House File 632
HOUSE FILE
BY SHOULTZ
Passed House, Date Passed Senate, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act relating to the enactment of a state living wage and
2 providing effective and applicability dates.
3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
4 TLSB 2243HH 80
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PAG LIN
1 1 Section 1. NEW SECTION. 91D.2 LIVING WAGE REQUIREMENTS.
1 2 1. INTENT. It is the intent of the general assembly in
1 3 enacting this section to recognize that:
1 4 a. The award of contracts for services by the state
1 5 results in the indirect employment of thousands of individuals
1 6 by the state who are paid subpoverty level wages.
1 7 b. The creation or promotion of jobs that pay subpoverty
1 8 level wages is a short=sighted economic and social policy in
1 9 that such jobs do not lead to a self=sufficient workforce or
1 10 support sustainable community development but instead increase
1 11 the need for government services, such as public assistance
1 12 for food, housing, and health and child care.
1 13 c. The state is not an innocent bystander in the payment
1 14 of subpoverty level wages and it is appropriate for the state
1 15 to require that contractors who are awarded state contracts
1 16 pay at least a living wage.
1 17 2. PURPOSE. The purpose of this section is to increase
1 18 the wages of service employees who indirectly work for the
1 19 state through their employment by state contractors, in order
1 20 to improve the health and welfare of the state's employees,
1 21 promote the economic strength of our society, and alleviate
1 22 pressure on state social service programs.
1 23 3. DEFINITIONS. As used in this section, unless the
1 24 context otherwise requires:
1 25 a. "Basic health insurance benefits" means an insurance
1 26 plan that meets all of the following criteria:
1 27 (1) The employer pays one hundred percent of the premium
1 28 for individual coverage for an employee or eighty percent of
1 29 the premium for family coverage for the employee and the
1 30 employee's family.
1 31 (2) The insurance plan covers at least eighty percent of
1 32 the cost of office visits, emergency care, surgical care, and
1 33 prescriptions.
1 34 (3) The insurance plan has an annual deductible of not
1 35 more than one thousand dollars.
2 1 b. "Commissioner" means the labor commissioner or the
2 2 commissioner's designee.
2 3 c. "Person" means as defined in section 4.1.
2 4 d. "State" means the state of Iowa or a state agency,
2 5 office, department, executive board, bureau, or commission of
2 6 the state.
2 7 e. "State contract" means either of the following:
2 8 (1) A contract for services awarded by the state with an
2 9 estimated cost of one hundred thousand dollars or more.
2 10 (2) A subcontract for services with an estimated cost of
2 11 twenty=five thousand dollars or more that is awarded by a
2 12 state contractor who holds a contract for services awarded by
2 13 the state with an estimated cost of one hundred thousand
2 14 dollars or more.
2 15 f. "State contractor" means a person organized under
2 16 statute or common law in this state on a for=profit or a not=
2 17 for=profit basis that has been awarded a state contract.
2 18 4. PAYMENT OF LIVING WAGE.
2 19 a. A state contract awarded to a state contractor shall
2 20 require that the state contractor pay each employee who
2 21 performs work pursuant to the contract an hourly wage that is
2 22 at least a living wage as defined in this section, for the
2 23 duration of the contract.
2 24 b. If a state contract is subject to prevailing wage
2 25 requirements under the terms of the contract, the state shall
2 26 pay the living wage, or the prevailing wage, whichever is
2 27 greater.
2 28 5. CALCULATION OF LIVING WAGE.
2 29 a. The living wage shall be ten dollars per hour if basic
2 30 health insurance benefits are not provided to the employee by
2 31 the state contractor or eight dollars and fifty cents per hour
2 32 if basic health insurance benefits are provided to the
2 33 employee by the state contractor.
2 34 b. On July 1 of each year following the effective date of
2 35 this Act, the commissioner shall adjust the living wage in
3 1 direct proportion to any increase or decrease in the consumer
3 2 price index for the midwest region as reported by the United
3 3 States department of labor, except that the living wage shall
3 4 at no time be less than ten dollars per hour without the
3 5 provision of basic health insurance benefits or eight dollars
3 6 and fifty cents per hour with the provision of basic health
3 7 insurance benefits.
3 8 6. WAIVERS.
3 9 a. A state contractor who is a not=for=profit entity may
3 10 apply to the commissioner for a waiver of the requirement that
3 11 all of the state contractor's employees who work on a state
3 12 contract be paid a living wage, based on economic hardship.
3 13 b. The commissioner may grant a waiver of the living wage
3 14 requirement only after doing all of the following:
3 15 (1) Conducting a review of the state contractor's
3 16 financial situation, including the compensation of the state
3 17 contractor's management personnel.
3 18 (2) Making a determination that requiring the state
3 19 contractor to pay its employees the living wage under this
3 20 section would cause an undue hardship to the state contractor.
3 21 c. A state contractor that is granted a waiver under this
3 22 subsection shall apply for a renewal of that waiver annually
3 23 and the renewal of the waiver shall be based on the same
3 24 criteria as the grant of the waiver.
3 25 7. APPLICABILITY.
3 26 a. This section does not apply to a trainee who is
3 27 enrolled for less than six months in a job readiness or job
3 28 training program run by a not=for=profit entity that is a
3 29 state contractor.
3 30 b. This section does not apply to an intern who is under
3 31 twenty=one years of age and is employed by a not=for=profit
3 32 entity that is a state contractor before or after school, or
3 33 during the summer for a period of not longer than three
3 34 months.
3 35 c. This section does not apply to a state contract when
4 1 the provisions of this section conflict with or are
4 2 inconsistent with a federal program requirement.
4 3 8. ENFORCEMENT.
4 4 a. A state contractor shall not discharge, demote, harass,
4 5 or otherwise retaliate against an employee because that
4 6 employee seeks to enforce this section, or testifies, assists,
4 7 or participates in an investigation, hearing, or other action
4 8 to enforce this section.
4 9 b. A state contractor shall not split or subdivide a state
4 10 contract, pay an employee through a third party, treat an
4 11 employee as a subcontractor or an independent contractor, or
4 12 otherwise attempt to evade the requirements of this section.
4 13 c. The commissioner shall enforce this section, and shall
4 14 adopt rules pursuant to chapter 17A, in order to implement
4 15 this section and administer compliance with this section
4 16 including but not limited to procedures to receive,
4 17 investigate, and resolve complaints, and to bring actions in
4 18 the appropriate district court to recover appropriate relief
4 19 for aggrieved employees.
4 20 d. An employee who prevails under this section may be
4 21 entitled to all of the following:
4 22 (1) An award of monetary relief, including back pay in an
4 23 amount equal to the difference between the employee's actual
4 24 earnings and what the employee would have earned but for the
4 25 state contractor's violation of this section.
4 26 (2) An injunction prohibiting the state contractor from
4 27 continuing to underpay employees in violation of this section
4 28 and ordering the state contractor to take such additional
4 29 affirmative actions as are necessary to ensure future
4 30 compliance with this section.
4 31 (3) Reasonable attorney fees, reasonable expert witness
4 32 fees, and other costs of the action.
4 33 Sec. 2. EFFECTIVE DATE. This Act takes effect July 1,
4 34 2003, and is applicable to state contracts executed or renewed
4 35 on or after October 1, 2003.
5 1 EXPLANATION
5 2 This bill provides that employees of persons who are
5 3 awarded certain contracts for services by the state are
5 4 entitled to a living wage. The bill applies to a contract for
5 5 services awarded by the state with an estimated cost of
5 6 $100,000 or more or to a subcontract for services with an
5 7 estimated cost of $25,000 or more that is awarded by a state
5 8 contractor that has a contract with an estimated cost of
5 9 $100,000 or more. A state contractor can be a for=profit or
5 10 not=for=profit entity that is awarded a state contract. A
5 11 "person" for the purposes of the bill means a person as
5 12 defined in Code section 4.1, subsection 20, and includes an
5 13 individual, corporation, limited liability company, government
5 14 or governmental subdivision or agency, business trust, estate,
5 15 trust, partnership, or association or any legal entity.
5 16 The bill provides that a state contract shall require that
5 17 the state contractor pay each employee who performs work
5 18 pursuant to the contract an hourly wage that is at least a
5 19 living wage as defined in the bill, for the duration of the
5 20 contract.
5 21 The bill provides that the living wage is calculated to be
5 22 $10 per hour if there are no basic health insurance benefits
5 23 provided or $8.50 per hour with basic health insurance
5 24 benefits provided. "Basic health insurance benefits" is
5 25 defined by the bill to mean an insurance plan that covers an
5 26 employee or an employee's family, and has certain levels of
5 27 benefits concerning the cost of certain health services and
5 28 the amount of the annual deductible.
5 29 The bill provides that the labor commissioner is charged
5 30 with investigation of complaints and enforcement of the bill.
5 31 The commissioner may also allow a waiver of the requirements
5 32 of the bill, upon application by a not=for=profit entity that
5 33 shows that compliance with the bill will be an economic
5 34 hardship to the not=for=profit entity. The bill also does not
5 35 apply to interns under 21 years of age employed by a not=for=
6 1 profit entity before or after school or in the summer or to a
6 2 trainee who is enrolled for less than six months in a job
6 3 readiness or job training program run by a not=for=profit
6 4 entity that is a state contractor.
6 5 The bill provides that a state contractor shall not
6 6 discharge, demote, harass, or otherwise retaliate against an
6 7 employee because that employee seeks to enforce the bill or to
6 8 assist someone else who seeks to enforce the bill.
6 9 The bill provides that a state contractor shall not attempt
6 10 to evade the requirements of the bill by splitting or
6 11 subdividing a state contract or paying an employee through a
6 12 third party or as a subcontractor or independent contractor.
6 13 The bill provides that the labor commissioner shall enforce
6 14 the bill and adopt rules pursuant to Code chapter 17A that
6 15 include procedures for receiving, investigating, and resolving
6 16 complaints, and for seeking judicial enforcement of the bill.
6 17 The bill provides that an employee who prevails in a
6 18 complaint under the bill may be entitled to monetary relief,
6 19 including back pay, an injunction against the employer, and
6 20 reasonable attorney fees and costs.
6 21 The bill is effective July 1, 2003, and is applicable to
6 22 state contracts executed or renewed on or after October 1,
6 23 2003.
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