Agenda Item 7F
April 14,2015
Action
MEMORANDUM
April 10,2015
TO:
FROM:
County Council
Robert H. Drummer, Senior Legislative Attorney
fvn"-j·
Wage Requirements ­
110.
SUBJECT:
Action:
Bill 29-14, Contracts and Procurement
Reporting
Government Operations and Fiscal Policy Committee recommendation
(3-0):
enact the Bill
with amendments.
Bill 29-14, Contracts and Procurement - Wage Requirements - Reporting, sponsored by
the Council President at the request of the County Executive, was introduced on May 6. A
public hearing was held on July 8 and a Government Operations and Fiscal Policy Committee
worksession was held on January 22.
Bill 29-14 would require a County contractor subject to the Wage Requirements Law to
report summary wage data, including data by gender and race, paid to their employees who work
on County contracts.
It
would also prohibit a County contractor from retaliating against an
employee who discloses salary information to another person or employee under certain
circumstances.
Background
President Obama recently recognized the lack of equality in pay between men and
women in the workforce, with women consistently receiving less than men. Without current and
accurate data to trace compensation based upon race and gender, the root that causes this
disparity is difficult to trace. Employees, in some circumstances, may face discrimination or
retaliation for discussing their compensation with one another, impeding efforts by individuals to
assert their right to equal pay. In an effort to encourage equal pay, this Bill adds wage reporting
requirements for County contractors who perform services for the County. Contractors must
report, by race and gender, the annual wages paid to employees that performed direct,
measurable work under a County contract. Additionally, the Bill prohibits discrimination or
retaliation against a Contractor's employees discussing their compensation. The Bill requires
each contract to include a liquidated damages clause for a violation. The Director of General
Services would be authorized to perform audits
to
verify compliance and to refer matters to the
Office of Human Rights under Chapter 27 for investigation.
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The County Attorney's bill review memorandum pointed out that the Bill, as requested
by the Executive, would not apply to subcontractors and does not include the same sanctions for
a violation of these reporting requirements that the law provides for a violation of the wage
requirements. See <08-9.
Public Hearing
The lone speaker at the public hearing, DGS Director David Dise, testified in support of
the Bill on behalf of the Executive. (<014).
Mr.
Dise explained that the Bill would promote
wage equity among County service contractor's employees by requiring each contractor to
submit regular reports summarizing wages paid to covered employees broken down by race and
gender. DGS would review the reports and refer cases to the County Office of Human Rights for
investigation for a possible violation of the equal employment laws in appropriate cases.
GO Committee Worksession
David Dise, DGS Director, and Bonnie Kirkland, Assistant CAO, represented the
Executive Branch. The Committee discussed how this Bill differed from Bill 51-14 and how the
reports would be sent by contractors to DGS. The Committee also discussed the fiscal impact
and the usefulness of the reports. The Committee recommended (3-0) to amend the Bill to
extend coverage to subcontractors and approve the Bill as amended. The Committee also agreed
to change the effective date from October 1,2014 to October 1,2015 after the worksession.
Issues
1.
What is the fiscal impact of the Bill?
OMB and Finance originally estimated that the Bill would require two new positions in
the Department of General Services - a full-time Program Manager II (Grade 25) with financial,
accounting, and auditing experience to respond to complaints, investigate issues, initiate and
monitor audits, and educate vendors and a full-time Procurement Specialist (Grade 27) to
analyze bids and proposals. (©1O-13) The Program Manager position has an estimated
recurring cost of $90,000 and a first year cost for office equipment of $2734. The Procurement
Specialist position has an estimated recurring cost of $102,000 and a first year cost for office
equipment of $2734. OMB submitted a revised fiscal impact statement on September 17, 2014
changing the estimated staff time to two half-time positions for a total recurring annual personnel
cost of $101,468. (©17-19) OMB revised this estimate based upon a conclusion that DGS
1
staff
would only review a random sample of contract payroll records instead of reviewing each payroll
record. The estimated office equipment costs for each position remain the same.
Although OMB could not estimate the number of audits required, each audit was
estimated to cost between $40,000 and $80,000. Finally, the Fiscal Impact Statement points out
that potential vendors may need to hire additional personnel to create the required wage reports.
If so, these additional costs are likely to be reflected in higher bid prices.
Due to the enactment of Expedited Bill 7-15, the new positions would be
in
the newly re-established principal
Office of Procurement.
1
2
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2. Should the Bill apply to subcontractors?
As the County Attorney's Office pointed out, the reporting requirements do not apply to
subcontractors. See ©9. The equal pay goal would apply equally to an employee of a
subcontractor who performs work on the contract. However, the contractor would be responsible
under the contract to ensure that each subcontractor supplies a wage report to the County.
Whether this additional administrative burden on the contractor is worth the potential additional
cost is a policy question that goes to the ultimate value of the reporting requirement itself.
Committee recommendation (3-0):
amend the Bill to extend the wage reporting
requirement to subcontractors as follows:
Replace the word "contractor
"with
the term "covered employer" in lines
6, 12,
30, and 48.
3. Should the enforcement provisions be the same for a violation of the reporting
requirement?
As the County Attorney's Office pointed out, a violation of the wage requirements is
treated the same as a violation of the nondiscrimination requirements, but the wage reporting
requirement is not. See ©8. The Bill provides for liquidated damages for a violation of the wage
reporting requirement. However, if the wage reporting requirement leads to a violation of the
equal employment law, then the sanction for the race or gender discrimination would be the
same. A contractor would violate the wage reporting requirement by not filing a required report.
Failure to file a report does not prove an equal pay violation. Liquidated damages under the
contract may be a sufficient remedy for a failure to file a required report.
. Committee recommendation (3-0):
no change to the enforcement provisions.
4. How does this Bill relate to Bill 51-14?
The substance of Bill 51-14 is similar to the prohibition against retaliation for wage
disclosure contained in Bill 29-14. However, Bill 51-14, enacted on February 3, 2015 and
effective on May 13,2015, will add this prohibition to the County's anti-discrimination laws and
will therefore apply to any employer who employs one or more persons in the County. Bill 29­
14 would limit the prohibition to an employer who obtains a service contract with the County.
Bill 51-14 will cover all County service contractors.
5. Should the Council enact a wage reporting requirement?
County procurement often struggles with competing purposes. First, the County has an
obligation to County residents to obtain the best goods and services from contractors for the best
possible price. This is normally served by establishing an open competitive process for the
award of a County contract. The County sometimes attempts to use its contracting dollars to
serve a different public purpose.
For example, the County has a Local Small Business Reserve Program that reserves
certain contracts for local small businesses. The County Procurement Law also
has
a Minority
3
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Owned Business Program. Bill 48-14, currently pending before the Council, would extend the
Minority Owned Business Program to certain contracts awarded through a request for proposals.
The County enacted a Prevailing Wage Law that requires a County construction contractor to
pay at least the prevailing wage set by the State. The Wage Requirements Law that Bill 29-14
would amend already requires most service contractors
to
pay all employees working on a
County service contract at least a living wage, currently set at $14.15 per hour. The Council is
also considering a bill to increase the number of employees with health insurance who work on a
County service contract under the Wage Requirements Law (Bill 14-14). Bill 61-14, recently
introduced at the request of the Executive would create a new local business subcontracting
program for high dollar value contracts.
Each of these procurement laws supports a strong public policy, but also runs counter to
the County's overall obligation to obtain the best goods and services for the best price. The
resulting procurement system is complicated and sometimes slow.
It
can be difficult to navigate.
Each new procurement requirement adds an incremental layer of complexity. The Council
recently established a citizen task force to study the County procurement system and make
recommendations on how
to
make it less complex and faster.
A costlbenefit analysis of Bill 29-14 raises some interesting issues. The fiscal impact
statement acknowledges that the Bill would require the County to create and fill 2 new half-time
professional positions in Procurement at an estimated annual recurring cost of $101,468.
In
addition, the fiscal impact statement estimates that each audit would cost between $40,000 and
$80,000. Finally, OMB points out that the added administrative burden oh contractors is likely
to increase bid prices. What does the County receive in return? The County would receive wage
reports from each contractor showing the wages paid to each employee who performs
measurable work on the contract broken down by race and gender. Would this lead to evidence
of discrimination? Possibly. Would it help reduce wage discrimination on the basis of race or
gender? Possibly. Wage discrimination on the basis of race or gender is already a violation of
Federal, State, and County law. At best, Bill 29-14 may lead to evidence of unlawful wage
discrimination. A more comprehensive anti-retaliation provision for wage disclosure was
already enacted in Bill 51-14.
The Federal government requires a contractor, as a condition of having a Federal
contract, to engage in a self-analysis for the purpose of discovering any barriers to equal
employment opportunity. The U.S. Department of Labor's Office of Federal Contract
Compliance Programs (OFCCP) enforces these requirements through 6 Regional Offices. Each
Regional Office has District and Area Offices in major metropolitan centers. A Department of
Labor description of the OFCCP is at ©15-16. Although Federal contract requirements in this
area go much further than the wage reporting that would be required by Bill 29-14, the Bill
would begin the County on a similar path. Any effort to eliminate unlawful employment
discrimination is a worthy goal, and some would argue that no cost is too great to work toward
that end. Absent any evidence that the wage reporting in Bill 29-14 would make a significant
difference in reducing unlawful employment discrimination, the cost may be too great for the
potential benefit.
Committee recommendation
(3-0): enact the Bill with an amendment to
cover subcontractors.
4
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6. Effective date.
The Bill, as introduced in May 2014, would apply to all contracts awarded after October
1,2014. This should be changed
to
sometime in the future. The Bill would take effect 90 days
after it becomes law. Committee recommendation
(3~O):
amend the Bill to apply to contracts
awarded after October 1, 2015.
7. Report from the Director.
After the Committee worksession, the Executive recommended an amendment that would
require the Director of the Office of Procurement to report to the Executive and the Council on
or before December 31, 2019. See ©20-21. The report would evaluate the effect of the wage
data submitted by contractors and subcontractors on wage equity. This report must include:
CA)
the
number of r:eports reviewed;
the number of reports referred to the Office of Human Rights for
investigation;
£Ill
aJ
!Ill
!m
the number of probable cause findings by the Office of Human
Rights resultiIlg from
thes~
reports;
a list of sanctions imposed upon a contractor for a violation of
subsection
Cg);
and
any
other information the Director finds relevant to evaluate the
effect of this reporting requirementon wage equitx:
This packet contains:
Circle
#
Bill 29-14
1
Legislative Request Report
5
Memo from County Executive
7
County Attorney Bill Review Memorandum
8
Fiscal and Economic Impact Statement
10
Testimony of David Dise
14
US Department of Labor - OFCCP Description
15
Revised Fiscal Impact Statement
17
April 3, 2015 Executive Transmittal Memo and Reporting Amendment
20
F:\LAw\BILLS\1429 Contracts And Procurement· Wage Requirements-Reporting\Action MemO.Doc
5
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29-14
Bill No.
Concerning: Contracts and Procurement
- Wage Requirements - Reporting
5
Revised: April 2, 2015 Draft No.
Introduced:
May 6.2014
Expires:
November 6. 2015
Enacted: _ _ _ _ _ _ _ _ __
Executive: _ _ _ _ _ _ _ __
Effective:
_~-:--
_ _ _ _ _ __
Sunset Date: --O...:.No=n:-=:e":----::---_ _ __
Ch. _ _, Laws of Mont. Co. _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
By: Council President at the request of the County Executive
AN
ACT to:
(1)
(2)
(3)
require certain County contractors to report summary
data,
including
data
by gender
and race, paid to their employees who work on County contracts;
prohibit certain County contractors from retaliating against certain employees that
disclose salary information to another person or employee; and
generally amend County wage requirements law for contractors.
By amending
Montgomery County Code
Chapter lIB, Contracts and Procurement
Article VI, Contract Administration
Section 11B-33A - Wage Requirements
Boldface
Underlining
[Single boldface brackets]
Double underlining
[[Double boldface bracketsD
* *
*
Heading or defined term.
Addedto existing law by original bill.
Deletedfrom existing law by original bill.
Added by amendment.
Deletedfrom existing law or the bill by amendment.
Existing law uru:ifJected by bill.
The County Council for Montgomery County, Maryland approves the following Act:
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BILL
No. 29-14
1
Sec.
1.
Section IlB-33A is amended as follows:
IlB-33A. Wage requirements.
2
3
4
*
(g)
Wage reporting.
*
*
5
ill
The Director must insert into each contract subject to this
Section
~
6
7
8
9
provision that requires [[the contractor]] a covered
~
~
employer to submit to the Director
determined
Qy
the Director) showing
report (on
~
schedule
summary of the wages
paid to its employees, who performed direct, measurable work
under the contract,
Qy
gender and race.
10
11
12
13
14
ill
Prohibition against retaliation.
paragraph
Except as provided in
Q1
~
[[contractor]] covered employer must not
discharge or in any other manner discriminate or retaliate
against an employee, who performed direct, measurable work
under the contract, because the employee:
15
16
(A)
has inquired about, discussed, or disclosed the wages of
the employee or another employee;
17
18
19
.all
(Q}
asserts any right under this subsection; or
files any complaint for violation of this subsection.
20
21
22
ill
The prohibition against retaliation under paragraph
ill
does not
apply to an employee who has access to wage information of
other employees or applicants as part of the employee's
essential job functions and discloses the wages of other
employees or applicants to individuals who do not otherwise
have access to the information, unless the disclosure
response to:
IS
In
23
24
25
26
27
®
~
formal complaint or charge;
-@\lAW\BlLLS\l429ContractsAndProcurement. Wage
Requirements-Reporting\BiII5.Docx
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BILL
No.
29-14
28
29
@
in furtherance of an investigation, proceeding, hearing, or
action, including an investigation conducted
Qy
[[the
contractor)] a covered employer; or
30
31
32
(g
is consistent with the contractor's legal duty to furnish
infonnation.
33
34
35
36
37
38
til
The Director may refer
f!
report to the Office of Human Rights
for investigation of
f!
possible violation of Chapter 27, Human
Rights and Civil Liberties.
.au
Conflicting requirements.
If any federal, state, or County .law or
regulation requires payment of a higher wage, that law or regulation
controls. If any applicable collective bargaining agreement requires
payment of a higher wage, that agreement controls.
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
[.au]
ill
(5)
Enforcement
*
*
*
Each contract may specify that liquidated damages for any
noncompliance with this Section includes the amount of any
unpaid wages, with interest, and that the contractor is jointly
and severally liable for any noncompliance by a subcontractor.
In addition, each contract must
specify~
fA.)
that liquidated damages may be imposed on the
contractor in the event that
f!
[[contractor)) a covered
employer violates the wage reporting requirement in
subsection
(g1.
and
@
that an aggrieved employee, as a third-party beneficiary,
may by civil action enforce the payment of wages due
under this Section and recover any unpaid wages with
~AW\BILLS\1429
Contracts And Procurement - Wage Requirements-Reporting\BillS.Docx
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BILL No.
29~14
54
55
56
interest, a reasonable attorney's fee, and damages for any
retaliation for asserting any right under this Section.
[ill]
ill
Report
57
58
*
*
*
Sec. 2. Transition. This Act applies to a contract awarded after October 1,
[[2014]] 2015, but does not apply to an amendment or extension of a contract
originally awarded before October 1, [[2014]] 2015.
Approved:
59
60
61
62
63
George Leventhal, President, County Council
64
Approved:
Date
65
Isiah Leggett, County Executive
66
67
Date
This is a correct copy ofCouncil action.
Linda M. Lauer, Clerk ofthe Council
Date
~
~A
W\BILLS\1429 Contracts And Procurement· Wage Requirements·Reporting\Bill 5.Docx
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LEGISLATIVE REQUEST REPORT
Bill
29-14
Contracts and Procurement -Wage Requirements
-
Reporting
DESCRIPTION:
Bill 29-14 would require a County contactor subject to the Wage
Requirements Law to report summary wage data, including date, by
gender and race, paid to their employees who work on County
contracts.
It
would also prohibit a County contractor from retaliating
against an employee who discloses salary information to another
person or employee under certain circumstances.
President Obama recently recognized the lack of equality in pay
between men and women in the workforce, with women consistently
receiving less than men. Without current and accurate data to trace
compensation based upon race and gender, the root that causes this
disparity is difficult to trace. Employees, in some circumstances,
may face discrimination or retaliation for discussing their
compensation with one another, impeding efforts by individuals to
assert their right to equal pay. In an effort to encourage equal pay,
this Bill adds wage reporting requirements for County contractors to
Chapter 11 B of the County Code. Contractors must report, by race
and gender, the annual wages paid to employees that performed
direct, measurable work under a County contract. Additionally, the
Bill prohibits discrimination or retaliation against a Contractor's
employees discussing their compensation.
The Bill requires
liquidated damages provisions in contracts for violations, empowers
the Director of General Services to perform audits to verify
compliance and to refer matters to the Office of Human Rights under
Chapter 27 for investigation.
Wage equality.
Department of General Services.
To be requested.
To be requested.
To be requested.
Not applicable.
David E. Dise, Director
2407776191
PROBLEM:
GOALS AND
OBJECTIVES:
COORDINATION:
FISCAL IMPACT:
ECONOMIC
IMPACT:
EVALUATION:
EXPERIENCE
ELSEWHERE:
SOURCE OF
INFORMATION:
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APPLICATION
WITHIN
MUNICIPALITIES:
PENALTIES:
Not applicable.
Contractual liquidated damages.
F:\LAW\BILLS\1429 Contracts And Procurement - Wage Requirements-Reporting\LRR.Doc
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"":;
OFFICE OF THE COUNTY EXECUTIVE
ROCKVILLE, MARYLAND 20850
Isiah
Leggett
County Executive
MEMORANDUM
April 24, 2014
TO:
Craig
L.
Rice, President
Montgomery County Council
Isiah Leggett,
Counly Executive
FROM:
SUBJECT:
-P
~""r---
.
)
//
Legislation to Add to Chapter
lIB,
Contracts and Procurement - Equal Wage
I
am
attaching for the Council's consideration a bill that would amend the County's
Contract and Procurement law to
require
certain County contractors to report wages paid by race and
gender and to prohibit discrimination against employees who discuss wage infonnation.
President Obama recently recognized the lack of equality in pay between men and
women in the workforce, with women consistently receiving less
than
men. Without current and accurate
data
to trace compensation based upon race and gender, the root that
causes
this disparity is difficult to
trace. Employees, in some circumstances, may face discrimination or retaliation for discussing their
compensation
with
one another, impeding efforts
by
individuals to assert their right to
equal
pay.
In
an
effort to encourage equal pay, this Bill
adds
wage reporting requirements for County contractors to
Chapter lIB of the County Code. Contractors must report, by race and gender, the annual wages, paid to
employees that perfonned direct, measurable work under a County contract. Additionally, the Bill
prohibits discrimination or retaliation against a Contractor's employees discuSsing their compensation.
The
Bill
requires liquidated damages provisions in contracts for violations, empowers the Director of
General Services to perfonn audits to verify compliance and to refer matters to the Office ofHuman
Rights under Chapter
27
for investigation. The amendment exempts the same contractors presently
exempt from the wage provisions of Code
§ IIB-33A.
Thank you for your consideration of
this
matter.
IL:lh
Attachments:
Draft
legislation
Legislative Request Report
cc:
David Dise, Director, DGS
Jennifer
A.
Hughes, Director, OMB
Joseph Adler, Director,
ORR
Marc
Hansen, County Attorney
Joseph F. Beach, Director, DOF
montgomerycountymd.gov/311
'
'
~:~~.~
3
i~"
240-773-3556 TTY
(J)
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lsiah Leggett
County Executive
MaroP, Hansen
OFFICE OF THE
COUNTY
A
TIORNEY
County Attorney
MEMORANDUM
TO:
Greg 08sont, Deputy Director
Department
of
General
Servi<:es
Erin
J.Ashbarry
Associate County Attorney
FROM:
VIA:
6
DATE:
RE:
May 16.
2014
Bill
29-14,
Contrllcts and
Procurement Wage
Requirements - Reporting
Bi1129-14
amends
the
County's
"Wage
Requirements" law,
found
at
County Code
§
11 B-33A, which
mandates
minimum hOUrly
rates
for employees working
on
Countycotltracts.
Bill 29-14
wilJ
require
County contractors
to
report,
by
race and gender,
the
wages
paid
to
employees who
perform
direct, measurable work on
the
County's contract. Additionally,
Bill
29-14
protects from retaliation the
employees of a County
contractor
who inquire about or
discuss wages paid to other employees.
County Contracts subject to Bill
29-14
must
state
that liquidated damages may he
imposed in the
cventa
contractor violates the wage reporting requirements. Further, the Director
may refer a report
to
the Office bfHuman Rights for investigation ofa possible violation of
County
Code
Chapter 27, Human
Rights
and Civil Liberties.
C.ontracts exempt from the
Wage
Requirements
law
will
also be
exempt from
the
wage
reporting requirements and anti-retaliation
provisions
ofBil129-14.
See
Montgomery.County
Code
§
IlB-33A(bXl) - (9) {listing exempt contracts}.
Bm
29-14
does
not extend the sanctions
for noncompliance with the Wage Requirements
to the wage reporting provisions.
See
Montgomery County
Code.§
IIB-33A(h)(4} (Stating
"[t]he
sanctions
of Section IIB-33(b) which
appiy
to
noncompliance with nondiscrimination
requirements
apply
with equal force and
scope to
noncompliance
with
the
wage reqUirements
of
this Section" (emphasis
added}).
10
J
Monroe Sti'«t, Third t1oor, Rock",fle; Mary\lmd 208S()"2580
(240) 777-6744 -lTD (240) 777·2545. FAX (240)777-6705.
erin.ashbarry@montgomerycountymd.gov
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Greg Ossant
May 16.2014
Page 2
Additionally, Bi1l29-14; swage reporting requirements
and its
protection against
retaliation do
not
IlPply to .subcontractots. Bill 29-14 usestheterm''contractor;'not a'bJvered
employer~'
See
Bill 29-14, Lines 6, 12. Section llB-33Adefines a"t:overed employei'as
including subcontractors.
See
Code
§
11B-33(A)(a)
(defirting"covered employer'tp includcUany
contractor
or subcontractor
that
is
subject to this Sectiorl'(emphasis
added». A
court would
interpret
use
oftheterm'contractor;'in
Lines
6 and 12 ofBill 29-14,
insteadof"coveredemployer:~
to
exclude subcontractors.
This omission of subcontractors differs from the wage requirements generally in Code§
llB-33A, which include subcontractors. This omission ofsU:bcontractors also differs from the
Count)'s
equal
benefits andprevailing wage laws, which both apply
to
contractors
and .
subcontractors.
See general/yCode
Code
§§
11~33C(d)(2)
(requiring
a contractor and a
subcontractor to pay a prevailing wage rate);11B-33C(h)(1) (requiring
each
contractor and
subcontractor
to
submit
quarterly
payroll
records) ; IlB-33D(b)
(requiring a.contractor anda.
subcontractor to provide equal benefits), 11 B-33D(d)(2) (prohibiting retaliation by a contractor
or
a
subcontractor
in
violation oftbeequal benefits provisions).
.
Section I1B-33A's statement that
a
contract may
hold
a contractor liable for
5ubcontractoisnoncompliance,
see
Code
§
IlB-33A(h)(5),
will
not provide incentive fora
contractor comply with Bill 29-14,
as
Bil129-14 does not extend the wage reporting and anti-
retaliation provisions to subcontractors.
.
Enclosure
(bill)
cc:
Bonnie
A.
Kirkland, Assistant
CAO
Robert H. Drummer. Senior Legislative Attorney
(j)
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ROCKVILLE, MARYlAND
MEMORANDUM
May 27,2014
TO:
FROM:
SUBJECT:
Craig Rice, President, County Council
Jennifer
A.
Hughes, Director,
Joseph F. Beach, Director, D
Council
Bill
29-14, Contracts
Reporting
Please
find attached the fiscal and economic impact sUltements for the above­
referenced
legislation.
JAH:fz
cc: Bonnie
Kirkland,
Assistant Chief
Administrative Officer
Lisa Austin, Offic.es of the County Executive
Joy Nurmi, Special Assistant to the Cotmty Executive
Patrick
Lacefield,
Director,
Public
Information Office
Joseph F. Beach, Director, Department of Finance
David Platt, Depattment of Finance
Robert
Hagedoor'l1, Department of Finance
David Dise. Director, Department of General Services
Erika Lopez-Finn, Office ofManagement and Budget
Alex Espinosa,
Office
of Management
and Budget
Felicia Zhang, Office of
Management and
Budget
Naeem
Mia, Oflice
of Management
and Budget
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Fiscal ImpactStatement
Council Bill 29·14 & Contracts and Procurement­
Wage Requirements Pay
Equity,
Wage
Reporting
M
1. Legislative Summary.
'Ine
legislation requires a County contractor subject to the Wage Requirements law report
to summarize wage data, including
data
by gender and race, paid
to
their employees who
. work on County contracts. It would also prohibit
a
County contractor
from
retaliating
against
an
employee who discloses salary infonnation
to
another person or employee
under certain circumstances.
2. An estimate of changes in County revenues and expenditures regardless of whether the
revenues or expenditures are assumed in the recommended or approved budget. Includes
source of information, assumptions, and methodologies
used.
No revenues are
affected
by this legislation.
In order to comply
\vith
the legislation, vendors may need to hire extra administrative
support to manually input gender and race infonnation which is 110t standard on payroll
reports. In order to offset this increased cost, there is the potential for bidders or oiTerors
to increase their bid or rate proposals
to
the County
as
a result of adding specific
infonnation, such
as
gender and race, into their payroll report.
1nc
exact cost percentage
iIlcrease to the County is hard
to
estimate.
3.
Revenue and expenditure estimates covering at least
the
next
6
fiscal years.
See the
answer
to
item
2.
4. An actuarial analysis through the entire amortization period for each biJI that would aiIect
retiree pension or group insurance costs.
The legislation does 110t affect retiree pension or group insurance costs.
5.
Later actions that may affect future revenue and expenditures
if
the bill authorizes future
spending.
Tne legislation does not authorize future spending.
6. An estimate of the staff time needed to implement the bill.
One FTE (Program Manager U grade 25)
with
a financial and aUditing background is
needed to respond to complaints, investigate issues, initiate and monitor audits, process
memos and reports, provide outreach, and educate vendors and contract
admini~1Iators.
One FTE
(Procurement Specialist grade 27) is needed to analy;'..e bid and proposal
submissions as
it
relates to financial responsibility and qualifications, cost and price,
@J
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of adequate resources tor the MFD program. Adding the requirements of Bill 29-14 to
this position would negatively impact
the
functions of
the
MFD program.
8.
An estimate of costs when an additional appropriation is needed.
DOS would need one FTE Program Manager II (grade 25), with financial, accounting
and auditing background.
DOS
estimates total personnel costs at $90,000 and $2,734 of
associated operating expenSt,'S (desk1op, furniture, phone) in the first year of
implementation.
DGS would require one FTE Procurement Specialist (grade 27) and estimates total
personnel costs at $102,000 and $2,734 of associated operating expenses(desktop.
furniture, phone) ) in the
first
year of implementation.
Complaints
Of
issues during compliance validation may trigger investigations and
possible audits. Each audit is estimated at $40,000-$80,000 based on recent actual audit
costs, and estimates from the Office of Internal Audit.
9. A description of any variable that could affect revenue and cost estimates.
The number of workers under each contract can affect the cost to the County since costs
to vendors would likely be included in bid proposals.
10. Ranges of revenue or expenditures
that
are uncertain or difficult to project.
See the
answer to item
2.
Direct
costs to
vendors
are
difficult to estimate,
11. If a bill
is likely to
have
no fiscal impact, why that is the case.
Not applicable.
12. Other fiscal impacts or comments.
None.
13. The following contributed
to
and concurred with this analysis:
Pam Jones, Chief, Ofiice ofProcurement, DOS
Grace
Denno~
Office of
Business Relations and Compliance, DOS
Erika Lopez-Finn, Office of Management and Budget
-$.~-
tfor
7,ftf
,_._~/a~-
Jennifer A. Hughes, Direct
r
Oftice of Management and Budget
@
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Economic Impact Statement
Bill 29-14,
Contrdct~
and .Procurement - Wage Requirements - Reporting
Background:
This legislation would require a County contractor subject to the Wage Requirements Law to
report summary wage
data~
including data by gender and race, paid to their employees who work
on County contracts.
It
would also prohibit a County contractor from retaliating against an
employee who discloses salary information to another person or employee under c.ertaln
circumstances.
1.
The
sources of information, assumptions, and methodologies
used.
The
Department
of
General
Services
The economic impact, as opposed to the fiscal impact, \<vould depend on whether County
contractors, i.e., Bidders or Offerors, incur costs such
as
hiring additional administr"dtive staff
in order to comply with Bill 29-14, and
if
they increase their rates when bidding on contracts
to reflect the higher cost.
2. A description of any variable that
could
·affect the economic
impact
estimates.
The variable that could affect the economic impact
is
whether a contractor incurs additional
administrative costs and whether contractors
can
increase their rates to cover those additional
costs.
3. The BiD's
positive
or
negative effect, if
any
on
employment,
spending,
sa,ing,
investment, incomes, and
property values
in
the
County.
It is uncertain whether
Bill 29-14
would have
a
positive or negative impact on business
income. employment. spending, incomes, and property values. The reason for
the
uncertainty is: 1) whether a contractor, Le., Bidder or Offeror, would incur additional costs,
2)
whether such additional costs would result in an increase in the proposed rates, and
if
so,
those costs would
be
borne by Montgomery County and no economic
impact,
and
3)
if
the
Bidder
or
Offeror could pass the additional costs through higher rates, would
the
Bidder or
Offeror do
so
given
the
likely competition for County contracts.
4.
If
a Bill is likely
to
have no economic impact, wby is that the case?
As
noted in
#3,
it
is
uncertain whether Bill
29-14
would have
an
economic impact.
5. The following contributed to and concurred with
this
analysis:
David
Platt
and
Rob
.Hagedoorn, Department of Finance; Grace Denno, Department of Geneml Services.
Page
1
of 1
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TESTIMONY ON BEHALF OF THE COUNTY EXECUTIVE ISIAH LEGGETT
ON BILL 29-14, CONTRACTS AND PROCUREMENT-WAGE
REQUIREMENTS-REPORTING
(pAY EQUITY BILL)
July 8, 2014
I am David Dise, Director of Montgomery County's Department of General
Services and I am here on behalf of County Executive Isiah Leggett to urge the Council's
favorable consideration of Bill 29-14 to require County contractors that are under the
Living Wage Law to report gender and race information in their payroll reports.
Montgomery County is home to a diverse, vibrant, majority-minority population.
The County's vendor base reflects this diversity. The County has always been a leader
among local governments in promulgating responsible and inclusive laws such as the
Local Small Business Reserve Program, the Minority, Female, Disabled-owned Business
Program, as well as the Living and Prevailing Wage laws. Passage of this Bill will
continue that distinction by establishing certain pay equity requirements for its
contractors. Underscoring this, the County models its commitment to pay equity. Female
County employees are consistently paid at a rate equitable to their male counterparts.
Montgomery County's current Living Wage Law requires contractors to pay all
employees, at a minimum, a "living" wage rate. While it is always hoped that employers
treat all employees equally, this is not always the case. This Bill requires contractors to
submit regular reports to the Department of General Services summarizing wages paid to
all employees performing direct, measurable work under the County contract, specifically
by gender and race. The Bill further prohibits a County contractor from discriminating or
retaliating against an employee if the employee inquires about, discusses or discloses
wage information or asserts a right under or files a complaint for a violation of the Bill's
provisions. The Bill will apply to a contract awarded after October 1,2014.
Under current law DGS has enforcement authority to investigate complaints and
conduct audits. If the audit findings warrant further investigation, DGS will report to the
Office of Human Rights for investigation of a possible violation of Chapter 27, Human
Rights and Civil Liberties. County Executive Leggett believes that women and minority
employees who work on County contracts deserve to make the same pay as their
colleagues, and passing this Bill is the right thing to do.
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116/14
U.S. Department of Labor - OffICe of Federal Contract Compliance Programs (0 FCCP) - About 0 FCC P
United States Department of Labor
Office of Federal Contract Compliance Programs
Office of Federal Contract Compliance Programs (OFCCP)
AboutOFCCP
Mission Statement
The purpose of the
Offlce
of Federal Contract Compliance Programs (OFCCP) is to enforce, for the benefit of job
seekers and wage earners, the contractual promise of affirmative actbn and equal empbyment opportunty
required of those who do business with the Federal government.
DOL's Reorganization
On November, 8, 2009, the Empbyment Standards AcImnistratbn (ESA) was abolished and the four major
program components of ESA-Office of Federal Contract Compliance Programs, Office of Labor Management
Standards,
Offlce
of Workers' Compensatbn Programs and the Wage and Hour Divisbn-became stand-abne
programs reporting directty to the Secretary of Labor. The OffK:e of the Assistant Secretary and the
Offlce
of
Management, Administratbn and Planning (OMAP) were e6minated with administrative functbns in OMAP
transferred to the four programs or departmental administrative programs. '
The purpose of the reorgantzatbn was to improve the efficency of al four programs by eiminating a layer of
revEw and decisbn-makng, whk:h albws DOL mdership to more quk:kty attend to poi:'( matters in each
program without having an added organizatbn component revEw between the program heads and senbr
mdership. .
OFCCP's ENFORCEMENT PROCEDURES
In
carrying out
its
responsibites, the OFCCP uses the folbwing enforcement procedures:
• Offers technk:al assistance to federal contractors and subcontractors to help them understand the regulatory
requirements and revEw process.
• Conducts compliance evaluatbns and complaint investgatbns of federal contractors and subcontractors
personnel porK:ies and procedures.
• Obtains Conciiatbn Agreements from contractors and subcontractors who are in vblatbn of regulatory
reqUirements.
• Monitors contractors and subcontractors progress in fulfili'lg the terms of their agreements through perbdk:
compliance reports.
• Forms Inkage agreements between contractors and Labor Department job trainng programs to help
empbyers k:Jentify and recruit: quaRfied workers.
• Recommends enforcement actbns to the Soi::itor of Labor.
• The ultimate sanctbn for vblatbns is debarment - the bss of a company's federal contracts. Other forms of
relief to vk:tims of discrirninatbn may also be available, including back pay for bst wages.
The OFCCP has cbse workng
iWW
.dol.gov /ofccp/aboutof.l'ltml
relatbnsh~s
with other Departmental agences, such as: the Department of
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116/14
U.S. Department of Labor - Office of Federal Contract Compliance Programs (0 FCCP) • About 0 FCCP
Justk:e, the Equal Empbyment Opportunity Commissbn and the DOL, the Offt:e of the Soli::itor, whk:h advises
on
ethk:a~
egal and enforcement issues; the Women's Bureau, whk:h emphasizes the needs ofworki1g women;
the Bureau of Apprentk:eship and Training, whk:h establishes polk:ies to promote equal opportunties in the
recruiment and selectbn of apprentk:es; and, the Empbyment and Training Administratbn, whk:h administers
Labor Department job training programs for current workforce needs.
OFCCP has a natbnal network of six RegbnalOfft:es, each wth District and Area Offt:es in Major Metropolitan
Centers. OFCCP focuses its resources on finding and
reso~ing
systemk: discriminatbn. The agency has adopted
this strategy to: (1) prbrtize enforcement resources by focusing on the worst offenders; (2) encourage
empbyers to engage in sef audits of their empbyment practk:es; and (3) achieve maximum everage of
resources to protect the greatest number of workers from discriminatbn.
OFCCP Leadership
Patrk:ia A. Shiu
Director
Vacant
Deputy Director
Tom Dowd
Deputy Director
OFCCP Office Directory
• Key Personnel Natbnal Office
• RegbnalOffices
• District
&
Area Offt:es
Organizatbn Chart
iWW
.dol.gov /ofa:p/aboutof.htrnl
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Revised Fiscal Impact Statement
Council
Bill29~14
& Contracts and Procurement­
Wage Requirements - Pay Equity, Wage Reporting
1. Legislative Summary
The legislation requires a County contractor subject to the Wage Requirements law report
certain wage
data
(including data by gender and race) paid to their employees who work
on County contracts.
It
would also prohibit a County contractor from retaliating against
an employee who discloses
salary
infonnation
to
another person or employee under
certain circumstances.
2. An estimate of cbanges in County revenues and expenditures regardless ofwhetber
the revenue., or expenditures are assumed in tbe recommended or approved budget.
Includes source of information, assumptions, and methodologies used.
No revenues
are
affected by
this
legislation.
In
order to comply with
the
legislation. vendors may need to hire extra administrative
support to manually input gender and race information which
is
not standard on payroll
reports. In order to offset this increased cost. there is the potential for bidders or offerors
to increase their bid or
rate
proposals
to
the County
as
a result ofadding specific
iniommtion
(such as
gender
and race)
into their payroll report.
The exact cost passed onto the County is hard to estimate at this time and \¥ill vary
by
vendor and contract.
3. Revenue and expenditure estimates covering at least the next 6 fiscal years.
See
item #2.
4. An actuarial analysis through the entire amortization period for each bill that would
affect retiree pension or group insurance costs.
The legislation does not affect retiree pension or group insurance costs.
5. Later actions that may affect future revenue and expenditures
if
the bilI authorizes
future spending.
The legislation does not authorize future spending.
6. An estimate of tbe staff time needed to impJement the bill.
Additional staff hours required under the proposed legislation are difficult to estimate;
however, DGS estimates
at least
one (1.0) FTE for the Offices of Business Relations and
Compliance (OBRC) and Procurement, as follows:
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• One
half
(0.5) FTE for a Program Manager II (grade 25) with a financial and
auditing background is needed to respond to complaints, investigate issues,
initiate
and monitor audits, process memos and reports, provide outreach, and
educate vendors and contract administrators.
l
• One-half (05) FTE for a Procurement Specialist (grade 27) is needed to anal'yze
bid and proposal submissions as it
relates
to
financial responsibility and
qualifications, cost and price, evaluation and award impacts for any equity
disparity as part of the County's procurement process.
7. An explanation of how the addition
of new
staff responsibilities would affect other
duties.
In
order
to
implement
the
proposed legislation, other key aspects ofthe above-mentioned
laws would have
to
be re-prioritized against
the
new responsibilities which the OBRC
cWTently cannot absorb within existing resources.
The proposed legislation also requires additional direct guidance to vendors which
will
result in less time spent on other actions.
Procurement Specialists are expected address issues with cures or tenninations resulting
from failure to comply
,vith
the OBRC program. The requirements of
this
legislation add
further procurement delays which '\\till increase solicitation and contract processing .
delays. For example, procurement specialists would have to
cancel the
contract and
conduct the appropriate paperwork associated to
re~issue
the contract in
case
of non­
compliance.
Currently, DOS estimates that the present Pmcurement office staff of 19 FTEs spends a
total of 77 hours on each compliance action,
v.ith
44
actions
per year on average. 1111s
results in
staff
spending
a
total of
3,388
hours (on top
of
other duties)
at the
current
level
of compliance work.
3
These compliance actions are in addition to other procurement
duties currently assigned.
8. An
estimate
of
costs
when an additional appropriation
is needed.
DOS estimates that an appropriation of
at least
$101,468 is required for one FTE in the
first year of implementation, based on:
This
r~rE
estimate assumes that only a random sample of payroll records is reviewed and instead of every
individual
payToll
record.
!
The position would review a
random
sample of
solicitation
and award
action
to
determine
compliance
with laws
and regulations, and manage procurement actions and issues to minimize delays,
coordinate
and communicate with
Office of Businesses Relations and Compliance (OBRe), contract administrators, and off-erors.
, 77 hours per compliance action times 44 compliance actions per year '" 3,388 hours per
year
to address
compliance actions
?
~
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• One-half of an FTE for a Program Manager II (grade 25) with a financial, accounting,
and auditing background. DGS estimates total personnel costs at
$45,000 and $2,734
of associated operating expe.nses (desktop, furniture, phone, etc.) in the first full year
of implementation.
• One-half ofan
FTE
for a Procurement Specialist (grade
27)
and estimates total
personnel costs at
$51,000
and
$2,734
of associated operating expenses (desktop,
furniture, phone) in the first year of implementation.
Furthermore, complaints or issues during compliance validation may trigger
investigations and possible audits. Each audit
is
estimated at
$40,000-$80,000
based on
recent actual audit costs and estimates from the Office of Internal Audit. The exact
number of audits is unknO\VD at this time.
9. A description of any variable that could affect revenue and
cost
estimates.
The number of workers under each contract that is required
to
comply with the data
reporting can
affect the
cost
to the
County since
the
vendors' increased administrative
costs
would likely
be
included in bid proposals.
10.
Ranges of revenue or expendItures that are uncertain or
difficult
to project.
See #item 2 - direct costs to vendors are difficult to estimate as it is unknO\VD
at
this
time
the precise impact on vendors and the increased costs,
if
any, that
will
be passed on to
the
County.
11.
If
a bill is likely
to
have
no
fiscal impact, why that
is
the casc.
Not applicable
1.2.
Other fiscal impacts or comments.
None
13.
The following contributed
to and concurred
with this
analysis:
Pam Jones, Chiet: Office of Procurement, DGS
Grace Denno, Office of Business Relations and Compliance, DGS
Erika Lopez-Finn, Office of Management and Budget
Naeem Mia, Office of Management and Budget
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,._ .....j
OFFICE OF THE COUNTY EXECUTIVE
ROCKVILLE, MARYLAND 20850
Isiah Leggett
County Executive
MEMORANDUM
April 3, 2015
TO:
George Leventhal, President
County Council
lsiah
Leggett, County Executive
~
£
~
FROM:
SUBJECT:
l<J
~.-------
Bill
29-14, Contracts and Procurement - Wage Requirements - Reporting
Last year,
I
sent to
the
Council for its consideration a bill to require certain
County contractors to report wages paid by race and gender, and to prohibit retaliation against
employees who discuss wage information.
I
am very pleased.
that
the Government Operations
Committee voted unanimously to approve the bill and understand it will be on the Council's
agenda for
final
action on Apri114, 2015, very fittingly, Pay Equity Day.
I
would also like
to
commend you for taking up the issue by introducing
BilI
51-14, which made the same anti­
retaliation provisions applicable to all Montgomery County employers. I signed that bill into law
on February 11,2015 and it will become effective on May 13,2015.
In accordance with discussions between you and Executive
staff,
I
would like to
suggest that the Council consider the attached amendment providing for a report of
the data
required to be submitted by the bill.
Thank you for your consideration ofthe amendment and favorable action on this
bill.
ILlbk
Attachment
'>.,.
montgomerycountymd.gov/311
. ',,'
3
240-773-3556 TTY
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'.'
:.1
Reporting Amendment
Add the following after line 35:
(5)
On or before December 31, 2019, the Director
must
submit
to the County
Executive and the County Council
a
report on the evaluation of the
wage
data
submitted
by
contractors and subcontractors under paragragh (1 ),
This report must include:
!Al
the
number ofreports reviewed;
au
the number of reports referred to the Office of Human Rights for
investigation; .
!Q
the number
of
probable cause
findings
by
the Office of Human
Rights
resulting from these reports;
£Ill
a list of sanctions imposed upon a contractor for a violation of
subsection
(Vi
and
LID
any other information the Director finds relevant to evaluate Jhe
effect of this reporting requirement on wage equity,