Agenda Item 12
July 8, 2014
Public Hearing
MEMORANDUM
July 3,2014
~
TO:
FROM:
County Council
Robert H. Drummer, Senior Legislative Attorney
I
fC1J
SUBJECT:
Public Hearing: Bill 29-14, Contracts and Procurement - Wage Requirements -
Reporting
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
Government Operations and Fiscal Policy Committee worksession is tentatively scheduled for
July 21.
Bill 29-14 would require a County contactor 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.
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 <98-9.
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What is the fiscal impact of the Bill?
OMB and Finance estimated that the Bill would require two new positions in the
Department of General Services a full-time Program Manager II (Grade 25) with fmancial,
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. 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 $1 02,000 and a first year cost for office equipment of $2734.
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.
This packet contains:
Bill 29-14
Legislative Request Report
Memo from County Executive
County Attorney Bill Review Memorandum
Fiscal and Economic Impact Statement
F:\LAw\BILLS\1429 Contracts And Procurement - Wage Requirements-Reporting\Public Hearing Memo.Doc
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Bill No.
29-14
Concerning: Contracts and Procurement
-- Wage Requirements -- Reporting
Draft NO.3
Revised: April 30. 2014
Introduced:
May 6. 2014
Enacted:
November 6. 2015
Executive: _ _ _ _ _ _ _ __
Effective: _ _ _ _ _ _ _ _ __
Sunset Date: ..-:..:N""on':"'e<-::-_=-_ _ __
Ch. _ _, Laws of Mont. Co. _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
By: Council President at the request ofthe 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 IIB-33A - Wage Requirements
Boldface
Underlining
[Single boldface brackets]
Double underlining
[[Double boldface brackets]]
Heading or defined term.
Added to existing law by original bill.
Deletedfrom existing law
by
original bill.
Added by amendment.
Deletedfrom existing law or the bill by amendment.
Existing law unqffected by bill.
* * *
The County Council for Montgomery County, Maryland approves the following Act:
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Bill No. 29-14
1
2
Sec. 1.
Section 11B-33A is amended as follows:
11B-33A. Wage requirements.
3
4
*
(g)
Wage reporting.
*
*
5
6
ill
The
Director must insert into each contract subj ect to this
~
Section
provision that requires the contractor to submit to the
report (on
~
7
Director
showing
~
~
schedule determined
Qy
the Director)
8
9
10
11
summary of the wages paid to its employees, who
performed direct, measurable work under the contract,
Qy
gender and race.
ill
Prohibition against retaliation.
paragraph
Q1
~
Except as provided in
12
contractor must not discharge or in any other
13
14
15
manner discriminate or retaliate against an employee, who
performed direct, measurable work under the contract, because
the employee:
16
17
18
®
has inquired about, discussed, or disclosed the wages of
the employee or another employee;
an
©
asserts any right under this subsection; or
files any complaint for violation of this subsection.
19
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 III
23
24
25
26
27
®
~
formal complaint or charge;
o
~
W\BILLS\! 429 Contracts And Procurement - Wage Requirements-Reporting\BiII 3.00c
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BILL
No. 29-14
28
.an
(Q
in furtherance of an investigation, proceeding, hearing. or
action, including an investigation conducted
!2y
the
contractor; or
is consistent with the contractor's legal duty to furnish
information.
29
30
31
32
33
34
35
36
ill
The Director may refer
~
report to the Office of Human Rights
for investigation of
~
possible violation of Chapter 27, Human
Rights and Civil Liberties.
au
Conflicting requirements.
If any federal, state, or County law or
regulati~n
37
38
39
regulation requires payment of a higher wage, that law or
controls. If any applicable collective bargaining agreement requires.
payment ofa higher wage, that agreement controls.
40
41
[au]
ill
(5)
Enforcement
*
*
*
42
43
44
45
46
47
48
49
50
51
52
53
54
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~
CA)
that liquidated damages may be imposed in the event that
~
contractor violates the wage reporting requirement in
subsection
(gt
and
all
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
interest, a reasonable attorney's fee, and damages for any
retaliation for asserting any right under this Section.
~
~
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Contracts
And
Procurement -
Wage Requirements-Reporting\BiU3.Doc
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BILL
No. 29-14
55
56
[ill]
ill
Report
*
*
*
57
58
Sec. 2. Transition.
This Act applies to a contract awarded after October 1,
2014, but does not apply to an amendment or extension of a contract originally
awarded before October 1,2014.
59
60
61
Approved:
62
Craig Rice, President, County Council
Date
63
Approved:
64
Isiah Leggett, County Executive
Date
65
This
is
a correct copy ofCouncil action.
66
Linda M. Lauer, Clerk of the Council
Date
Q
~
W\BILLS\1429 Contmcts And Procurement· Wage Requirements-Reporting\BiII3.Doc
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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,
County Executive
FROM:
SUBJECT:
-f
~"J"if---
)
/~
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 information.
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 ofthe 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 perform 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
§
1IB-33A.
Thank you for your consideration ofibis matter.
IL:lh
Attachments:
Draft
legislation
Legislative Request Report
cc:
David Dise, Director, DGS
Jennifer A. Hughes, Director, OMB
Joseph Adler, Director, OHR
Marc
Hansen, County Attorney
Joseph F. Beach, Director, DOF
m~
......
.,.,,"ntymd.'OY/31l
.~
~
240-773-3556
TrY
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lsiah Leggett
Cotmty Executive
OFFICEOF THE COUNTY ATTORNEY
ME.MORANDUM
Marc P. Hansen
County Attorney
TO:
Greg Ossont, Deputy Director
Department ofGeneral Services
Erin
J.Ashbarry
Associate County Attorney
FROM:
VIA:
DATE:
RE:
May 16,2014
am
29-14, Contracts
and
Procurement- Wage Requirements - Reporting
Bill 29,.14 amends the County's "Wage Requirements" law, found at County Code§
11
B-33A,
which
mandates
minimum
hourly rates for employees working on County contracts.
Bill 29-14.
will
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
be
imposed in the event a contractor violates the wage reporting requirements. Further, the Director
may refer a report to the Office of Human
Rights
for investigation of a possible violati{)n of
County Code Chapter 27, Human
Rights
and Civil Liberties.
Contracts
exempt from
the Wage Requirements law will also be
exempt
from the wage
reporting requirements
and
anti -retaliation provisions of
Bm
29-14.
See
Montgomery County
Code
§
1IB-33A(b)(1)
- (9) (listing exempt contracts).
Bill 29-14 does not extend the sanctions for noncompliance with the Wage Requirements
to the wage reporting provisions.
See
Montgomery County Code
§
11 B-33A(h)(4} (stating
"[tJhe sanctions of
Section 1IB-33{b) which apply
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 Street, Third Floor, Rockville; Marybmd 20850-2580
(240) 177-6744. TID (240) 777-254'5 • FAX
(240)777.6705.
erin.ashbairy@montgomeryc6l.1ntymd,gov
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Greg Ossont
May 16,2014
Page 2
Additionally, Bill 29;.14; s wage reporting requirements and
its
protection against
retaliation do not apply to subcontractors. Bill 29-14 uses the term"rontractor;' not a'\:overed
employer?'
See
Bill 29-14, Lines
6;
12. Section I1B-33Adefines a''covered employei'as
including subcontractors.
See
Code
§
11B-33(A)(a) (defining"covered employef'to inc1udc"any
contractor
or subcontractor
that is subject to this Sectiorl'(emphasis added». A court would
interpret use of the tenn'contractor;'in Lines 6 and 12 ofBill 29-14, instead of"covered employer:'
to exclude subcontractors.
This omission of subcontractors differs from the wage requirements generally in Code
§
IIB-33A, which include subcontractors. 1ms omission of subcontractors also differs from the
Countys equal benefits and prevailing wage laws, which both apply to contractors and
subcontractors.
See generally
Code Code
§§
IIB-33C(d)(2) (requiring a contractor and a
subcontractor to pay a prevailing wage rate);! IB-33C(b)(1) (requiring each contractor and
subcontractor to submit quarterly payroll records) ; 11 B-33D(b) (requiring a contractor and a
subcontractor to provide equal benefits), IlB-33D(d)(2) (prohibiting retaliation by a contractor
or a subcontractor in violation of the equal benefits provisions).
Section I1B-33A's statement that a contract may hold a contractor liable for
subcontractors noncompliance,
see
Code
§
11B-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 (bilI)
cc:
Bonnie A. Kirkland, Assistant CAO
Robert H. Drummer, Senior Legislative Attorney
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ROCKV111E, M..ARYLAND
MEMORANDUM
May 27, 2014
TO:
Craig Rice, President, County Council
Jennifer A. Hughes, Director,
Joseph F. Beach, Director, De
Council Bill 29-14, Contracts
Reporting
FROM:
SUBJECT:
e
of Management and Budget
o Finance
/J,r
Please
find attached
the
fiscal and economic impact statements for the above­
referenced
legislation.
JAH:fz
co; Bonnie Kirkland, Assistant Chief Administrative Ofllcer
Lisa Austin, Offices
of
the County Executive
Joy Nurmi, Special Assistant to the County Ex.ecutive
Patrick Lacefield, Director, Public Information Office
Joseph F. Beach, Director, Department of Finance
David Platt, Department of Finance
Robert Hagedoom, Department of Finance
David Disc. Director, Department of General Services
Erika Lopez-Finn, Office of Management and Budget
Alex Espinosa, Office of Management and Budget
Felicia Zhang, Office of Management and Budget
Naeem Mia, Ofl'ice of Management and Budget
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Fiscal Impact Statement
(;ouncil
Bill 29·14
&
Contracts and Proenrement­
Wage Requirements
-Pay
Equity, Wage Reporting
1.
Legislative Summary.
1be 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 con1r4Cts.
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 infonnation, 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 manuaHy input gender and race infonnation which is not standard on payroll
reports. In order to offset this increased cost, there is the potential for bidders or ofierors
to increase their bid or rate proposals to the County as a result of adding specific
infonnation, such as gender and race, into their
payTOU
report. The exact cost percentage
increase to the County is hard to estimate.
3. Revenue and expenditure estimates covering at least the next 6 fiscal years.
See the
anS\\'eT
to item 2.
4. An actuarial analysis through the entire amortization period for each bill that would
atlcct
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 bill authorizes future
spending.
The legislation does notauthori7.e
future
spending.
6. An estimate of the staff time needed to implement the bill.
One FTE (Program Manager
If
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
adm.ini~trators.,
One FTE (Procurement Specialist grade
27)
is needed to analyz.e bid and proposal
submissions as
it
relates to financial responsibility and qualifications, cost
and
price;
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of adequate resources for 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
cost.~
when an additional appropriation is needed.
DOS would need one FTE Program Manager II (grade 25), with. financial. accounting
and auditing background. DGS estimates total personnel costs at $90,000 and $2.734 of
associated operating expenses (desk-top, furniture. phone) in the frrst year of
implementation.
DOS 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 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.
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
induded
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
~tre
difficult
to estimate.
11. If a bill is likely to have no fiscal impact:, why that is the case.
Not
applicable .
.I
2. Other fiscal impacts or comment'>.
None.
13. The
following contributed
to
and
concurred
v.rith
this analysis:
Pam
Jones,
Chief.
omce
of
Procurement:,
DOS
Grace Denno, Office of Business Relations and Compliance, OOS
Erika
u,pez-Finn.
Office of Management and Budget
fer A.
}i~ghes,
Dire;;t(fr"
Office of Management and Budget
~~'~-~~~-~:....:~ ~ t1~Y'
7/1;4.
t
~
71
--<--'__
5/2::'-f.....
L
Date
l
I
1/4­
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Economic Impact Statement
Bm 29-.14,
Contracts 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 certain
circumstances.
1.
Tbe sources of information, assumptions, and methodologies used.
The Department ofGeneral Services
The economic impact, as opposed
to
the fiscal impact,
would
depend on whether County
contractors, i.e., Bidders or Offerors, incur costs such as hiring
additional administrative
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 de.-.cription of
any
variable that couldaffed the economic impact estimates.
The variable
that
could
affect
the economic impact is whether a c.ontractor incurs additional
administrative
costs
and whether contractors can increase their rates
to
cover those additional
costs.
3. The Bill's positive or negative effect,
if
any on employment, spending, sal'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.
111C
reason
tor
the
uncertainty is:
1) whether a contractor. i.e.,
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
BiD
is
Ukely
to have no economic impact, wby is tbat the case?
As noted in #3,
it is
uncertain whether
Bm
29-14
would have
an
economic
impact.
5. The following contributed to and concurred with this analysis: David Platt and Rob
Hagedoom, Department of Finance; Grace Denno, Department of General Services.
Jo
, lrector
Departmen: of Finance
~:::'-;::::r:i:~~:::::-.---.~-.
Paoe 1
of
1
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