individuals. and they provide services to that relationship. i guess the question is, is it important for us to distinguish that they're actually employees to that employer? or is it that we really want to try to make sure that whatever, even an independent contractor, is being paid should just be the prevailing wage, net of all the expenses, like the fuel and all these other things that you explain? i guess i am trying to understand why it is tempore to call it an employee/supplier relationship versus we do not really care that it is an independent contractor so long that you get paid the prevailing wage, net of all these other expenses. >> both the state of california division of labor standards enforcement, department of investor relations, and the city have looked at the possibility of setting a prevailing wage rate for owner-operators, which i think addresses your question. and both have declined to do so.

i think primarily because there is no -- every owner operator's costs are different and insurance rates are different. , and it is just an impossible enforcement conundrum of how to enforce a prevailing wage with the owner operator, so there is no rate, and that is why the city now proposes to require the employer/employee relationship. supervisor chu: it sounds like primarily an enforcement issue. >> i believe that is true. supervisor chu: ok. thank you. >> you are welcome. supervisor chu: why don't we go to the budget analyst report.

>> we do need to use the microphone. would you mind using the podium? supervisor chu: the one next to you. >> none of them are working. would you mind using the podium, please? >> good morning. i am from the budget and legislative analyst's office. we updated our report on the proposed revision to the prevailing wage legislation to provide more specific cost

estimates. we identified two main areas for costs that result to the revisions to legislation. one was by extending the prevailing wage requirements to nonprofit contractors for a janitorial services and the other was to predefined independent contractors as employees. for the nonprofit contractors, we did not have the most recent amendment proposed today in terms of excluding services that are provided to disabled individuals but as our estimates will include that. i would have to refer to hsa on what the difference would be. but in terms of looking just at the wage differential between minimum wage for contractors and prevailing wage for janitorial services, per public health services and real estate, we found it to be about $184,000. that does not include a, sort of, other costs. compensation, things that are driven by wages, a percentage of

wages. for solid waste contractors, we had a harder time, because we do not actually have data on how many individuals are involved. so we simply compared contract costs, per unit costs, between the contract or their bid for services using employees, compared to sns trekking, which uses it ended in a contractor's. if you look at the costs and the actual mileage for 2011, we got a cost of $630,000. this would be somewhat inclusive of the differences in costs. there may be other costs associated in terms of the transitional employment requirements, increasing it to six months, if employers were hiring former employees of a prior contractor at a higher rate because there were more senior, but we have no way to quantify or know what those costs would be. supervisor chu: thank you.

follow-up question for either the sponsor or to the department. with regard to eliminating the exclusion for the conflicts with the prevailing wage legislation, where there is an underlining negotiated contract of i am wondering, in our current practice, how have we dealt with that generally? >> could you repeat the question again in the context -- supervisor chu: this is not necessarily just for hsa. it is across the board for the other sectors as well. part of the proposal includes eliminating the exclusion where there is a conflict from what the prevailing wage is stating versus what underlying it negotiated contracts are. i am just wondering, generally, how we have treated that. generally, i imagine we have been paying the negotiated contract amount. >> generally a collective

bargaining agreement would take precedence. when negotiating, we honor the collective bargaining agreement. supervisor chu: is this true for some of the other sectors? in addition to the nonprofit world, some of the other areas? >> we have not run into that at all. supervisor chu: ok, so generally this has not applied except for nonprofits, it sounds like. >> we did actual survey all the departments in terms of whether there agreement paid the collective bargaining wage or prevailing wage. we found in all cases the prevailing wage is what was paid. supervisor chu: ok, thank you. and on the category of off- street parking, i notice that now we have included a number of specific categories. employees at off-street parking on page 6, but it does not specify who or which employee categories were included. now we have included washers,

attendants, cashiers, divert folks. have we always included those folks anyway and is this just clarifying by putting them in? >> those classifications are listed in the collective bargaining agreement adopted by the city, so that does not reflect a change. supervisor chu: just a clarification in the language? >> correct. supervisor chu: ok. colleagues, why don't we open this item up for public comment. are there members of the public who wish to speak on this item, number 11? >> good morning, supervisors because attorney for local 350. i just wanted to emphasize, in response to the question that keeps coming up, and that is the difficulty of having independent contractors and having the prevailing wage ordinance. the problem, as pointed out, it is and possible -- it is not

only an impossibility that this city that has dealt with, but the state has dealt with it, to apply a prevailing wage ordinance to persons or not employees. there is no level playing field. there's no place there. the way an independent contractor is compensated has no relationship to wages. an independent contractor is compensated with a contract price for doing the job plus the additional costs. in regard to one contract that has done a lot of attention, the costs and all were the costs of the truck, cost of insurance, cost of licensing, and all the other things did you at all that up, is on a fairly large amount of money. but when you subtract all the costs of doing business from that, disease and in well below what would be the prevailing wage because of the intent here is to try to establish a solid base from which to establish parity in terms of how much employees are paid. again, when the state of california was confronted with this, specifically in regard to

building trades issues, it was the same response. we cannot form a prevailing wage. we cannot enforce a prevailing wage with order to input the contractors, because we're not dealing with a wage. [bell rings] supervisor chu: i have a follow- up question to have there been attempts to set ablaze in might be unwieldy, but i am wondering if you apply a sort of prevailing wage on independent contractors that say the prevailing wage shall be a certain level, but you have to provide information about how much is being net it out for some of these other expenses -- has that been part of the conversation? clearly in a calling situation, you know, the vehicle, the fuel, some of the inherit costs that would otherwise not be borne by that employee or the person that they were employees of the business, has there been a conversation are wrong, does it make sense to say that what we're really getting at is that that person should be paid the prevailing wage, and we want to make sure that if you back out

all these other extraneous our cost of doing business items, that you still are being paid a prevailing wage? has that been talked about? >> knowing that this is a potential lightning rod in this area, there has been a lot of attention to that question. it is not just a question of semantics but there's literally no wage, w-a-g-e, within a been a contractor's bid as others nearly double-no way to establish any kind of parity. the way in which an independent contractors paid is not based on wages. if you're trying to establish a prevailing wage, meaning a minimum standard, ordinarily cannot apply it in the context of an independent contractor. by definition, the ways in which and the contractors are paid, it varies all over the map. whereas if you had a wage, it is one set of standards that everybody understands when you talk about it. supervisor chu: supervisor mirkarimi has joined us. for example, you are saying if

you are an independent contractor, you're provided a certain amount to complete a job, basically. you do not say necessarily how many hours or you're not required to say i am going to spend 10 hours on it and that is it, to israel to complete a job basically. >> it would generally be piece rate, but not always that way. witt and to the contractors, it could be based on an hours estimate. but it would not necessarily be that way. if the alternative was to say let's include and the contractors, we would have to have a set of regulations that would be fine with a can put into their contracts so we could read the same level playing field. supervisor chu: ok, thank you. next speaker. >> i am the executive director of the san francisco labor council, representing 150 different unions in town, and i do a lot of work on labor law

enforcement. thank you, budget share chu and supervisor kim, and a supervisor weaner for sponsoring this legislation. and supervisor mirkarimi -- and supervisor wiener, some as a mirkarimi, good to see. we want to move this forward with recommendations. i know that all of you, as supervisors, as well as the mayor's office and the compliance office and everybody in san francisco has scratched their heads over some of the contracts they have had to get out where, ultimately, you have found out that workers are being exploited after these contracts are out because of loopholes. in particular, industries that we're talking about right now, the building construction trades, prevailing wages are firmly embedded in the city charter. that has been the model that these other industries have been trying to replicate as they move

forward. i just want to say that -- and again, as we recommend in the labor council that we move forward, that to answer some of the questions about the independent contractors, i have been a labor representative an organizer for over 20 years. probably one of the most difficult things that i have had to witness and see over the last 20 + years is the increasing use of independent contractors. [bell rings] and the use of and that and contractors has been very strictly that there is exploitation involved. and that is what we are seeing, and that is why we're trying to address this. they get to hide the wages. they get to give people a certain amount of money and let them go off on their own, and wages go down, standard of living goes down, and in many of our campaigns, there to make sure that this type of standard of exploiting our workers moves forward, and that is what independent contractors do.

we really urge you to move this forward with recommendations. and we really thank you in sentences go here for seen this type of labor law moving forward. thank you. supervisor chu: thank you. >> good morning. my name is bob merlis, secretary-treasurer of local 350 peter i am here to ask for your support. i think it is an important message for the board of supervisors to send to the communities that the workers, our garbageman in this city and recycling employees and yard waste employees deserve your support, that you send this ordinance directly to the board of supervisors with your full recommendation so that our members will have peace of mind that you do have a care for the duties as they serve your communities. so i think supervisor wiener for

introducing this ordinance, and i hope it goes out of this committee with your full recommendation. see why so much -- thank you so much. supervisor chu: thank you. >> good morning. metzler with teamsters local 665, and we represent workers affected by this legislation as well. the work in the city garages in san francisco. in february, 14 of those garages will be awarded to new operators, and the lack of acrimony and lack of displacement and other disruptions to both the public and to members and our families will be evident by the current legislation and hopefully by the improvements that are going to be brought about when this is moved to the full board. we really appreciate everyone who is supporting this legislation. i also want to echo what was said as far as in the and the contractors, a little bit of

history. at one garage some years ago, unbeknownst to us, management had brought in people to do our work. as we were uncovering it, we found out that they actually inc. workers as a business individually amongst themselves in the city garage. there were in there for a few months. fortunately, we were able to do something. but it gives you an example of what the problem is with these and the contractors. it is an opportunity for people to be exploited in the workplace. in this case, on city property. it was a terrible idea that some management people had. fortunately, we were able to put a stop to it. i hope that you are reviewing all of this, you'll recognize that their people out there that take advantage of others. especially low-wage workers. [bell rings] again, we appreciate you moving this to the full board for approval. thank you. supervisor chu: thank you. next speaker.

>> good morning, supervisors. the last time that i was in front of you, we had members from local 261 and 87, janitors, and i am proud to see a lot of the members of the teamsters here today. we have been attending these hearings because this legislation is for all of our unions. this is monumental. being able to close a lot of the loopholes that contractors have been able to exploit to get a route from being able to pay those wages that are so necessary for a lot of the families that we represent. i want to thank supervisor wiener for presenting this legislation, because for the families we represent, it is absolutely important. i want to ask the supervisors on this committee, supervisor mirkarimi and supervisor chu and supervisor kim, we need your recommendation to keep this

going forward. we cannot do it without having supervisors like ourselves being able to make a conscious decision and made a decision that is absolutely fundamental in maintaining the standards of san francisco working families. thank you so much. >> i am with brightline. we spoke at the last committee hearing on this in support of the legislation, moreover in support of what we heard several speakers talk about, which was an opportunity to go even further in promoting opportunities for workers and standards for city contracts, and that was by adding an amendment to cover landscaping. at the time, that was not going to happen because there was idea to move the before the end of the year. zagat the late. people got excited about seeing an amendment because we make the decisions on how we hire

locally, how we expand into tax sectors, which supervisor kim and murdering have worked on with respect to some of the efforts to attract companies. this is a unique opportunity and we strongly encourage the adoption of the amendment to expand this legislation to landscaping. i got into san francisco last night at midnight and checked-in with supervisor weener's office to find out that the amendment had not yet come together. fortunately, i have fast fingers and a touchdown and amend this morning. i think this will do the trick. i hope that we can circulate this. we are talking about something really exciting, a local hiring plan around landscaping. i would strongly encourage the we consider this simple fix that builds upon the idea is that supervisor kim introduced at treasure island. we can adopt this amendment

today, or if you want to take a few more days to get this in before the full board, we will be building this. this is great legislation already. it has a broad amount of support. i think i have enough copies. i hope that we can add this amendment that will make great legislation even better. thanks. supervisor chu: thank you. next speaker. >> good morning, supervisors. thank you for introducing this legislation. i am supportive of my brothers and sisters in labor who are speaking on behalf of this ordinance. also, all of your support for the landscaping, this came to my attention last night at 5:30.

i worked with my lawyers and everything together. i.t. mailed it to the supervisors. i also have a copy here. -- i he mailed it to the supervisors. i appreciate all your support. whenever you can do, i appreciate it. supervisor chu: thank you. next speaker. >> good morning. i am experienced in this trade. everything that was done was done by hand. that was at a time when economic

times were not as effective. i feel the time is more than right for all the workers especially to be given full consideration for a raise in pay so they can get adequate support to their families. especially older people who do not have the energy to come forward. i stand before you today, and my intellect is just as firm as it was years ago.

my trade was being a cabinet maker. there is no type of machinery that i cannot work. however, i am turned away by certain people. that is the big difference. i was not hear from the beginning of the proposal. whatever it is, i give my wholehearted support. supervisor chu: thank you. are there other members of the public that wish to speak on item 11? seeing none, public comment is closed. colleagues, this item is before us and there is an amendment before us as well.

supervisor weener, did you have any closing comments? supervisor kim? supervisor wiener: yes, thank you for those of you came out today, supporting those, i made earlier, as well as earlier legislation. there is always give and take. i appreciate on all sides, labor, departments, nonprofit, there has been give-and-take on this, and i appreciate that. i think with these amendments, this is strong legislation, and i hope we can move forward with a positive recommendation. i do want to note, with respect to landscaping services, the issue raised by local 261, my office had previously indicated

my commitment to work with them, to work on drilling legislation, related to landscaping services. i think there is work to be done there. however, we also agreed we need to do more iresearch to see what contracts were at issue, what the issues were, etc. we want to make sure, when the talk about prevailing wage legislation, potentially expanding the contracts covered, that we are doing so based on precise information, what is covered, what is not covered, where we want to go, where we do not want to go. i appreciate the work that was done on the city amendments. we will take a look at them. i am sure we will be meeting and talking about trailing legislation. for now, i would request the city adopt the amendments

offered at the beginning of the hearing, and i hope, moved forward to the full board with positive recommendation. supervisor chu: thank you. supervisor mirkarimi? supervisor mirkarimi: thank you. sorry i was late. i was at the demolition of our jail no. 3, which was quite a milestone, since it has taken several decades to get the wrecking ball in place. that was an important event for the city and county of san francisco, and our sheriff's department. my decision remains the same, as i indicated before. it has my full support. i am aware of the amendments proffered by supervisor wiener. i wanted to come back and take part in my last participating role here on the budget committee. more than happy to make a motion to accept the amendments and

move forward with recommendations. supervisor chu: thank you, supervisor mirkarimi. supervisor kim? supervisor kim: i want to support the recommendation to move forward. i want to thank supervisor wiener's office for their work. i also appreciate the cleanup around this law, especially around establishing the prevailing wage, and i appreciate the amendment around ensuring prevailing wage for all the workers here with city contracts, and also providing a logger employment transition period. when these contracts have been, they have huge impact on employees and their families. six months is a more humane amount of time to give to folks in order to find new jobs, even

in an economy as difficult as today. i want to thank supervisor wiener;s's office. supervisor chu: thank you for being here. supervisor mirkarimi, thank you for participating in your last board hearing here. [applause] of course, also the last budget meeting in particular. we want to thank you and wish you the best as sheriff of the city. i do want to articulate a few points. when this item came before us previously, there was a lot of concern in my mind about it because there are a lot of components that conflict with some of the things i believe in. for example, eliminating the small business exemption was something i was concerned with. i have been a purported to make sure we provide opportunities

for small businesses. having an exemption seemed to make sense. one of the big concern for me on the small business component was to say, do we have the same level playing field at small businesses would have for participating, bidding in work for the city? that is why i appreciate the amendment made through the help of ms. kelly and supervisor wiener to make sure we are providing the cost estimates, so that they are more in line of what i have been supportive of. i do appreciate that amendment. the other component that was problematic, not necessarily the concept, but how it would apply. this is the issue of the retention going from 90 to 180 days. while i agree it makes e