Living Wage
2017 Wis. Act 327, effective April 18, 2018 limits the City of Madison's authority to mandate that contractors or recipients of City financial assistance pay a minimum wage. This change in law does not prevent contractors and recipients of financial assistance from voluntarily paying a living wage at the rates established on this page.
The information on this website applies to contracts signed before April 18, 2018.
This site will be updated as City procedures are modified in response to this change in state law.
Under the City's Living Wage Ordinance (MGO 4.20), employees working under certain City service and financial assistance contracts enacted after April 13, 1999 must be paid a City minimum wage. In general, the Ordinance applies to employers with City service contracts greater than $5,000 and/or recipients of City financial assistance greater than $100,000.
Under the Ordinance, all covered employers are required to post a Notice of Employee's Rights.
Background
Effective April 13, 1999, Section 4.20 of the Madison General Ordinances requires that persons directly employed by the City or employed in work performed as part of a service contract or funded by City financial assistance be paid no less than a specified minimum hourly wage.
Q. What is the living wage standard?
A. Effective January 2024, the Living Wage rate will increase to $15.87 per hour.
In 1999, the wage was $7.91 per hour. Effective January 1, 2000, the wage was equal to 105% of the federal poverty level for a family of four, divided by 2080. This translated to a wage rate of $8.43 per hour in the year 2000. In 2001 and thereafter, the wage is equal to 110% of the poverty level. Subsequent wage rates, effective from January 1 through December 31 of each year are: 2001 - $9.02; 2002 - $9.34; 2003 - $9.57; 2004 - $9.74; 2005 - $9.97; 2006 - $10.23; 2007 - $10.58; 2008 - $10.92; 2009 - $11.21; 2010 - $11.66; 2011 - $11.66; 2012 - $11.82; 2013 - $12.19; 2014 - $12.45; 2015 - $12.62; 2016 - $12.83; 2017 - $12.85; 2018 - $13.01; 2019 - $13.27; 2020 - $13.62; 2021 - $13.86; 2022 - $14.01; 2023 - $14.68; 2024 - $15.87.
Q. Who is covered under provisions of the Living Wage Ordinance?
A. The provisions are applicable to five general classes of covered employees:
- City employees, including hourly employees;
- Employees working under a service contract greater than $5,000;
- Employees working under a contract for City financial assistance (CFA) greater than $100,000;
- Employees of recipients of City financial assistance (greater than $100,000) who work on the project site funded by CFA;
- Employees of a contractor with the CFA recipient who work at least 20 hours per week at the project site funded by the CFA.
Q. Are subcontractors subject to the Living Wage Ordinance provisions?
A. Yes.
Q. Are non-profit agencies subject to the Living Wage Ordinance provisions?
A. Yes and no. Non-profit service providers are covered if they provide services under contracts with the City in amounts greater than $5,000. However, non-profit agencies are exempted from the "City financial assistance" requirements.
Q. Are employees of contractors working under previously signed City contracts affected?
A. Generally, no. The Ordinance applies only to contracts entered into after April 13, 1999.
Q. Are all service contracts over $5,000 covered?
A. No. The Living Wage Ordinance exempts professional service contracts, public works contracts and contracts with other units of government.
Q. Are all employees working under eligible service contracts covered under the Living Wage Ordinance?
A. No. The Ordinance exempts certain, specified classes of employees, including student learners, on-call employees, employees under the age of 18, employees of sheltered workshops, City Special Workers and workers covered under public works contracts.
Q. Are contracts for purchases of goods covered by the Living Wage Ordinance?
A. No.
Q. How can I be certain that a contract or employees are or are not exempted from the Ordinance?
A. In some cases, it may not be clear. You may need to contact the City Attorney or Finance Department for an opinion.
Q. Suppose a City agency has two $3,500 contracts with a service provider. Given that the total of $7,000 exceeds the $5,000 Living Wage threshold, is the contractor subject to the Living Wage Ordinance?
A. No. The Ordinance requirements apply to each contract. Since each is less than the $5,000 standard, the contracts are exempt from Living Wage requirements.
Q. Who is responsible for monitoring and contract compliance?
A. All eligible service contractors and City financial assistance recipients are required to post the required minimum City hourly wage and the phone number of the City's Affirmative Action Division. Complaints shall be directed to the contracting City agency.
Q. What are the consequences for contractors that do not comply with the Living Wage Ordinance requirements?
A. The City might withhold payments and/or terminate the contract. Violators may also be subject to a fine of up to $200 per day.
Living Wage Scenarios
| Contract/Employee | Amount | Covered? | Explanation |
|---|---|---|---|
| City Election Officials | Varies | No | City election officials are considered service contractors, not City employees. Since they earn less than $5,000, they're not covered. |
| Landscaping (includes greenery, planting and maintenance) | $20,000 | Maybe | Depends on Scope of Services. If contract is predominantly for service-related functions, then it will likely be covered under the LW Ord. Consult City Attorney for an opinion. |
| Radio Ads | $5,500 | Yes | Advertising is considered a service. |
| Service Contract with a Small Local Business | $5,001 | Yes | No exemption is made for small businesses. |
| Service Contract with a Large Municipal Corporation | $4,999 | No | Falls below $5,000 qualifying threshold. |
For More Information, Contact:
- David Schmiedicke, Finance Department: (608) 267-8710
- City Attorney's Office: (608) 266-4511