Living Wage Exemption for Nonprofits Postponed

Several amendments to Ann Arbor’s living wage ordinance were postponed for three months by the city council at its Nov. 19, 2012 meeting. The main proposed changes to the law – which sets a minimum wage of $12.17/hour for those employers providing health insurance and $13.57/hour for those not providing health insurance – would exempt from the minimum wage requirements those nonprofits that receive funding from the city for human services work.

Consideration of the changes to the ordinance was postponed until the second council meeting in February 2013 and referred to the city’s Housing and Human Services Advisory Board for more study in the meantime.

The current law applies to companies that have contracts with the city for more than $10,000 in a given calendar year, and that employ five or more people (10 or more for nonprofits). The current law also provides an exemption for organizations funded from the city’s community events budget – an exemption put in place to accommodate the Ann Arbor Summer Festival’s practice of paying its temporary employees less than the living wage and the city’s desire to fund the festival at a higher level.

Among the other amendments to the living wage postponed on Nov. 19 is an increase from $10,000 to $25,000 for the amount of a contract triggering the application of the ordinance. The timeframe would also change from a calendar year to one fiscal year. Also included in the proposed amendments is one that would allow the city administrator to grant a waiver from compliance with the ordinance, instead of requiring the approval of the city council.

At its meeting on Nov. 8, 2012, the council had granted such a waiver to the Community Action Network, which receives funding from the city to do human services work.

The city’s ordinance is likely on dubious legal grounds. A Michigan Supreme Court order from April 7, 2010 left in place an unpublished court of appeals opinion that found a Detroit living wage law to be unenforceable.

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]