REPORT TO COUNCIL
SUBJECT
Title
Consider Adopting an Emergency Ordinance Temporarily Suspending the January 1, 2021 Local Minimum Wage Increase Due to the COVID-19 Pandemic
Report
BACKGROUND
On October 28, 2014, Council adopted Sunnyvale Municipal Code Chapter 3.80 as a local Minimum Wage Ordinance (Ordinance) to increase the hourly minimum wage to $10.30 with annual Consumer Price Index (CPI) increases. On April 21, 2016, Council amended the Ordinance by changing the CPI from the U.S. city average to the Bay Area average. Sunnyvale’s minimum wage rate has increased as described below:
• $13.00 per hour on January 1, 2017
• $15.00 per hour on January 1, 2018
• $15.65 per hour on January 1, 2019
• $16.05 per hour on January 1, 2020
Based on the 2020 annual CPI increase, the minimum wage will increase to $16.30 per hour on January 1, 2021. At the City Council meeting of December 8, 2020, Council passed a motion and directed staff to bring back an ordinance to temporarily delay the increase scheduled for January 1, 2021 until the local emergency order regarding the COVID-19 pandemic is terminated. To fulfill the motion, Council needs to adopt an emergency ordinance (Attachment 1) to temporarily delay the minimum wage increase scheduled for January 1, 2021.
EXISTING POLICY
Section 3.80.040 of the Sunnyvale Municipal Code, entitled “Minimum Wage.”
CHARTER OF THE CITY OF SUNNYVALE, Article VII Ordinances and Legal Notices
Section 701 - Emergency Ordinances
Any ordinance declared by the City Council to be necessary as an emergency measure for preserving the public peace, health or safety, and containing a statement of the reasons for its urgency, may be introduced and adopted at one and the same meeting if passed by at least five affirmative votes.
ENVIRONMENTAL REVIEW
Adoption of this emergency ordinance does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines Section 15061(b)(3) as the activity is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA.
DISCUSSION
During the December 8, 2020 Council meeting, the Sunnyvale Downtown Association, the Sunnyvale Silicon Valley Chamber of Commerce, and several businesses asked Council to temporarily suspend the minimum wage increase scheduled to take effect on January 1, 2021. The speakers stated that Sunnyvale businesses have been severely impacted by the global COVID-19 pandemic. The speakers also stated that the most recent Stay-at-Home Order issued by Santa Clara County on December 6, 2020, bans outdoor dining and operation of personal services businesses. The speakers are concerned that an increase in the minimum wage will result in job losses and business closures due to increased expenses.
A few people spoke or wrote letters in support of maintaining the minimum wage increase. Supporters said that while they understand the businesses’ position, the employees need the minimum wage increase in order to remain housed with food on their tables.
In addition to responding to numerous calls regarding the minimum wage increase, staff also took the following actions to announce the minimum wage to businesses, employees, and the community:
• Notified Councilmembers of 2021 Minimum Wage rate of $16.30 per hour in mid-October
• Posted new rate on the City’s website in late October
• Notified business associations (Chamber, SDA, ethnic chambers, etc.) in late October
• Posted updated legal posters on the City’s website on November 16
• Mailed postcards to about 11,600 businesses in mid-November (at a cost of about $6,000)
• Contacted other cities to ask if they were pausing minimum wage increases-as of end of November, no other City is pausing increases
• Issued a press release on December 1-new rate was reported by KRON news
• Updated business renewal forms to announce new rate-5,200 forms were emailed.
If Council chooses to temporarily suspend the minimum wage increase, staff will have to notify all businesses and employees by redoing several of the items listed above. In addition, after the local emergency order is terminated staff will have to again redo all the items listed above to notify the businesses and community of the wage increase.
FISCAL IMPACT
City staff spent about 80 hours and incurred about $6,500 in expenses notifying businesses of the wage increase. Staff expects it will take about 120 hours additional hours and an additional $6,500 to notify businesses of the pause and of the increase once the local emergency order is terminated.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City's official-notice bulletin board outside City Hall, Sunnyvale Public Library and Department of Public Safety. In addition, the agenda and report are available at the Office of the City Clerk and on the City's website.
ALTERNATIVES
1. Adopt an Emergency Ordinance to Temporarily Suspend the January 1, 2021 Local Minimum Wage Increase due to the COVID-19 Pandemic.
2. Other action as directed by Council
STAFF RECOMMENDATION
Recommendation
Staff makes no recommendation. Council directed staff to put forward an emergency ordinance for Council consideration to temporarily suspend the January 1, 2021 Local Minimum Wage Increase due to the COVID-19 Pandemic. Staff followed Council’s direction and prepared the emergency ordinance accordingly.
Staff
Prepared by: Connie Verceles, Assistant to the City Manager/Economic Development
Reviewed by: Teri Silva, Assistant City Manager
Approved by: Kent Steffens, City Manager
ATTACHMENTS
1. Proposed Ordinance