Wage Law Won’t Affect Small Firms

The Board of Supervisors agreed Tuesday to exempt small businesses from a new law that requires those with whom the county contracts to pay workers at least $8.32 an hour.

“I’m trying to level the field for the small businessperson,” said Supervisor Don Knabe as he introduced the proposal, which amended a living wage ordinance passed only last week.

Supervisors spent more time Tuesday arguing about the proposal--which would apply to a few dozen contracts--than they did discussing the entire $15-billion county budget, which swiftly passed Monday.

Union leaders warned that the provision, which would apply to any business with 20 or fewer workers, violated the principles of the county’s living wage ordinance, designed to ensure that people working for the county make at least enough to stay off welfare.

Pointing out that county contracts are generally awarded to the lowest bidder, Bart Diener of the Service Employees International Union, Local 660, said: “By making this exemption . . . you are giving advantages to businesses based on their poverty wages.”

Diener also raised the specter of contractors creating shell companies to qualify for the exemption, but Knabe stressed that he had written the law to avoid such abuse.

Although other supervisors also worried about evasions of the law, the board ultimately approved the move unanimously, but not before arguing over technicalities.

At one point, Supervisor Mike Antonovich disappeared from the board chambers, then reappeared carrying his infant son, Mike Jr. Supervisors and staff cooed over the baby, and a county photographer snapped a few pictures. Then the supervisors resumed their squabbling.

The board asked its staff to bring back specific legal language for final approval next week.

“I know what you’re trying to do, and I support what you’re trying to do,” Supervisor Yvonne Brathwaite Burke told Knabe. “But let’s not open up the floodgates.”

Knabe had introduced his proposal last week, as supervisors struggled to pass their version of the so-called living wage law, which would affect an estimated 10,000 workers countywide, but drew criticism for exempting part-time employees from its pay requirements.

Knabe agreed to postpone consideration of the proposal until Tuesday, when supervisors also gave automatic final approval to the living wage law. Knabe, who with fellow Republican Antonovich opposed the ordinance, said the new pay requirements favored large corporations that could absorb overhead costs.

“They can just sort of beat down these small businesses,” he said.

His proposal would define a small business as a company that employs 20 or fewer full-time and part-time workers and has less than $1 million in a combination of prior-year revenues and potential county contracts it might win.

But Diener of SEIU Local 660 and Supervisor Zev Yaroslavsky recalled how county contractors have posed as small businesses to avoid paying their workers even a minimum wage.

“I want to be sure we’re not setting up a sham ordinance that’s going to be gutted,” he said as Knabe snapped that Yaroslavsky was “trying to look for every loophole” to avoid approving the plan.

Knabe pointed out that when supervisors passed the living wage ordinance last week, they ordered a host of county agencies to ensure that contractors were not taking advantage of unforeseen loopholes in the law. Those monitors would also inspect to ensure that the small business exemption was not abused.

In six months those agencies, including the county’s chief administrative office and auditor-controller, will report to supervisors on how the law is implemented.

“There is going to be oversight,” Supervisor Gloria Molina said.