San Francisco Living Wage Laws and Other Issues Affecting Low-wage Workers.


The living wage laws (the Minimum Compensation Ordinance and Health care Accountability Ordinance) require that businesses with a service contract with the City or property lease at the Airport pay workers at least $17 per hour, rising to $17.66 per hour on July 1, 2019. Non-profit service contractors and public entities such as In-Home Supportive Services (IHSS) must pay $16.50 per hour as of July 1. Covered employers also must provide 12 paid days off per year and health care coverage. Businesses with other City-owned property leases must provide health care coverage as a condition of their lease. The MCO rate has historically been $1.75 to $2 per hour higher than the minimum wage. The reasons are twofold. The City does not want to contract with employers that are paying poverty wages, which may lead their employees to rely on public benefits. And, higher-paid employees will provide better services to the City, as employers reduce turn-over and retain experienced employees. The City should expect that businesses that receive our tax dollars or use of airport property should pay a higher wage than the minimum wage.

The wage rate of the Minimum Compensation Ordinance will be adjusted each July 1, starting in 2020, according to the rate of inflation.

A lower wage for tipped employees should not be implemented because of its negative effects. It has been proven that the abolishment of the “tip credit” (a “subminimum wage” for workers who customarily and regularly receive tips) reduces the poverty rate among tipped workers. Furthermore, it is likely that it could benefit businesses not only by increasing productivity and cutting turnover, but also because workers who receive a higher wage have more money to spend in the local economy. A subminimum wage also encourages abuse and sexual harassment because tipped workers have to please clients since their livelihood depends on their tips. This is particularly important for women in the restaurant industry, who are disproportionately represented in occupations where tips make up a large share of earnings, namely table attendants and bartenders.

There should not be a two-tier wage structure that makes non-profit workers second-class citizens. This fuels income inequality and particularly impacts women and people of color.

The Minimum Compensation Ordinance states that it should be city policy that non-profit organizations be provided adequate funding so that they can increase wages without reducing services or laying-off staff. Department heads are required to issue a written statement that they took into consideration when calculating their budgets increased costs from raising wages.

The City should bring up the wage rate of workers at city-funded non-profit contractors to the same wage rate as workers at for-profit businesses with city contracts. The City should pass through sufficient funding in the city budget to cover the increased wage costs.

Currently, the Minimum Compensation Ordinance does not include workers on other City property besides the Airport, such as the Port, Fisherman’s Wharf, Pier 39, AT&T Park, Moscone Convention Center, Bill Graham Auditorium, Golden Gate Park, Park and Recreation lands, city-owned golf courses and city-owned buildings. Nevertheless, most of those City properties are prime locations. For example, Fisherman’s Wharf is the first visitor destination in San Francisco, which means that the companies make a greater profit due to the large number of tourists during the year. However, the workers do not benefit from this situation because they are not eligible for the Minimum Compensation Ordinance wage rate. Therefore, for them, it is more difficult to be self-sufficient in a City where the cost-of-living is higher than ever.

In order to give an opportunity to these workers to be treated like similarly situated workers on City property at the airport, the Minimum Compensation Ordinance should be expanded to all workers on the City properties mentioned above.

In October, 2018, the Board of Supervisors removed the provision that the Minimum Compensation Ordinance only covered employees who work on a city service contract a minimum of four hours per week in San Francisco or 10 hours per week outside the city limits. Because of this loophole, unscrupulous employers were spreading the city work among enough workers in order to be exempt from the MCO. Since they were not required to report such workers, employer could evade the law and pay them lower than MCO wages. Since the hour threshold was in the definitions part of the ordinance, companies did not even have to request a waiver or exemption from the Office of Labor Standards Enforcement. OLSE did not know how many companies were not paying the MCO wage by claiming their employees worked less than the hour threshold under the ordinance.

Thus, in order to prevent contractors from depriving workers of MCO wages, the Board of Supervisors changed the MCO to state that it covers anyone who works on a city service contract at all for any length of time. If a worker is doing any work on a city service contract, that worker should be paid a living wage. This improves the quality of life for more workers.

In FY 2010, there were more than 500 CalWORKS participants in the Community Jobs Program (CJP). The reason for this expansion was the passage of the American Recovery and Reinvestment Act (ARRA) in 2009, which provided $5 billion for payment into the TANF Emergency Contingency Fund, which counties could then use for subsidized employment programs. Participation numbers then waned in FY 2011 when ARRA funds were no longer available. But it showed that a lot of welfare recipients are interested in this program when they have the opportunity to be a part of it. Funding is available but it is a matter of making this program effective and then prioritizing it in funding over programs that are less effective. That is why we are calling for improving…and expanding the Community Jobs Program.

Increasing the number of CJP entrants is needed. A total of 850 participants would give the program the figure to accurately measure the true effectiveness of the program, as well as giving opportunities for welfare recipients to transition into self-sufficiency. The 850 participants would be made up of 600 CalWORKs beneficiaries, and 250 CAAP participants.

Currently, the time limit of six months in the CJP is not enough to give welfare-to-work program participants the work experience and the training required to compete for a civil service job. Many entry-level city jobs require one-year of related experience. The goal of the program should be that participants would meet the “minimum qualifications,” the requirements, of entry-level civil service positions. As it stands, CJP participants are completing the program with less than half of the necessary experience they need for qualifying for entry-level city jobs.

Extending the time limit in the CJP to one year would better help participants achieve unsubsidized employment. Extending the time limit to one year is necessary to improve the chances of a successful transition to long-term employment. A person cannot learn all the needed skills in a mere six months. A longer period of time also helps stabilize the financial situation of the participants so that they have some constancy in their daily life, and are in a more relaxed and confident mental and emotional state in the hiring process seeking long-term employment.

Historically, many welfare-to-work program participants performed municipal work, but have been denied the opportunity to qualify for available entry-level civil service jobs, even when those jobs are analogous to the work that they did. The CJP was originally intended as an on-the-job training program in order to meet requirements for entry-level city jobs, but no effective effort was made to match job descriptions on the program placements and the minimum related experience required for City jobs. The intended original goal of the program giving welfare recipients the work experience and training needed to compete for city jobs, as well as non-public-sector jobs, cannot be achieved because there is not a recognized connection between the program training and targeted city jobs.

The Department of Human Resources needs to work with the Human Service Agency to match the experience in non-public-sector community-service jobs with the minimum qualifications of entry-level city jobs, so that the CJP would be a pipeline to available city jobs. Tailoring the CJP jobs to the minimum qualifications for civil service employment obviously would not guarantee any CJP participant a city job, but it would make CJP participants eligible to apply for city jobs and thus open up opportunities for living wage employment that have previously been unavailable to most welfare recipients.

Currently, the Health Care Accountability Ordinance applies to City contractors and subcontractors and tenants and subtenants on City property, such as those at the San Francisco International Airport and the Port of San Francisco. It requires employers to offer health plan benefits to their covered employees, to make payments to the City for use by the Department of Public Health, or, under limited circumstances, to make payments directly to their covered employees. Under the minimum standards for insurance coverage under the ordinance, workers do not have to pay a monthly premium. However, the ordinance does not take into account the health care needs of the employee’s family, which tend to squeeze even more from their income.

Thus, in order that workers are self-sufficient and able to sustain their family, the Health Care Accountability Ordinance should be extended to dependents, spouses and domestic partners of employees. Moreover, this extension has to be done in a way that it does not change the current standard that a worker does not pay a monthly premium for individual coverage.

For-profit businesses contracting with the City are able to afford the additional health care costs from the lucrative profits they are making from the City’s tax dollars. However, non-profit service contractors need more funding in order to provide family health care coverage. Once again, workers in non-profit organizations should benefit at the same level as the workers at for-profit service contractors from the Health Care Accountability Ordinance. Therefore, the City should fund a pass-through of increased costs to non-profits.

As right-wing forces intensify their attacks on unions, it is critically important that progressive cities support the labor movement in sustaining workers and their families.

Those very right wing forces are operating in San Francisco now against the Building and Construction Trades Council’s proposal on PLAs. They do so in the guise of small local contractors who claim that PLAs will exclude them from City work. These national anti-union organizations, such as the Associated Builders and Contractors and the Coalition for Fair Employment in Construction, have presented to the City Administrator’s Small Business Advisory Committee at meetings that unions were never informed of, and with agendas that were not made public until after the meetings had already occurred.

The Building and Construction Trades Council requested from the City a list of specific obstacles that small local contractors would face under PLAs, and the City still has yet to provide one because such a list is impossible. Under PLAs, workers will thrive because the oversight of unions and union stewards would ensure correct payment of wages and more contractors will abstain from cheating. Workers who do not receive health benefits for themselves or their families would now have the chance to obtain healthcare coverage, whether or not they are union members. Workers facing the prospect of poverty in old age would now be able to obtain well-deserved retirement pensions.

Many apprentices from underprivileged communities, such as the formerly incarcerated, women, and veterans, whom the Building Trades take into their apprenticeships every year from CityBuild Academy will be assured that City work can be a suitable career, where they can flourish.


For the November 3, 2020, election, the San Francisco Living Wage Coalition issued a living wage voter guide on supervisorial candidates. The Coalition mailed a questionnaire to each candidate regarding their positions on issues that impact low-wage workers. The questionnaire tested the knowledge of candidates on San Francisco’s living wage laws and on job training programs for parents in the welfare-to-work transition. By the deadline, 15 of the 26 candidates responded to these questions. Their responses are in a table here.
2020 Living Wage Voter Guide