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HB2 prevents local adjustment of minimum wage for government contractors

Before the law, local governments could require government-hired contractors to abide by labor standards, which include wages, hours and benefits. To do so, government entities were required to meet the same standards.

Following legislators’ rewriting of parts of the Wage and Hour Act in House Bill 2, subdivisions of the state government no longer have this ability.

Carol Brooke, a staff attorney with the N.C. Justice Center, said cities like Durham and Asheville had enacted laws which required contractors hired by the city to pay a living wage before the passage of the law.

“I think this bill was probably squarely aimed at those local provisions, and obviously it’s going to prevent other progressive communities from doing something similar,” Brooke said.

During the last election, 21 states and 22 cities decided to increase the minimum wage, but North Carolina’s minimum wage remained at the federal level of $7.25 an hour.

T. William Lester, an associate professor of city and regional planning at UNC, said North Carolina is one of many states that has seen an increase in income inequality driven by rising incomes of the highly educated and the expansion of low-wage work.

Many cities and counties across the country have responded to rising income inequality by changing labor standards set by the state, but local governments in North Carolina have been limited in their response, Lester said.

“We see a similar pattern of inequality but we don’t see the same kinds of responses to ameliorate that,” he said.

Local governments, when pursuing a contract, still have the choice to do business with entities that pay a living wage, Lester said.

He said another response has been the rise of living wage certification organizations in areas such as Orange and Durham counties.

Susan Romaine, chairperson of the steering committee for Orange County Living Wage, said the nonprofit certifies and promotes businesses that pay their employees a living wage, which is $13.15 an hour in Orange County.

The nonprofit recently certified its 100th living wage employer and has raised $564,000 in wages among workers at the lower end of the payscale, Romaine said.

She said efforts like the Orange County Living Wage incentivize employers to pay a living wage in order to receive the positive publicity provided by the organization.

“Some of our employers were already paying a living wage and they wanted to jump on board,” Romaine said. “Other employers were a little bit below the living wage, and they decided to raise the wages of their workers in order to qualify.”

Lester said the problem with living wage certification programs is that they are voluntary and may only affect businesses who are poised to pay a living wage.

“It is a positive thing, and we are better off with it,” Lester said. “But it doesn’t have the strength of an actual legal mandate.”


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