016 Page 9 Approaches by Other Agencies The City and County of San Francisco's Minimum Wage Ordinance allows the Office of Contract Administration to request city agencies to revoke or suspend any registration certificates, permits or licenses held or requested by the employer until a wage and hour violation is remedied (San Francisco Admin. Code, Ch. 12 R). Additionally, in the City and County of San Francisco, anyone applying for a health permit must sign a "Declaration of Healthy and Safe Working Conditions." Applicants declare they understand that the business must comply with all local, state and federal labor laws in order to obtain and maintain a valid permit to operate from the Department of Health. Section of the California Retail Food Code (part of the California Health and Safety Code) states that any construction, alteration, remodeling or operation of a food facility shall be approved by the enforcement agency and shall be in accordance with all applicable local, state and federal statutes, regulations and ordinances including but not limited to fire, building and zoning codes. According to the San Francisco City Attorney, it is the declaration that the business owner signs when they apply for a health permit that provides the City and County of San Francisco's Public Health Director the ability to hold a business owner responsible for any final wage judgment(s) not satisfied and the authority to revoke a health permit as a result of any final wage judgment(s) not satisfied. In June 2015, the City of Los Angeles amended its Municipal Code to grant authority to the City of Los Angeles Police Commission to deny, revoke or suspend a police permit issued or requested by an employer found to have committed wage theft. (Ordinance No ) In Houston, Texas, occupational licenses or permits issued to any business involving the employment of unskilled or minimally-skilled laborers such as restaurants or food services, dance halls, game rooms, kennels, and similar businesses are grounds for the denial, revocation or nonrenewal for a period of five years as a result of a conviction defined in the Texas Pay Day Act or Theft of Service. City of San Jose License/Permit Typology The City of San Jose issues various licenses and permits. Attachment B provides a listing of licenses and permits issued by Department. Building and fire permits or other permits issued under technical codes are permits that are ministerial and can only be revoked based on a violation of the technical codes. Violations of the technical codes are typically the health and safety of the structure, and not the wages of the people within the permitted area. Land use permits are similar to building and fire permits. The permit is focused on the uses of the land, and there is no connection between the permitted land use and the wages of the people on the site.

10 May 12, 2016 Page 10 The City issues a certificate when a business pays its San Jose Business License Tax. The certificate is a receipt for paying the tax. It is not a license. The San Jose Business License Tax does not give anyone license to do business in the City of San Jose. Rather, San Jose Municipal Code Section states that it is "solely to raise revenues for municipal purposes and is not intended for regulation. " There are no regulatory provisions included. It is unfortunate that the word "license" is even used as it suggests that it is something more than just a tax. Any certificate given to a business is merely a receipt for paying the tax, and not a license. The Finance Department is currently working on Municipal Code revisions related to Council's direction earlier this year to develop a proposal to modernize and increase the business tax with a City-initiated ballot measure for November Among the revisions, the word "license" will be removed from the name of the tax to eliminate any unnecessary confusion that the levy and collection of the tax implies a regulatory component. Title 6 Permit Focus For the reasons cited above within the existing municipal code provisions, staff focused on Title 6 Permits because these permits are necessary for the operation of certain businesses within the city, are related to the employment of persons and fall within the City's police power. Title 6 Permits include 37 types of business activities including automobile dismantlers, auto body repair shops, gasoline service stations, junk dealers, massage, patrol services, pool and billiards and off-sale alcoholic beverage to name a few. Attachment C provides a listing of Title 6 Permits. Under the current Municipal Code, an application for a Title 6 Permit or License may be denied and a permit or license may be suspended or revoked for 14 grounds. A few of the grounds include: Conviction of a crime if the crime is substantially related to the qualifications, functions or duties of the business for which the permit or license was issued; Conviction of a felony within the previous five years; Conviction for commission of acts involving dishonesty, fraud or deceit;. Knowingly making a false statement of fact or omitting a fact required to be revealed in an application;. Licensee or permittee has conducted the licensed or permitted business in a manner that creates or result in a public nuisance Staff recommends adding another ground for denial, suspension or revocation - the violation of applicable wage and hour laws found by a court or by final administrative action of an investigatory government agency that has not been satisfied.

11 May 12,2016 Page 11 The potential denial, suspension or revocation would occur in the following manner: (1) the application for a Title 6 Permit or License would include the requirement to disclose any prior court judgment or final administrative order issued relating to wage and hour law violations within the last five (5) years; or (2) a worker who has filed a claim and subsequently received a court judgment or final administrative order relating to a wage and hour violation that has not been satisfied would make contact with OEA. In both instances, OEA would work with the City Attorney's Office and the Police Department to determine denial, suspension of revocation of the permit or license until the wage judgment is satisfied. EVALUATION AND FOLLOW-UP At this time, no additional resources are needed for OEA. OEA will closely monitor and if additional workload created by the new Policy and ordinance amendments cannot be absorbed with existing staff, we will return with a request for additional resources. OEA will continue to monitor developments relating to wage theft including the effectiveness of SB 588 and incorporate any additional applicable tools into its current processes or bring forward any additional recommendations as appropriate. OEA will continue to coordinate efforts with the Santa Clara County Wage Theft Coalition to encourage workers who are victims of wage theft to come forward and file complaints with the City. OEA will continue to work with Santa Clara County staff to determine ways to assist with outstanding wage judgments in the restaurant and fast food industry sector since they are permitted and controlled by the County Health Department and not the City of San Jose. City staff would like to see the Santa Clara County Health Department take steps similar to the City and County of San Francisco's Department of Public Health. POLICY ALTERNATIVES Alternative#!: Regulatory Business Registration Ordinance There is nothing currently in the San Jose Municipal Code requiring the regulation of any and all businesses in San Jose. Council could direct staff to prepare a regulatory business registration ordinance. It would be completely unrelated to the business tax section. Pros: The City would have the ability to regulate any and all businesses. Cons: If the City Council wishes to pursue a regulatory business registration ordinance, it would require considerable staff time to research and draft an ordinance as well as require the creation of a new business registration unit or division within the City to implement and administer the ordinance and implementation of a new fee to cover the cost of administering the program.

12 May 12,2016 Page 12 Staff does not recommend a regulatory business registration ordinance at the present time. Staff believes the proposed Council Policy is a step in the right direction and is consistent with other public agencies' efforts. PUBLIC OUTREACH This memorandum will be posted on the City's Council Agenda website for the May 24, 2016 City Council Meeting. Staff met with the Santa Clara County Wage Theft Coalition and made contact with the San Jose Silicon Valley Chamber of Commerce and Santa Clara & San Benito Counties Building & Construction Trades Council. COORDINATION This memorandum has been coordinated with the Finance Department, the Police Department and the City Attorney's Office. CEOA Not a Project, File No. PP10-068(b), Municipal Code or Policy Change. fsi BARRY NG Director of Public Works For questions, please contact Nina Grayson, Division Manager, Public Works Department at (408)

13 City of San Jose, California ATTACHMENT A COUNCIL POLICY TITLE WAGE THEFT PREVENTION POLICY PAGE 1 of 5 POLICY NUMBER 0-44 EFFECTIVE DATE July 1, 2016 REVISED DATE APPROVED BY COUNCIL ACTION [Click HERE and type Council Approval Actions] BACKGROUND Wage theft occurs when an employer fails to pay its workers the wages to which they are legally entitled. It is the crime of stealing earned wages from workers. There are numerous forms of wage theft involving violations of employment laws but all resulting in workers earning less than they are entitled to earn. Local and national studies on wage theft report that wage theft is a pervasive and chronic problem. Wage theft is not incidental, aberrant, rare or committed only by a few rogue employers at the periphery of the labor market. Instead it takes place in industries that span the economy - from retail, restaurants and grocery stores; caregiver industries; manufacturing, construction and wholesalers; building services such as janitorial and security; and personal services such as dry cleaning and laundry, car washes and beauty and nail salons. At the June 23, 2015 City Council Priority Setting Session, the issue of wage theft and how to combat it was deemed to be the Council's highest priority. Staff was directed to analyze various policy options to combat wage theft. PURPOSE To establish a Council Policy and procedure to prevent wage theft on City contracts as well as deny, suspend or revoke certain City permits and licenses to businesses with unpaid wage theft judgments. POLICY It is the policy of the City of San Jose that all parties contracting with the City must comply with all applicable federal, state and local wage and hour laws including but not limited to the Federal Fair Labor Standards Act ("FSLA"), the California Labor Code and the San Jose Minimum Wage Ordinance. A potential contractor that has submitted a formal or informal bid or proposal to provide supplies, materials, goods and/or services to the City pursuant to San Jose Municipal Code Chapter 4.12 may be disqualified if the potential contractor has been found, by a court or by final administrative action of an

14 City of San Jose, California TITLE Open Data Policy PAGE POLICY NUMBER 2 of investigatory government agency, to have violated applicable wage and hour laws in the past five (5) years prior to the date of submission of a bid or proposal to provide supplies, materials, goods and/or services. A current contractor found by a court or by final administrative action of an investigatory government agency to have violated applicable wage and hour laws, in the five (5) years prior to or during the term of the contract with the City, may be in material breach of its contract with the City if the violation is not fully disclosed and/or satisfied per City contract requirements. Such breach may serve as a basis for contract termination and/or any other remedies available under law, including a stipulated remediation plan. This Policy does not apply to any "public works" contracts as defined in City Charter Section PROCEDURE I. MANDATORY DISCLOSURE REQUIREMENT As a part of any City solicitation for supplies, materials, goods and/or services, a potential contractor shall fully complete a "Bid Certification" ("Certification") in substantially the same form as the attached Attachment A. The Certification requires each potential contractor to disclose whether the contractor has been found by a court or final administrative action of an investigatory government agency to have violated federal, state or local wage and hour laws within the past five (5) years from the date of the submitted bid or proposal. For each disclosed violation, the potential contractor shall provide a copy of (i) the court order and judgment and/or final administrative decision; and (ii) documents demonstrating either that the order/judgment has been satisfied, or if the order/judgment has not been fully satisfied, a written and signed description of potential contractor's efforts to date to satisfy the order/judgment. The completed Certification shall be submitted by the potential contractor to the City as a part of its bid or proposal. The City, at its sole discretion, may disqualify a potential contractor based on the disclosed violation. In evaluating whether to disqualify a potential contractor, the City should evaluate (i) the amount of the judgment or final administrative decision; (ii) the number of prior violations; (iii) the number of employees impacted by the prior violations; (iv) whether the judgment or final administrative decision has been fully satisfied; (v) the size of the company and history of compliance with wage and hour laws; and (vi) the impact to the City; and (vii) other factors that may be appropriate. T / 13Q8688_1 Council Agenda: Item No.: DRAFT Contact the Office of the City Clerk at (408) or CityClerk@sanjoseca.gov for final document.

15 City of San Jose, California TITLE Open Data Policy PAGE POLICY NUMBER 3 of Inaccurate or incomplete disclosures constitute a violation of the City's Wage Theft Prevention Policy and may result in immediate disqualification from the City solicitation and contracting process or immediate termination of any contract with the City. II. CONTRACT LANGUAGE AFTER SUCCESSFUL BID OR PROPOSAL All City contracts subject to this Policy shall include the following provisions: "Wage Theft Prevention Compliance with Wage and Hour Laws: Contractor, and any subcontractor it employs to complete work under this Agreement, shall comply with all applicable federal, state and local wage and hour laws. Applicable laws may include, but are not limited to, the Federal Fair Labor Standards Act, the California Labor Code, the San Jose Living Wage Policy, the San Jose Prevailing Wage Policy, and the San Jose Minimum Wage Ordinance. Final Judgments, Decisions and Orders: For purposes of this Section, a "final judgment, decision or order" refers to one for which all appeals have been exhausted or the time period to appeal has expired. Relevant investigatory government agencies include: the federal Department of Labor, the California Division of Labor Standards Enforcement, the City of San Jose Office of Equality Assurance, or any other governmental entity or division tasked with the investigation and enforcement of wage and hour laws. Prior Judgments against Contractor and/or its Subcontractors: BY SIGNING THIS AGREEMENT, CONTRACTOR AFFIRMS THAT IT HAS DISCLOSED ANY FINAL JUDGMENTS, DECISIONS OR ORDERS FROM A COURT OR INVESTIGATORY GOVERNMENT AGENCY FINDING - IN THE FIVE (5) YEARS PRIOR TO EXECUTING THIS AGREEMENT - THAT CONTRACTOR OR ITS SUCONTRACTORS(S) HAS VIOLATED ANY APPLICABLE WAGE AND HOUR LAWS. CONTRACTOR FURTHER AFFIMS THAT IT OR ITS SUBCONTRACTOR(S) HAS SATISFIED AND COMPLIED WITH - OR HAS REACHED AGREEMENT WITH THE CITY REGARDING THE MANNER IN WHICH IT WILL SATISFY - ANY SUCH JUDGMENTS, DECISIONS OR ORDERS., Judgments or Decisions During Term of Contract: If at any time during the term of this Agreement, a court or investigatory government agency issues a final judgment, T-29404/ J Council Agenda: Item No.: DRAFT-Contact the Office of the City Clerk at (408) or CityClerk@sanjoseca.gov for final document.

16 City of San Jose, California TITLE Open Data Policy PAGE POLICY NUMBER 4 of decision or order finding that Contractor or an subcontractor it employs to perform work under this Agreement has violated any applicable wage and hour law, or Contractor learns of such a judgment, decision, or order that was not previously disclosed, Contractor shall inform the Office of Equality Assurance, no more than fifteen (15) days after the judgment, decision or order becomes final or of learning of the final judgment, decision or order. Contractor and its subcontractors shall promptly satisfy and comply with any such judgment, decision, or order, and shall provide the City's Office of Equality Assurance with documentary evidence of compliance with the final judgment, decision or order within five (5) days of satisfying the final judgment, decision or order. The City reserves the right to require Contractor to enter into an agreement with the City regarding the manner in which any such final judgment, decision or order will be satisfied. City's Right to Withhold Payment: Where Contractor or any subcontractor it employs to perform work under this Agreement has been found in violation of any applicable wage and hour law by a final judgment, decision or order of a court or government agency, the City reserves the right to withhold payment to Contractor until such judgment, decision or order has been satisfied in full. Material Breach: Failure to comply with any part of this Section constitutes a material breach of this Agreement. Such breach may serve as a basis for immediate termination of this Agreement and/or any other remedies available under this Agreement and/or law. Notice to City Related to Wage Theft Prevention: Notice provided to the City's Office of Equality Assurance as required under this Section shall be addressed to: Office of Equality Assurance, 200 East Santa Clara Street, 5 th Floor, San Jose, CA The Notice provisions of this Section are separate from any other notice provisions in this Agreement and, accordingly, only notice provided to the above address satisfies the notice requirements in this Section." In the event the contractor or subcontractor is in violation of the contract provisions above, the City should weigh the same factors set forth in Section 1 of this Policy to determine whether the City should terminate the contract or pursue some other remedy. III. REVOCATION OF PERMITS, LICENSES AND REGISTRATIONS Add an additional ground to Title to deny, suspend or revoke a permit or license for permits issued under Title 6. The additional ground shall be for the failure to T / _1 Council Agenda: item No.: DRAFT-Contact the Office of the City Clerk at (408) or CityClerk@sanjoseca.gov for final document.

17 City of San Jose, California TITLE Open Data Policy PAGE POLICY NUMBER 5 of pay a court or final administrative action of an investigatory government agency for violating applicable wage and hours laws. If the City receives complaints about Title 6 permittees regarding wage theft, the Office of Equality Assurance shall work with the City Attorney's Office and the department responsible for issuance of the permit or license to investigate the complaint to determine denial, suspension or revocation of the permit or license until the wage judgment is satisfied. T-29404/ J Council Agenda: Item No.: DRAFT Contact the Office of the City Clerk at (408) or CityClerk@sanjoseca.gov for final document.

18 CITY ISSUED LICENSES AND PERMITS Office of Economic Development Foreign Trade Zone application Paseo/Plaza Use Permit * Private Party Event Permit Finance B Carnival Permit Circus Permit Commercial Distributor Permit Handbill Distributors License Handbill Permit to distribute flyers, books etc Christmas Tree/Pumpkin Sales Lot License Fire Engineering Installation, Removal or Alteration Permits Hazmat Installation, Removal or Alteration Permits Fire Safety Permits Hazardous Materials Permits Inert Gas Permit Propane Permit Parks, Recreation and Neighborhood Services Park Permits Planning, Building and Code Enforcement Building Permits Electrical Permits Mechanical Permits Plumbing Permits Temporary Certificate of Occupancy Auto Body Repair Shop Permit. Auto Body, Repair and Dismantler Facility Re-Inspection Permit Automobile Dismantler Permit Multiple Housing Program Permits (Triplex and above) Off-Sale Alcohol Permit Tobacco Retail Permit Multiple Housing Permit. Annexations Conditional Use Permits (CUPs)

19 Conventional Prezonings/Rezonings General Plan Amendments Liquor License Exception Permit Administrative Permit Historic Preservation Permit Single Family House Permit Site Development Permit Special Use Permit Tree Removal Permit Police Public Safety Permits Exhibitor Permit Location Permit Amusement Operator Permit Bingo Permit Cardroom License Cardroom Permit Cardroom Work Permit Event Promoter Permit Funeral Escort Operator Permit Funeral Escort Vehicle Inspection Permit Gaming Permit Registration - Non-profit fundraisers Ice Cream Vendor Permit Massage Parlor Business Permit Massage Parlor Ownership/Management License Miscellaneous Permits Media Production Permit Parade Permit * Pawnbroker/Secondhand Dealers License Peddler Location Permit Peddler Mobile Permit Peep Show Establishment Application Periodicals Canvasser Permit Pool/Billiard Room License Public Dance Hall Permit Public Entertainment Business Permit Public Entertainment Management License Public Entertainment Ownership License Sales Permit/Closing Out Business Sales Permit Secondary Employment Permit

20 Street Closing Permits Block Party Temporary Street Closing Taxicabs Owners License Taxicab Drivers Permit Tow Car Business Permit Tow Car Driver Permit Public Works Animal Event Permit Animal Permits Animal Facilities - private and non-private kennels Beekeeping Dangerous Animal Dangerous Dog * Keeping of Animals, Fowl or Livestock Animal Licenses Development Permit related to public improvement plans and grading pla Planned Development Permits Site Development Permit Geologic Grading Permit * Encroachment Permit Private Utility Permit Inter-Agency Encroachment Permit Transportation Clean Air Vehicle Permit Freight Loading Zone Permit Residential Parking Permit

21 ATTACHMENT C TITLE 6 PERMITS AND LICENSES Amusement Devices Automobile Sales Yards Automobile Dismantles Auto Body Repair Shops Bingo Business Sales Canvassers or Periodicals Christmas Tree Sales Circuses and Carnivals Cleaning and Dyeing Gasoline Service Stations, Handbill Distributors Hotel Registration Ice Cream Truck Permits iunk Dealers Massage Mobilehomes and Mobilehome Parks Patrol Services and In-House Security Programs Pawnbrokers and Secondhand Dealers Peddler Permit Downtown Special Events Pool and Billiards Public Dancehalls Public Entertainment Permit Event Promoters Taxicab and Limousine Service Tow-Car Business Used Automobile Dealers Vending Machines Regulation of Display or Reading Materia! Regulation of Spray Paint Containers and Marker Pens Peep Show Establishments Beverage Services Businesses Alcoholic Beverage Control License Off-Sale Alcoholic Beverage Establishments Tobacco Retail License Medical Marijuana