While the City administers or supports a number of job placement programs, they were created and are operated to benefit Santa Monica residents. It is unlikely that employer needs could be met solely by referring Santa Monica residents and it would be unreasonably burdensome for the City to operate or support a hiring hall that serves the entire labor market. The City Attorney advises that such a provision would also provide opponents with a basis for legal challenge and could be difficult to defend. His reasoning was that a threshold based upon the number of employees could provide businesses close to the threshold with an incentive to lay off workers. Gross receipts is a readily accessible measure as businesses must report this figure to the City for business license tax purposes.
Opponents argue that gross receipts bear little relationship to profitability.
However, a profitability standard applicable to all businesses would be difficult to identify and administer. A hardship exemption is a feature of the proposed living wage measure. Presumably hardship will have to be demonstrated through some measurement of profitability. Staff is consulting CPAs regarding profitability measures. The City Attorney cautions that hardship exemptions must be very carefully formulated and administered to avoid legal pitfalls.