Agenda Item 7
December 1, 2015
Public Hearing
MEMORANDUM
November 23,2015
TO:
FROM:
SUBJECT:
County Council
Amanda Mihill, Legislative Attorney
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Public Hearing:
Bill 43-15, Contracts and Procurement - Wage Requirements ­
Amendments
...
Bill 43-15, Contracts and Procurement - Wage Requirements - Amendments, sponsored by Lead
Sponsors Councilmembers EIrich and Navarro and Co-Sponsor Council President Leventhal, was
introduced on October 20, 2015. A Government Operations and Fiscal Policy Committee
worksession is tentatively scheduled for January 21, 2016.
Bi1143-15 would require certain contractors or subcontractors to submit certain payroll records to
the Chief Administrative officer; specify the remedies for a violation of the wage requirements;
and specifY that a violation of the wage requirements law is a potential cause for debarment or
suspension.
This packet contains:
Bill 43-15
Legislative Request Report
Press Release
Circle#
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Bill No.
43-15
Concerning: Contracts and Procurement
Wage
Requirements
Amendments
Revised:
10/1412015
Draft No.
Introduced:
October 20. 2015
Expires:
April 20, 2017
Enacted: _ _ _ _ _ _ _ _ __
Executive: _ _ _ _ _ _ _ __
Effective: _ _ _ _ _ _ _ _ __
Sunset Date: _ _ _ _ _ _ _ __
Ch. _ _, Laws of Mont. Co. _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
Lead Sponsor: Councilmembers Eirich and Navarro
Co-Sponsor: Council President Leventhal
AN
ACT
to:
(1)
(2)
(3)
(4)
require certain contractors or subcontractors to submit certain payroll records to the
Chief Administrative officer;
specify the remedies for a violation ofthe wage or records requirements;
amend the causes for debarment or suspension; and
generally amend the County procurement laws.
By amending
Montgomery County Code
Chapter lIB, Contracts and Procurement
Section IIB-33A and I1B-37
Boldface
Underlining
[Single boldface brackets]
Double underlining
[[Double boldface bracketsD
* * *
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 unaffected by bill.
The
County Councilfor Montgomery County, Maryland approves thefollowing Act:
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BILL
No.
43-15
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Sec. 1. Section IIB-33A is amended as follows:
IIB-33A. Wage requirements.
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(g)
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Wage reporting.
(1)
The Director must insert into each contract subject to this Section
a provision that requires a covered employer to submit to the
Director a report (on a schedule determined by the Director)
showing a summary of the wages paid to its employees, who
performed direct, measurable work under the contract, by gender
and race.
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Each contractor and subcontractor must submit!! complete
gmy
of
its payroll records for work performed on !! contract covered
Qy
this Section to the Chief Administrative Officer or
within 14 days after the end of each payroll period.
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designee
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The payroll records must contain !! statement signed
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the
contractor or subcontractor certifying that:
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the payroll records are correct; and
the wage rates paid are not less than those required
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this
Section.
{f}
Each payroll record must include:
CA)
the name, address, and telephone number of the contractor
or subcontractor;
(ill
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the name and location of the job; and
each employee's:
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.cg
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(ii)
name;
current home address, unless previously reported;
daily straight time and overtime hours;
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(iii)
Q
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BILL
No. 43-15
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(iv)
total straight time and overtime hours for the payroll
period;
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(vi)
rateofoo;
fringe benefits
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and amount;
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(vii) gross wages; and
(viii) the employer and the employee share of any health
insurance premium provided to the employee.
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Each contractor or subcontractor must:
CA)
keep payroll records covering work perfonned on
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contract
covered
Qy
this Section for not less than
work is completed; and
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years after the
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au
subject
to
reasonable
notice,
pennit
the
Chief
Administrative Officer or
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designee to inspect the payroll
records at any reasonable time and as often as the Chief
Administrative Officer deems necessary.
(Q)
The Chief Administrative Officer or
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designee must make payroll
records obtained from contractors or subcontractors under this
Section available for public inspection during regular business
hours for
2.
years after the Chief Administrative Officer receives
the records, unless disclosure of
federal or state law.
[(2)]
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record is prohibited under
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[(4)]
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[(3)]
[(5)]
am
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(i)
Enforcement.
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BILL
No. 43-15
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(1)
The Chief Administrative Officer must require each covered
employer to:
(A)
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certify that the employer and each subcontractor is aware of
and will comply with the applicable wage requirements of
this Section;
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(B)
keep and submit any records necessary to show compliance;
and
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(C)
conspicuously post notices informing employees of the
requirements of this Section, and send a copy of each such
notice to the Chief Administrative Officer's designee.
(2)
The Chief Administrative Officer or g designee must [enforce this
Section,] perform random or regular audits [and any other audit
necessary to do so,] and investigate any complaint of a violation of
this Section. If the Director determines that g provision of this
Section has been violated, the Director must issue g written
decision, including imposing appropriate sanctions, and may
withhold from payment due the contractor, pending g fmal
decision, an amount sufficient to:
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(ii)
!mY
each employee of the contractor or subcontractor the
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full amount ofwages due under this Section; and
satisfy g liability of g contractor for liquidated damages as
provided in this Section.
(3)
An employer must not discharge or otherwise retaliate against an
employee for asserting any right under this Section or filing a
complaint of violation. Any retaliation is subject to all sanctions
for noncompliance with this Section.
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(1)
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BILL
No. 43-15
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(4)
The sanctions ofSection IlB-33(b) which apply to noncompliance
with nondiscrimination requirements apply with equal force and
scope to noncompliance with the wage requirements of this
Section.
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(5)
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:
(A)
that liquidated damages may be imposed on the contractor
in the event that a
[a]
covered employer violates the wage
reporting or payroll records reporting requirement in
subsection (g).1 including for providing late or inaccurate
payroll records; and
(B)
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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If
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contractor or subcontractor fails to submit, or is late in
submitting, copies of any payroll record or other report required to
be submitted under this Section, the County may deem invoices
unacceptable until the contractor or subcontractor provides the
required records or reports, and may postpone processing
payments due under the contract or under an agreement to finance
the contract.
IlB-37. Debarment or suspension.
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BILL
No. 43-15
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*
(c)
suspension may include:
{l)
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Causes for debarment or suspension.
The causes for debannent or
conviction for commission of a criminal offense incident to
obtaining or attempting to obtain a public or private contract or
subcontract, or in the performance ofthe contract or subcontract;
(2)
conviction of embezzlement, theft, forgery, bribery, falsification
or destruction of records, receiving stolen property, kickbacks or
any other offense indicating a lack ofbusiness integrity;
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(3)
conviction under state or federal antitrust statutes arising out ofthe
submission of bids or proposals;
(4)
violation of County contract provisions of a character which is
regarded by the Director to be so serious as to justify debarment
action. These provisions may include:
(A)
deliberate failure without good cause to perform under the
specifications or within the time limit provided in the
contract; or
(B)
a record of failure to perform or of unsatisfactory
performance under the provisions of one or more contracts;
however, failure to perform or unsatisfactory performance
caused by acts beyond the control of the contractor are not
a basis for debannent;
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(5)
violation of the wage requirements in Section IlB-33A;
any other serious cause the Director determines to be so
compelling as to affect the competency or integrity of a potential
contractor, including debarment by another public entity; or
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BILL No. 43-15
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[(6)]
ill
violation
of the ethical standards set forth in this Chapter or
Chapter 19A.
(d)
Decision.
The Director must issue a written decision to debar or suspend.
The decision must:
(1)
(2)
state the reasons for the action taken; and
inform the debarred or suspended person of the right to an
administrative appeal, after the decision becomes fmal, to the
Circuit Court under the Maryland Rules.
(e)
The Director must send a copy ofthe decision to the person involved and
the Chief Administrative Officer who may approve, revise, or remand the
decision. If the Chief Administrative Officer takes no action within 5
working days, the decision of the Director becomes final.
(f)
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Appeal to court.
The debarred or suspended person may appeal the
decision to debar or suspend to the Circuit Court under the Maryland
Rules governing administrative appeals. The debarred or suspended
person and the County may appeal the decision ofthe Circuit Court to the
Court of Special Appeals.
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(7'\
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LEGISLATIVE REQUEST REPORT
Bill 43-15
Contracts and Procurement Wage Requirements
-
Amendments
DESCRIPTION:
Bill 43-15 would require certain contractors or subcontractors to
submit certain payroll records to the Chief Administrative officer;
specify the penalties for a violation of the wage requirements; amend
the causes for debarment or suspension; and generally amend the
County procurement laws.
There have been reports that some County contractors and
subcontractors may be implementing paycheck deductions for benefits
that employees have not requested and services like cellphones and
uniforms. There are not adequate reporting requirements in the current
Living Wage law.
To strengthen enforcement of the Living Wage law.
Procurement
To be requested.
To be requested.
To be requested.
To be researched.
Amanda M. Mihill, Legislative Attorney 240-777-7815
N/A
PROBLEM:
GOALS AND
OBJECTIVES:
COORDINATION:
FISCAL IMPACT:
ECONOMIC
IMPACT:
EVALUATION:
EXPERIENCE
ELSEWHERE:
SOURCE OF
INFORMATION:
APPLICATION
WITHIN
MUNICIPALITIES:
PENALTIES:
N/A
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Montgomery
County Council
For Immediate Release
.
Oct.
16,
2015
Contact: Neil H. Greenberger
240-777-79391
Delphine Harriston 240-777-7931
Sonya Healy
240-777-79261
Namita Acharya 240-777-7819
N
E
W
Montgomery Councilmembers Marc Eirich
and Nancy Navarro to Introduce Bill to
Strengthen Reporting Requirements and
Enforcement of County's Living Wage Law
New Law Would Close Reporting Loopholes and
Expand Enforcement Options
ROCKVILLE, Md., Oct. 16, 2015-Montgomery County Councilmembers Marc
EIrich, chairs the Council's Public Safety Committee, and Nancy Navarro, who
chairs the Government Operations and Fiscal Policy Committee, on Tuesday, Oct.
20, will introduce Bill 43-15 that would strengthen enforcement of the County's
S
R
E
L
Living Wage Law. The bill, which is also co-sponsored by Council President
George Leventhal, would require additional reporting requirements for County
contractors and subcontractors and expands enforcement options to help ensure
compliance with the County's living wage requirements.
"There have been reports that certain County contractors and subcontractors
implement paycheck deductions for benefits, which employees have not requested,
and services like cellphones and uniforms," said Councilmember Eirich. "These
deductions reduce employee pay below the County's living wage. The new
reporting requirements and enhanced enforcement actions proposed in Bill 43-15
are intended to crack down on these practices. County law requires that our
contractors pay a living wage, and the actions by some to circumvent the intention
of that law have made this legislation necessary."
The bill will be introduce during the morning session of the Council's regular
weekly meeting that will be held in the Third Floor Hearing Room of the Council
E
A
S
E
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2
Office Building at 100 Maryland Ave. in Rockville and will
be
televised live by
County Cable Montgomery (CCM-Cable Channel 6 on Comcast and RCN,
Channel 30 on Verizon). The broadcast also will be streamed at:
http://tinyurl.comlkhktggw.
A public hearing on the bill is tentatively scheduled for 1:30 p.m. on Nov. 17.
"Companies that do business with Montgomery County have an obligation to treat
their employees fairly," said Councilmember Navarro. "Bill 43-15 will help
protect working families by ensuring that contractors and subcontractors are truly
paying a living wage to their employees and are not side-stepping their responsibly
by implementing unauthorized payroll deductions and other fees. This bill expands
reporting requirements and provides real penalties for those who fail to comply
with the County's Living Wage Law."
The County Council enacted its Living Wage legislation in 2002 (Bill 5-02). The
law requires certain businesses that provide services to the County to pay
employees working on a County contract a minimum living wage that was
originally set at $10.50 per hour. The County's chief administrative officer must
adjust the rate each July 1 by the annual average increase, if any, in the Consumer
Price Index for all urban consumers for the Washington-Baltimore metropolitan
area. Effective July 1,2015, the living wage is $14.35 through June 30, 2016.
As proposed, Bill 43-15 requires County contractors and subcontractors to submit
a complete copy of all payroll records for work performed within 14 days after the
end of each payroll period and must certify that the records are correct and that the
wage rates comply with County law. In addition, County contractors and
subcontractors must retain payroll records for no less than five years after the work
is completed. The chief administrative officer or a designee may inspect payroll
records at any reasonable time and as often as necessary.
In addition, Bill 43-15 provides that the County may withhold payments from a
contractor in an amount sufficient to pay each employee the full amount of wages
due and may postpone payments due until the contractor or subcontractor provides
the required records or reports.
If
a violation of the County's living wage
requirements is found, debarment or suspension of a contractor may be considered.
"This measure will improve the County's ability to ensure our law is being
complied with, and workers are being treated fairly," said Council President
Leventhal.
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