How to Use It
Because local hiring agreements are tied to economic development, the first step to creating a local hiring initiative is accurately assessing the state of economic development in the target area. Is there one very large project in the works? Are companies being attracted to the area by location incentives, city contracts, or other public money?
Why Assess?An assessment of job skills, employment history, and educational attainment among local residents will give policymakers a realistic understanding of the number of un- and under-employed residents in need of employment assistance. It is also helpful to those designing the initiative.
Before embarking on any local hiring initiative, it is critical to assess the job skills, employment history, and educational attainment of local residents. This gives policymakers a realistic understanding of the number of un- and under-employed residents in need of employment assistance.
Local hiring initiatives come in two basic forms:
There are many things to take into consideration when choosing which form to pursue. The decision will depend on a community's needs, and also its organizing capacity.
Both ordinances and community benefits agreements need to be carefully structured to make requirements both clear and achievable. Here are the basic components of most local hiring initiatives:
Percent set asides are the percentage of total hours worked or total employees hired that must be residents of the target area. Percent hiring goals generally vary from 10 to 50 percent, though there have been policies with 100 percent requirements, like Wyoming 's statewide policy (discussed in Challenges ). The percent set aside should match the needs determined in the assessment process; goals that reflect documented community need will receive more political support and will better withstand lawsuits.
Who, What, Where, WhenAny local hiring ordinance or agreement needs to define who must participate, what they need to do, where local hires must live, and when companies must report on their progress.
This is the area whose residents qualify as local hires to fulfill the set-aside. Usually it will be the city or municipality, but it can also be smaller - a defined subset of the city, or a certain radius around a development. It can even be as broad as a whole state.
Thresholds are criteria used to determine which development projects will be required to participate in the local hiring program. They are only necessary for ordinances, since project agreements generally to a single project. Thresholds can be set for a combination of the following criteria:
There are two ways to define whether a business is complying with a set-aside requirement:
Two Approaches to Set Asides and ComplianceOakland CA's Local Construction Employments Referral Program requires that 50 percent of work hours on a given project be performed by Oakland residents and that 50 percent of new hires be Oakland residents. This is a mandatory requirement.
A community benefits agreement for the Alameda Corridor in Southern CA set out a goal of corridor residents performing at least 30 percent of all project work hours, and graduates of the program's apprenticeship course performing at least 30 percent of that resident set-aside. Firms working on this project will not loose their contracts if they do meet this goal, but they will loose their contract or suffer severe penalties if they are determined to not be maintaining a "good faith" effort.
Once compliance is clearly defined, real punishments must be levied when businesses are found to be out of compliance. These firms are already receiving many carrots, in the form of economic subsidies; without clear sticks, they cannot be expected to comply.
These firms are already receiving many carrots, in the form of economic subsidies; without clear sticks, they cannot be expected to comply.
Effective enforcement requires, first and foremost, that a plan for monitoring business activities be included in the ordinance or agreement itself. All parties must agree to specific reporting and monitoring obligations for each party, which may include weekly, monthly, or quarterly reports of a firm's job hires, periodic site visits by the enforcement agency, or access to all job announcements released by the firm. These obligations should include, at a minimum, that contractors are required to submit payroll records and tallies of employee work hours, broken down by residency of the employee. Oakland has the further requirement that prime and sub contractors meet within five days of awarding a contract to outline anticipated workforce composition and a strategy for meeting required numbers of new local hires.
Once a set of concrete methods for measuring compliance have been determined, programs must develop enforcement mechanisms that exact significant cost to ensure firms' compliance with program requirements. Enforcement should be progressive because, as the National Employment Law Project says, "the imposition of a fine can facilitate compliance, while the termination of a contract makes compliance impossible." Oakland sanctions contractors who are not in compliance $1,000/day or 1 percent of the contract, whichever is less. This results in an 80-90 percent compliance rate. Oakland also offers "alternative penalty resolution," where a contractor may reduce its penalty by hiring Oakland residents for non-city projects within the Bay Area.
Enforcement MechanismEnforcement mechanisms are used to punish firms that have either failed to make a good faith effort or who are out of compliance for other reasons. They can include:
Although in theory a local hiring initiative can be complete with only requirements and enforcement, components to connect local residents with participating businesses are essential to an initiative's success. First-Source Programs (FSPs) are one of the most successful ways of realizing local hiring goals and requirements. FSPs create an institutional structure that is intentional about providing employment opportunities to targeted populations. Participating businesses are required to give first notice of job openings to the FSP. This usually means they are required to post all job openings to a central clearinghouse (either run by the city or a nonprofit) for a designated period of time before opening up the position to the general public. The clearinghouse screens and keeps extensive records of local residents, and refers those with appropriate experience.
A thorough local hiring initiative includes apprenticeship and training programs for local job seekers. Ideally, these programs are run with the support of local employers and labor unions and turn into full time positions. These programs anticipate potential barriers facing prospective workers and provide appropriate support services to ensure adequate child-care, transportation, language skills, and access to licenses, tools, or union fees.
In order to reach eligible local workers, local hiring initiatives need multiple recruitment and outreach strategies. Community colleges, nonprofit referral agencies, faith institutions, and community based organization training programs are all potential partners. Oakland's Local Construction Employment and Referral Program (LCERP) contracts with over 35 community groups for workforce development and outreach. Once residents have been identified (and frequently trained) by local groups, they are referred to LCERP, where their skills are assessed and they are assigned to a local union hall where they are dispatched out to individual jobs.
Recruitment and outreach will likely be a less formal process for community benefits project agreements than it is for infrastructure-rich jurisdiction-wide ordinances.
Recruitment and outreach will likely be a less formal process for community benefits project agreements than it is for infrastructure-rich jurisdiction-wide ordinances. The community and resident groups that organize and fight for a community benefits agreement often do not have the same level of resources, knowledge, or capacity to operate a local hiring program as a city government. This was the scenario that faced the coalition of groups who won the milestone Staples Center community benefits agreement in the Figueroa Corridor in September 2001. The agreement they won promised residents around 5,000 permanent jobs over the following seven years - but how those positions would be filled was not included in the text of the agreement.
Rather than try to replicate other jobs training and recruitment program, the coalition decided to get meaningful resident input in designing a plan for recruiting and training local residents to fill the set aside provisions. In Fall 2002, the coalition will hold a for-credit seminar for community leaders at the local community college. About thirty grassroots resident leaders will take this class, which will culminate in a jobs recruitment and training plan that the class will propose to the president of the community college, developers, funders, and local politicians.
Having chosen a strategy, and considered the various components that would make sense for their community, advocates then need to garner support and input from all of the Key Players, and organize to reach an agreement or pass an ordinance. Having the support and early involvement of all the stakeholders, especially residents, will be key to success here. Involve the community, build alliances with labor, and contact local policymakers. Depending on the climate and the community, a full range of community organizing and advocacy techniques can be employed. [For help, see the Center for Community Change.]
Even a program with a good enforcement mechanism should be watched by community advocates to ensure it is meeting its goals, and to suggest changes and improvements. Community groups involved with passing a local ordinance should look for a way to include themselves in the monitoring process, or at least for there to be some public accountability of the results.