The Fremont City Council, which voted in January to raise the city’s minimum wage to $15 an hour by 2020 for large employers and by 2021 for small ones, decided Tuesday to exempt nonprofits from having to pay any of their employees that much.
The council’s previous vote allowed nonprofits to pay employees 21 or younger less than the new minimum wage, but now those organizations won’t have to pay any of their employees at least $15 when businesses will be required to.
Tuesday’s vote was 5-2, with Councilman Vinnie Bacon and Councilwoman Jenny Kassan opposing the change.
“People who work at these nonprofits don’t get into it for the money, they get into it because they want to help people,” Councilman Rick Jones said in explaining his support for allowing nonprofits to avoid the same wage requirements as businesses.
“And they see the need, and this is what they want to do. But so many of our nonprofits are struggling with the funding both from the federal and state government, as well as our own budget,” he said, noting that’s why he asked for an amendment to the minimum wage ordinance.
“And I would hope to see that go forward so that we don’t lose some of the vital services that are available to our residents,” he said.
Bacon said he opposes the broader exemption because it’ll make people think twice about continuing to work at nonprofits.
“If you do have someone that is arguably 30 or 40, and is interested in getting a job that’s in the range that we’re talking about, I think that change to them, $15 versus $13 an hour, I think that’s going to be very important to them given that income level,” he said.
“Someone in that position will say, ‘Gee, if I leave the nonprofit and go to McDonald’s, I’m going to get more.’ So the nonprofit would either have to lose that person or increase the wage themselves,” he said.
At a Feb. 5 meeting when the council formally adopted the ordinance, Jones said he thought the council’s original intent was to exempt all nonprofit employees from the new wage requirements. “Obviously, I misunderstood,” he said then, before asking that the topic be revisited.
“I fully understand the importance of providing those wage increases, but I do think there is some middle ground,” Mayor Lily Mei said at Tuesday’s meeting.
“These employees are not working for the money, and having to force (nonprofits) to match that increased minimum wage would probably be too much for them to handle,” Councilwoman Teresa Keng said.
Vice Mayor Raj Salwan said “it should be the same for everyone, as far as minimum wage,” but he ended up supporting the amendment anyway because he was “sympathetic to nonprofits.”
Councilman Yang Shao said he was concerned some nonprofits would “have to close their organization and leave because they cannot afford the cost” of higher wages.
Under state law, businesses that employ 26 or more people must pay them at least $12 an hour and those that employ fewer must pay $11 an hour.
Under Fremont’s ordinance, businesses with 26 or more people must pay workers $13.50 an hour by this July 1 and $15 an hour by July 1, 2020. Employers with fewer workers don’t have to pay the higher wages until a year later, so the $15 minimum doesn’t kick in until July 1, 2021.
Nonprofits in the city will still need to comply with state minimum wage laws. California’s minimum wage will increase to $15 an hour for large businesses by Jan. 1, 2022 and for small businesses by Jan. 1, 2023.