Ann Arbor increases 'living wage' requirement for companies doing business with the city

Contractors and vendors doing business with the City of Ann Arbor, as of May 1, now must pay higher wages to ensure their employees are making a decent living.

Mayor John Hieftje said the city adopted the living wage ordinance to ensure companies getting city contracts pay fair wages.

Ryan J. Stanton | AnnArbor.com

City officials recently decided on a 1 percent living wage increase after examining federal poverty guidelines for 2011, said Dee Lumpkin, the city's procurement assistant.

The new living wage requirement has been set at $11.83 an hour for employers paying health insurance and $13.19 for employers not paying health insurance.

The city's living wage ordinance applies to companies awarded city contracts exceeding $10,000 in a 1-year period. Companies with fewer than five employees and nonprofits with fewer than 10 employees are exempt from the living wage requirements.

Mayor John Hieftje said the City Council adopted the living wage ordinance a decade ago in order to ensure companies getting city contracts pay fair wages.

"I doubt very much that there's a contractor around that would be qualified to take on a city contract that isn't paying at least the living wage," he said.

Some have questioned the legality of Ann Arbor's living wage ordinance, saying a Michigan Supreme Court decision may invalidate such arrangements.

Ryan J. Stanton covers government and politics for AnnArbor.com. Reach him at ryanstanton@annarbor.com or 734-623-2529. You also can follow him on Twitter or subscribe to AnnArbor.com's e-mail newsletters.