Nonprofit CAN Gets Living Wage Exemption

For the next three years, the Community Action Network (CAN) will not have to pay its workers at the level required by the city of Ann Arbor’s living wage ordinance.

CAN is a nonprofit dedicated to improving communities in underprivileged Washtenaw County neighborhoods, and receives allocations from the city through the city’s coordinated funding process to support human services. For fiscal year 2013, CAN was allocated $105,809 by the city for its Y.E.S. You CAN! program. Because those annual allocations exceed $10,000, CAN is subject to the city’s living wage ordinance, which currently requires that a minimum of $12.17/hour be paid to employees by employers who provide health insurance and $13.57/hour by those employers not providing health insurance.

However, Ann Arbor’s living wage ordinance has a mechanism by which the minimum requirements can be waived – if conformance would cause economic harm to a nonprofit. And it’s that waiver provision that the Ann Arbor city council used in granting CAN a living wage exemption at its Nov. 8, 2012 meeting. The vote was 8-2 with dissent from mayor John Hieftje and Carsten Hohnke (Ward 5).

One condition of the waiver is that a plan for eventual compliance within three years must be submitted to the city. CAN’s plan highlights the programs that it would need to cut, in order to conform with the ordinance. [.pdf of CAN's compliance plan]

Jane Lumm (Ward 2) also announced at the Nov. 8 meeting that in the near future she would be bringing forward an ordinance revision to exempt nonprofits from the living wage ordinance permanently. That echos a previous attempt two months ago by the council to exempt some nonprofits from the living wage ordinance. On the council’s agenda for Sept. 17, 2012 had been a resolution that would have exempted from the living wage ordinance those nonprofits receiving city human services funding.

That appeared to be an attempt to invoke the ordinance’s waiver provision, but it did not name a specific nonprofit and no plans for eventual conformance had been submitted by any nonprofits at that time. So the agenda item was withdrawn as it was deemed to be tantamount to changing an ordinance through a simple council resolution – which is not a legal way to proceed. At that time it was indicated that an ordinance revision would be forthcoming.

The Sept. 17 agenda item appears to have targeted CAN, although that organization was not specifically mentioned in the council’s resolution or in discussion at the table. Email correspondence sent in February 2012 by CAN director Joan Doughty to the city/county office of community development Mary Jo Callan and councilmember Christopher Taylor (Ward 3) made a plea for some kind of accommodation with respect to the living wage ordinance: “We’re going to be hurting, and paying summer camp counselors living wage is sort of ridiculous. The city doesn’t do it either. …. so …. Please? I’m begging you – do something!”

At the Nov. 8 meeting Lumm indicated that CAN’s city funding has been withheld pending resolution of this issue. Doughty said at the meeting that many other nonprofits don’t meet the conditions of the living wage ordinance, but there is no enforcement. But that’s not the way that CAN conducts its business, she said. They wanted to pursue the waiver option to do it the right way.

Doughty’s correspondence in the summer of 2012 – provided by the city to The Chronicle in the context of a broader request made under Michigan’s Freedom of Information Act – also mentions the fact that the city’s ordinance is likely on dubious legal grounds. As The Chronicle has previously reported, a Michigan Supreme Court order from April 7, 2010 left in place an unpublished court of appeals opinion that found a Detroit living wage law to be unenforceable. Doughty appears to indicate in her correspondence that city attorney Stephen Postema had related in conversation with Doughty’s husband, Washtenaw County prosecutor Brian Mackie, that Postema felt if the city’s living wage ordinance were to be challenged in court, it would be struck down.

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]