City of Somerville
Massachusetts

Agenda Item
208476
Placed on File
Dec 12, 2019 7:00 PM

That this Council's Committee on Licenses and Permits consider the attached amendment to Ordinance 9-31 regarding Wage Theft.

Information

Department:City CouncilSponsors:City Councilor At Large Mary Jo Rossetti, Ward Two City Councilor Jefferson Thomas ("J.T.") Scott, Ward Three City Councilor Ben Ewen-Campen, City Councilor At Large Wilfred N. Mbah, Ward Six City Councilor Lance L. Davis, City Councilor At Large Stephanie Hirsch, Ward Seven City Councilor Katjana Ballantyne, Ward Four City Councilor Jesse Clingan, City Councilor At Large William A. White Jr.
Category:OrdinancePurposes:Ordinance

Official Text

That the Committee on Licenses and Permits consider the attached amendment to City Ordinance, Section 9-31 regarding Wage Theft.

 

Meeting History

Jun 27, 2019 7:00 PM Video City Council Regular Meeting

Councilor Rossetti requested that the Committee on Licenses and Permits consider amending Ordinance 9-31, to require City contractors, subcontractors, and bidders to better comply with Federal and State wage laws.

RESULT:REFERRED FOR RECOMMENDATION
Jul 10, 2019 6:00 PM Video Licenses and Permits Committee Committee Meeting

The meeting was recessed at 7:18 PM and re-convened at 7:25 PM

Residents Penelope Taylor and Nate Clauser, along with Attorney Christopher Souris, (from Krakow, Souris and Landry), discussed the proposed ordinance. Chairwoman Rossetti stated that the Attorney General’s Office is willing to have a representative attend a future meeting to discuss this item. Ms. Pappenheim stated that she had reviewed the proposal and it was her understanding was that she was in attendance to receive input on the matter.

The current wage theft ordinance was passed in June of 2013 and the document before the committee is being proposed as a replacement of that. The committee reviewed the proposal, line by line, (with the exception of Section 5) and made several edits, amendments and requests for clarifications and further information. Chairwoman Rossetti plans on taking this item up again after the summer recess. The Director of Purchasing has been invited to join in this discussion

The meeting was recessed at 8:47 PM and re-convened at 8:53 PM.

RESULT:KEPT IN COMMITTEE
Sep 11, 2019 7:00 PM Video Licenses and Permits Committee Committee Meeting

The Committee welcomed city staff members, Assistant Solicitor Pappenheim, Purchasing Director Allen, Inspectional Services Director Antanavica and Director of Intergovernmental Affairs Connor to discuss with the Committee both their questions and recommendations in follow up to the Committee’s prior meeting. The Committee also welcomed input from Attorney Souris, Brian Flynn of Greater Boston Legal Services, Noel Xavier (Carpenters Union) and resident Marcy Goldstein-Gelb. The committee and others at the table continued to review the draft amendment that was submitted at the July 10, 2019 meeting. Ms. Pappenheim submitted a 3 page document with questions regarding the amendment that is attached to the agenda item.

There were discussions about language that may already be in construction contracts and to identify any gaps. Ms. Allen stated that there is a statutory requirement in construction contracts that departments obtain prevailing wage for certified payroll. This would also include waste hauling and street sweeping. Ms. Allen also stated that a payment bond is required if the contract is over $25,000 to pay employees and sub-contractors.

Councilor Scott had researched similar instances in other states and will share that information directly with Ms. Pappenheim. Ms. Pappenheim had reached out to the city of Lynn to see how they were handling this matter.

Ms. Pappenheim outlined a list of questions which included how many members on the committee and who would select the members. A discussion about the committee could be considered a public body. Mr. Flynn from Greater Boston Legal Services offered to dedicate resources to this effort. Others at the table offered to work outside of the meeting to make edits to the draft amendment and have it ready for the next meeting. Committee members asserted their recommended language which Ms. Pappenheim will prepare for the next meeting. The chair requested that all changes to the document be made in a bold bright color to easily track changes. Ms. Pappenheim will discuss with the Attorney General’s office and City staff potential additional amendments to Draft Amended Ordinance currently in Committee.

Councilor Scott will also discuss aspects of the document with Ms. Pappenheim over the ensuing weeks. She additionally agreed to review the revised GBLS’s document which will be forwarded to her and the Chair in the next week. They will together discuss as deemed necessary in preparation for October’s Committee meeting. The Committee expressed their desire to complete said Draft Amendments at their meeting to be held in October.

RESULT:KEPT IN COMMITTEE
Nov 6, 2019 6:00 PM  Licenses and Permits Committee Committee Meeting

Chair Rossetti thanked the administration for their work on this ordinance and the amendments. Ms. Connor noted that some of the changes were recommendations from Greater Boston Legal Services and not all from the city staff. Councilor Scott clarified that the draft dated June 21 includes the Committee's amendments and the November 5 draft includes the administration and counsel's changes, as well as incorporating suggestions from community members.

The Committee worked from the draft dated November 5. The language for the members of the Wage Theft Advisory Committee were changed to reflect staggered terms. Councilor Scott suggested that the initial terms may benefit from being more balanced.

Councilor Scott moved to amend Section 2 to read: the initial appointments of the designee from the City Council, the Mayor and Greater Boston Labor Council shall be for one year; the initial appointments for the designee from the Brazilian Workers Center, the Massachusetts Coalition for Occupational Safety and Health, the Somerville Chamber of Commerce and the New England Regional Council of Carpenters shall be for two years and the remaining initial appointments (the designees from the Metro Building Trades Council, Our Revolution Somerville, Somerville Community Corporation, and the Welcome Project) shall be for three years.

The motion was approved.

Section 5 only pertains to licenses issued by the Licensing Commission. Inclusion of the wage theft condition in smaller building permits was a suggestion previously made by the Committee, but Ms. Pappenheim shared that the opinion of the state is that additional requirements outside of the state building code cannot be imposed. Councilor Scott noted that this could be included in the granting of Special Permits. Ms. Pappenheim noted that there is not a sufficient nexus to use of the property, and it is her opinion that a wage theft condition would not be allowable. Councilor Scott noted that many conditions are often included, including working hours, parking, engineering requirements. Those relate to the use of the actual property, and not to the operation of the business as a whole. Mr. Souris added that using the special permit mechanism can be a challenge, but it is his opinion that the municipality can attach these kinds of conditions to building permits, much as they can attach conditions that taxes and bills be paid. Ms. Goldstein-Gelb shared that Boston has an ordinance outside of the building code relative to OSHA violations, and this seems like a parallel. Ms. Pappenheim added that the state building code has a provision that safety is a reason that could be used for suspending or revoking a permit, which is why the OSHA provision could apply. Provisions in other communities do not include building code provisions, likely due to the inability to supersede state building code. Mr. Souris noted that just because there is no precedent does not speak to the merits, which Councilor Mbah echoed and added that this is an opportunity to close any loopholes. Councilors Scott and Mbah expressed interest in moving forward independent of the city's reservations, as those may never be resolved.

Ms. Pappenheim asked that Mr. Lynch weigh in on the portions of Section 5 that impact the Licensing Commission, particularly Section 5 B, to change the language from 30 days to the next Licensing Committee agenda.

The Chair moved to amend the document to reflect the change in Section 5 B from: "The City will conduct a hearing within thirty (30) days from the time it becomes aware of a final determination." to "Upon notice of a violation as described herein, the Wage Theft Advisory Committee shall request that the matter be placed on the next Licensing Committee agenda."

The motion was approved.

Mr. Lynch shared that his Committee is responsible for licenses related to package stores, restaurants etc., but it is a highly regulated industry, with two state agencies overseeing this work, the ABCC and the Cannabis Control Commission. He warned that some of the penalties proposed could be contra to the penalties that already exist from these bodies. He also shared concerns about the unintended consequence that some of the penalties could have on very small businesses. Councilor Scott emphasized that none of these penalties are mandatory, and one of the tasks of the Advisory Committee will be to research violations and advise on infractions. Further, sub-section D provides that the penalties are waived if the employers enter into a conciliation process. This helps alleviate the burden on small businesses and there are no mandatory punishments. Mr. Lynch wanted to emphasize the potential for smaller businesses to get caught in this arena and note the difference between that and the large cases that are of the sort that are of large and national scale.

Councilor Scott asked about the section regarding Wage Bonds for License Holders, essentially a type of insurance for chronic wage theft violators. He suggested that a note be made in Section 5 to direct readers to the updated Wage Bond language in Section 10. Additionally, the wage bond requirements should be different depending on the industry or business, which is why it may belong in multiple sections and why the minimum amounts were set lower ($5k) than the suggested change to $250k. He recommended returning the language to Section 5 for license holders. Mr. Traslavina shared that $250k was the recommended number from the National Law Project, but Councilor Scott's argument is reasonable.

Councilor Scott moved to strike Section 5 F.

The motion was approved.

Mr. Lynch noted that Section 10 C states that the bonds MUST be maintained for the terms or extensions of any contract and wondered whether extensions includes renewals. There are some licenses that automatically renew if there are no reports within the year-long license term. The new recreational marijuana contracts are five year terms.

Councilor Scott moved to amend Section 5 E to strike the words "or extensions".

The motion was approved.

Councilor Scott moved to amend Section 5 D to change "City of Somerville" to "Licensing Commission", and "shall" to "may" in sentence 1 and adding "or suspension" after "revocation" in sentence 2 and change "If the Employer agrees to a payment plan to pay off any judgment the City will not take any action to revoke or suspend the Employer's license. During the course of any conciliation process, the Employer will follow the posting requirements in Subsection C." to "If the Employer can demonstrate a compliance plan to satisfy any related penalty imposed by the AG office, or a civil judgment, the Licensing Commission shall hold any action pursuant to Subsection B in abeyance."

The motion was approved.

The terms of the conciliation process need to be defined such that there is no option for extended avoidance of the penalties and repeat wage theft offenses.

Mr. Traslavina shared that the suggested change to Section 5 A from 5 years to 3 years was to bring the statute of limitations into compliance with existing law. Councilor Scott noted that this language is not related to bringing a claim, and thus 5 years is still acceptable.

Councilor Scott suggested creation of a section to define permits and licenses or possibly removing the language referencing permits. Ms. Taylor noted that if an industry is covered by a permit rather than a license in the future, the current language would cover any instance of wage violation. Councilor Mbah added that this would only apply to employees, not permits for things like special events. Ms. Goldstein-Gelb suggested "permits, as it pertains to employers" to clarify this difference. Councilor Scott noted that there should be a clarification about what section of the MGL these permits reference, and they should be properly addressed in the ordinance if the references remain.

Councilor Scott moved to accept the change from "Leila" to "term" in Section 5 B.

The motion was approved.

Councilor Scott moved to accept the corrections to capitalization and references to Subsection in Section 5.

The motion was approved.

Ms. Pappenheim recommended combining Sections 4 and 7 to keep the language related to contracts succinct. Mr. Traslavina noted that this could cause confusion and lead to unnecessary disputes.

Councilor Scott moved to add "and provide a copy of" after "duty to report" and to change "issued" to "solicited" in Section 4 A 2.

The motion was approved.

Councilor Scott moved to accept the corrections to capitalization and references to Subsection in Section 4.

Ms. Allen shared that the awarding authority has the leverage to make a responsibility determination based on references; the bar does not need to be as high as debarment (and this is virtually never reached). Further, a municipal body does not have the power to debar, but does bear the responsibility to check references, and this is not limited to those listed on the bid. There is concern that small companies may have a violation due to paperwork, and not actually failing to pay employee wages. There should be discretion to consider whether there was malintent or a pattern of negative behavior. The Advisory Committee could enhance and complement the capacity of the CIty in this area. Ms. Allen also supported merging Sections 4 and 7 to avoid confusion with the good and service law in MGL 30B.

Councilor Scott moved to changed "issued" to "solicited" and to remove "or any municipal body - including, but not limited to, the City of Somerville" and "or municipal government" in Section 4 A 3 and change the first line of Section 4 A 4 to read " Bidders that are subject to state, or federal Debarment for violation of M.G.L. c. 149, M.G.L. c. 151, 29 U.S.C. § 201 et seq. or any other state or federal laws regulating the payment of Wages, either voluntarily or involuntarily, or that have been prohibited from contracting with the Commonwealth or any of its agencies or subdivisions will be deemed not responsible and their bids or proposals shall be rejected."

Ms. Pappenheim noted that a certification of compliance is required in the bid process, and wondered whether it is redundant to include again in the contracting. Councilor Scott clarified that this is an affirmative certification that they have not been subject to a judgment, rather than just a presumption based on a failure to declare such. Section 4 A 1 is related to the Purchasing Agent's requirement to notify bidders of the need to comply, and Section 4 B is related to the act of the

Resident attendee Mr. Clauser pointed out an inconsistency with the definition of Debarment not including a reference to the Federal level in the definition, while referencing the same in its use in Section 4.

Councilor Scott moved to amend Section 1 A 14 to include "or Federal" after State and ", 29 U.S.C. § 201 et seq. and 29 C.F.R. § 578" before the end of the sentence.

The motion was approved.

Councilor Scott moved to strike Section 4 A 5.

The motion was approved.

Councilor Scott moved to amend Section 4 B 2 to append the language "To the extent a judgment, citation, or final administrative order has been issued against a bidder within three (3) years prior to its bid, provide a copy of the same, in addition to documentation demonstrating that all damages, fines, costs, and fees have been paid. In addition, the bidder must post a bond, to be maintained for the life of the contract, as specified by Section Ten." to the end.

The motion was approved.

Prior to adjournment, Chairwoman Rossetti requested City Staff, one member of this Committee, and Attorneys Souris & Traslavina meet to continue discussion of the current draft amended Ordinance. A date of November 19 @ 1:00 was agreed upon by all. This Working Group will report back to Committee December 11th, 6:00 p.m.

RESULT:KEPT IN COMMITTEE
Dec 11, 2019 6:00 PM Video Licenses and Permits Committee Committee Meeting
draft Draft

The committee made several motions to edit Document A and will present revised Ordinance to the City Councils on Thursday, December 12th.

Councilor Mbah motioned and it was accepted in support of Ms. Allen’s recommendation to remove “food, apparel and other” from the first “WHEREAS, on page 1.

Councilor Scott motioned and it was accepted to accept the amended language on the 4th “WHEREAS” line on page 1.

Councilor Scott motioned and it was accepted to change the 5th WHERES line to read “WHEREAS, the underreported and potentially high cost of Wage Theft to the City , its business community, and its residents impedes the City’s economic development and growth, and

Chairperson Rossetti motioned and it was accepted to capitalize the work City in the 6th “WHEREAS” line.

Chairperson Rossetti motioned and it was accepted to replace the Purchasing Department with the City on the 8th “WHEREAS” line.

Councilor Scott motioned and it was accepted to replace Inspectional Services Department with City of Somerville on the last “WHEREAS” line one page one.

Councilor Scott motioned and it was accepted to add 13. TIF Agreement and 14. TIF Plan from Document B to the Definitions on page 2 and renumber 13, 14 and 15 to be 15, 16 and 17.

Councilor Scott motioned and withdrew the ordering and text for items 1-15 on page 2.

Councilor Scott motioned and it was accepted to accept Section II Wage Theft Advisory Committee A 1 and 2 language as amended.

Councilor Scott motioned and it was accepted to remove Somerville City from B1. Duties on page 4.

Councilor Scott motioned and it was accepted to remove Complaints, any complaints, replace Wage Theft Advisory Committee with WTAC and remove at City sponsored events and in collaboration with other City departments in B2 Duties on page 4.

Councilor Scott motioned and it was accepted to replace language for Section II - Wage Theft Complaint Process A. Filing and Receipt of Complaints with new language.

Any City Department upon notification of a wage theft complaint, shall forward said complaint immediately to the WTAC. The WTAC shall notify the City of Somerville Purchasing Agent, the Somerville Licensing Commission, The Somerville City Council and the Attorney General’s office of the complaint. If the complaint pertains to work performed at any property subject to a TIF Agreement, the WTAC shall also send a copy to the EACC.

Councilor Scott motioned and it was accepted to replace the city with WTAC on Section III B. Required Communication with Attorney General’s office.

Councilor Scott motioned and it was accepted to remove Section III C.

Chairperson Rossetti motioned and it was accepted to accept the amended Section IV A1-A4.

Councilor Scott motioned and it was accepted to removed Section IV A5 and make A6 the new A5 and accept as amended.

Councilor Scott motioned and it was accepted to replace the word applicant with the word bidder on the first sentence on B. Certification and Disclosures, replace Purchasing Department with City, add bidder to the first line of B1 in two places.

Councilor Scott motioned and it was accepted to replace applicant in B2 on the first line with bidder.

Councilor Scott motioned and it was accepted amending the language in Section C1. Reporting and Notice Requirements during the Contract Term to read “If not already stipulated in the contract terms or otherwise required by law, upon” and adding “City official requesting such payroll reports” towards the end of the C1.

Councilor Mbah motioned and it was accepted to delete C2.

Councilor Mbah motioned and it was accepted to make C3 the new C2.

Councilor Mbah motioned and it was accepted to make C4 the new C3.

Chairperson Rossetti motioned and it was accepted to delete License and Permit and replace with contract Section D. Wage Bonds.

Councilor Mbah motioned to change $5,000 bond to $250,000 bond. The motioned was amended to $25,000 and was accepted.

Chairperson Rossetti motioned and it was accepted to payable to in D2 to held by and to also change License and Permit to contracts.

Councilor Scott motioned and it was accepted to make H. Suspension or Revocation on page 8 to E.

Councilor Scott motioned and it was accepted to accept E. Suspension language as submitted.

Councilor Scott motioned and it was accepted to add Prospective Licenses after Section V - Requirements for Licenses.

Councilor Scott motioned and it was accepted to accept Section V A. Requirements for License Applicants.

Councilor Scott motioned and it was accepted to accept all changes submitted for Section V B. Requirements for License Holders.

Councilor Scott motioned and it was accepted to delete Section V C. and D as submitted and replace E and F as the new C and D.

Councilor Scott motioned and it was accepted to make G. Wage Bonds for License Holders the new E.

Councilor Scott motioned and withdrew his motion to delete the work Permit on the first line of E1.

Chairperson Rossetti motioned and it was accepted to amend the $5,000 bond to $25,000 in E. Wage Bonds for License Holders.

Chairperson Rossetti motioned and it was accepted to delete at the end of the paragraph of E1 “and/or Subsection D.”

Councilor Scott motioned and it was accepted to replace “payable to” with “held by” on E2. And motioned to accept E2.

Councilor Scott motioned and it was accepted to delete “following set of mandatory conditions and replace with language to effect the following:

Councilor Scott motioned and it was accepted to replace the word “this” before Agreement with “the” in two places.

Councilor Scott motioned and it was accepted to accept Inspectional Services Department as recommended by the working group on Section VI A3.

Councilor Scott motioned and it was accepted to delete the current Section VI A7 and replace with A8.

Councilor Scott motioned and it was accepted to accept the amended language as submitted for Section VI A7.

Councilor Scott motioned and it was accepted to replace applicant with property owner and add language of certified payrolls in the first line of A8.

Councilor Scott motioned and it was accepted to delete A12 and A13.

Councilor Scott motioned and it was accepted to replace the word “this” before Agreement in two places with the word “the.”

Councilor Scott motioned and it was accepted to delete Section C on page 12 and keep original language C with the replacement of “this” before Agreement with the word “the.”

Councilor Scott motioned and it was accepted to delete the last sentence of C and replace with new language “It will be established that the residents of this municipality shall be considered third party beneficiaries of the agreement for the purposes of enforcing the above provisions in a civil proceeding brought by not less than ten (10) taxable inhabitants.

Councilor Scott motioned and it was accepted to replace language of Section VII - Municipal Construction Contracts A with language submitted by the Purchasing Director’s document noted as Document C Section VII.

Councilor Scott motioned and it was accepted to delete Section VII A1.

Councilor Scott motioned and it was not accepted to amend language of Section VII A2.

Councilor Scott motioned and it was accepted as submitted Section VII A3.

Councilor Scott motioned and it was accepted to reject the word city on Section VII A4.

Councilor Scott motioned and it was accepted to delete Section VII A6 and renumber.

Councilor Scott motioned and it was accepted to accept A7 as amended.

Councilor Scott motioned and it was accepted add the word “Each” at the beginning of the new A8.

Councilor Scott motioned and it was accepted to delete A9.

Councilor Scott motioned and it was accepted add the word “Each” at the beginning of the new A9 and replace “Inspectional Services Department” with “City.”

Councilor Scott motioned and it was accepted to delete A10.

Councilor Scott motioned and it was accepted to delete B in Section VII.

Councilor Scott motioned and it was accepted to amend C in Section VII and to make it the new B.

Councilor Scott motioned and it was accepted to accept Section VII D as amended by working group.

Councilor Scott motioned and it was accepted to accept Section VII E as amended by working group.

Councilor Scott motioned and it was accepted to accept Section VIII A-B as amended by the working group.

Councilor Scott motioned and it was accepted to delete Section IX Employee Worker Safety.

Councilor Scott motioned and it was accepted to delete Section X Wage Bonds 1 and 2.

Councilor Scott motioned and it was accepted to accept as amended Section X - Successors in Interest.

Councilor Mbah motioned and it was accepted recommending this ordinance as amended.

RESULT:APPROVED AS AMENDED
Dec 12, 2019 7:00 PM Video City Council Regular Meeting

Replaced by #209439, which was Approved, Enrolled and Ordained.

RESULT:PLACED ON FILE