Ann Arbor Mulls No Living Wage for Nonprofits

Nonprofits that receive funding from the city of Ann Arbor to provide human services may in the future not be required to adhere to the city’s living wage ordinance. However, a resolution related to that issue was withdrawn from the city council’s Sept. 17, 2012 agenda, pending further review by the city’s housing and human services advisory board.

It’s expected that a recommended ordinance change will be brought to a future council meeting.

The living wage is defined by city ordinance Chapter 23, Section 1:815, and was increased slightly earlier this year in order to conform with the ordinance. The new wage was set at $12.17/hour for those employers paying health insurance and $13.57/hour for those employers not paying health insurance.

The city ordinance applies to the wages that must be paid by companies that have contracts with the city worth more than $10,000. Passed in 2001, the ordinance initially stipulated in that year that workers of vendors holding contracts with the city had to pay their employees a minimum of $8.70/hour if the contractor provided employee health care and $10.20/hour if not. But the ordinance provides a mechanism for increasing the living wage based on federal poverty guidelines.

The resolution originally on the Sept. 17 agenda was an apparent attempt to invoke an exemption provided in the ordinance that allows the city council to grant an exemption from the wage requirements, if the city council determines that “the application of this Chapter would cause demonstrated economic harm to an otherwise covered employer that is a non-profit organization, and the City Council finds that said harm outweighs the benefits of this Chapter; provided further that the otherwise covered non-profit employer shall provide a written plan to fully comply with this Chapter within a reasonable period of time, not to exceed three years, and the City Council then agrees that granting a partial or complete exemption is necessary to ameliorate the harm and permit the non-profit organization sufficient time to reach full compliance with this Chapter.”

However, the city council’s agenda item did not name any specific nonprofit employer or provide any written plans submitted by nonprofits for eventual compliance with the ordinance. It appears that the resolution would have amounted to an attempt to change the city ordinance through a simple resolution, which is not a legal way to proceed.

In any case, Ann Arbor’s living wage ordinance does not appear to be consistent with the most recent case law in Michigan. A Michigan Supreme Court order from April 7, 2010 affirmed an unpublished court of appeals opinion that found a Detroit living wage law to be unenforceable.

This brief was filed from the city council’s chambers on the second floor of city hall, located at 301 E. Huron. A more detailed report will follow: [link]