Road wage: How to pay workers who split time inside and outside L.A.?
Yet another wrinkle has emerged as Los Angeles lawmakers seek to boost the minimum wage: how businesses will pay employees who split their time inside and outside the city limits.
The new rules, slated to be approved by the City Council on Wednesday, would gradually increase pay to at least $15 an hour for any employee who spends at least two hours weekly working in Los Angeles.
That means that some businesses based in Burbank, Glendale, Torrance or other nearby cities will be required to raise wages for the hours their employees spend in L.A. — and that some L.A. employers won’t have to pay the higher wages when their workers are toiling outside city limits.
The legal language mirrors wording used in other California cities that have increased wages, such as San Francisco and Oakland. Yet some city leaders are still questioning how it would work. The Los Angeles County Business Federation, also known as BizFed, warned it could be confusing and difficult to track.
“I don’t think anyone was prepared for this,” BizFed policy manager Dustan Batton said. “It could extend the minimum wage to a plethora of businesses outside of L.A.”
Others, including employment attorney Steve Nutter, said the wording would prevent companies that send employees to L.A. jobs — such as construction contractors — from avoiding the wage by setting up their offices outside city limits. If they could, “that would be unfair to the businesses in L.A.,” Nutter argued.
Among the workers who stand to benefit is Lekecia Dukes, a 40-year-old mother who said she earns $9 an hour as a caregiver.
Her employer, a corporation with franchises worldwide, sends her to assist elderly clients from Redondo Beach to Mar Vista. Dukes said she earns roughly $600 to $700 a month working part time, logging most of her hours in Los Angeles. Her work can include bathing and dressing seniors, driving them to errands and medical appointments, and doing household chores. She drives her own car from job to job, grabbing cheap meals from McDonald’s as she crisscrosses the South Bay.
Her situation “is a good example of why work done in the city of L.A. should be subject to the policy,” said Peter Kuhns, L.A. director of the Alliance of Californians for Community Empowerment, a community organizing group to which Dukes belongs. “Her employer is based outside the city limits, but most of the work she does is inside it.”
Dukes has two children — a 9-year-old son and an adult daughter with schizophrenia — and scrapes by with food stamps, canned food given away at a community center and extra cash from recycled cans and jars. When her son needed a retainer, Dukes begged her dentist for a discount and sold her computer to pay for it.
If her late parents hadn’t left her their South L.A. house, she said, “I would probably be homeless.”
But extending higher wages to anyone who works a few hours weekly in Los Angeles has also generated questions and concerns, including from lawmakers firmly behind the wage increase.
At a Friday hearing, Councilman Paul Krekorian questioned whether a Glendale business that does deliveries in Ventura County would have to pay its driver higher wages for time spent passing through L.A.'s San Fernando Valley. Councilman Paul Koretz added that he was worried that an L.A. employer could duck the wage requirements whenever its workers went outside L.A.
“It never occurred to me that if you were an L.A. company and your employee spent 90% of their time in L.A., they’d only be paid the L.A. minimum wage 90% of the time,” Koretz lsaid.
At the hearing, Krekorian asked how the city would be able to enforce such a rule and questioned whether it would be vulnerable to a legal challenge. City lawyers assured council members that the wording would stand up in court, calling it “very standard.” Still, the lawmakers insisted that city attorneys report back with more information.
Other cities where minimum wage rules hinge on how many hours an employee works within city limits have spelled out more details: Seattle said that an employee traveling through Seattle from one city to another was not covered by the rules if they did not make “employment-related or commercial stops” besides refueling or personal meals, for instance. Business groups opposed to the L.A. wage increase said tracking hours could become a nightmare. If a worker is driving from job to job, “do you put GPS on their car and start counting the minute they cross the border?” asked Ruben Gonzalez, senior vice president of the Los Angeles Area Chamber of Commerce. “The hallmark of a bad law is that it’s very difficult to implement.”
Stuart Waldman, president of the Valley Industry & Commerce Assn., said the rules could make it harder for some retail and grocery chains to schedule workers for shifts at multiple stores so that they get enough hours to qualify for benefits. The California Grocers Assn. said in a statement that it was “seeking solutions to the unique scheduling challenges this ordinance will create.”
Nutter was skeptical that most employers would find it hard to track the hours their workers spend inside and outside L.A., pointing out that some companies already have to do similar bookkeeping for jobs at Los Angeles International Airport, where a city ordinance imposed pay requirements.
But even some experts who consider the rule reasonable said it could be difficult for L.A. to enforce. The wording indicates “they’re taking responsibility for the economic activity happening in their city,” said Chris Tilly, director of the UCLA Institute for Research on Labor and Employment. But “to monitor and enforce this kind of provision is going to be challenging at best.”
Wage enforcement is already being eyed with concern: L.A. is planning to initially hire five staffers to investigate claims of underpayment citywide, far fewer than were recommended by a study commissioned by the city. Tilly said the city would probably target prominent companies such as FedEx rather than try to track down “the many, many small companies for whom a tiny fraction of their workforce sets foot in L.A.”
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