L.A. to loosen minimum wage rules for some nonprofits

Ilenee Velasco cleans the front door of the headquarters of Homeboy Industries in March. Nonprofits that hire and train disadvantaged and out-of-work clients, such as Homeboy, won't have to pay them Los Angeles' new minimum wage for the first year and a half of their employment.

June 30, 2015 9:13 PM PT

Nonprofits that hire and train disadvantaged and out-of-work clients to rejoin the workforce won’t have to pay them Los Angeles’ new minimum wage for the first year and a half of their employment, Los Angeles City Council members agreed Tuesday.

The council action, which directs city attorneys to draft the proposed rules, marks an important step toward approval of the first major exemption to a recently adopted plan to hike the minimum wage to $15 an hour by 2020.

Nonprofits such as Homeboy Industries, which helps train former inmates; Chrysalis, which works with the homeless and other disadvantaged clients; and the Los Angeles Conservation Corps have warned that, without the exemption, increased labor costs would require them to reduce the number of people they serve.

Earlier this year, Councilman Curren Price questioned why people who had faced challenges in their lives, including incarceration, should be paid less than other L.A. workers. The Los Angeles County Federation of Labor, which championed the minimum wage plan, also opposed the idea.

But Price ultimately backed the proposed exemption. He said he was moved by the pleas of workers being assisted by Homeboy and other nonprofits. Business groups such as the Los Angeles Area Chamber of Commerce also backed the proposal, along with Service Employees International Union Local 721, which represents tens of thousands of public workers.

“The exemption keeps these nonprofits on the right track of creating pathways for families to escape vicious cycles of poverty through a provision of training and support services,” SEIU Local 721 President Bob Schoonover said in a statement Tuesday.

City lawyers will present the language of the proposed exemption to lawmakers later this year.

L.A.’s minimum wage will increase to $10.50 in July 2016 and continue to increase gradually until it reaches $15 an hour in 2020. Small businesses and some nonprofits will get extra time to phase in the wage hikes. Future increases will be tied to the consumer price index.

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