Austin's living wage audit found gaps in contract paperwork. The city's follow-up found one underpaid worker

City departments are not consistently checking whether contractors pay their workers Austin's required living wage, the City Auditor's Office told council members last week. The audit drew coverage from KVUE and a mention in the Austin Chronicle's weekly roundup, which reported that 15 of 285 contract employees reviewed may not have been paid as required.

The recording of the Oct. 21 briefing adds what happened next. After the auditors flagged those 15 workers, Austin Financial Services looked into each case. It found one instance of noncompliance and told auditors the wage had been corrected and back pay issued.

That matters to workers who clean city buildings, mow city land or fix city vehicles under contract. It also matters to taxpayers, because the program is the city's main check that its contracts meet its own wage floor.

What the program does

Austin created its living wage program in 2016. It covers city contracts for services other than construction, including janitorial, landscaping and automotive repair work. The current rate is $22.15 an hour, staff told the committee.

Compliance runs on two forms. Contractors sign a certification when they bid. Their employees sign a form with the first invoice and once a year after that. Contract managers in each department collect the forms, and Financial Services investigates pay complaints.

What the auditors found

The audit sampled 59 living wage contracts. According to the auditor's presentation:

• Contractor certification forms were missing for 15% of the sampled contracts.
• Employee certification forms were missing for 46% of the sampled employees.
• Random spot checks were done inconsistently.

The auditor in charge said the only training staff get on the program is one part of a general purchasing refresher. Some contract managers did not know what the contractor form was, or that monitoring was their department's job. Program guidance also does not clearly say which employees are exempt, which has led to disagreements between Financial Services and contract managers.

The audit also observed that monitoring treats every covered worker the same. In the sample, 65% earned more than $25 an hour, well above the floor. Contract managers told auditors that checking those workers as closely as lower-paid ones was inefficient. City Auditor Jason Davis said the point was to let staff focus on employees closer to the living wage.

The audit's one recommendation is that the director of Financial Services improve training and guidance for staff who monitor these contracts.

What our records add

What council members said. One committee member said the low rate of confirmed violations showed the program's goal was being met, while supporting closer monitoring. Asked about construction work, a Financial Services official explained that the program covers only non-construction contracts. Construction workers fall under separate state and federal prevailing wage rules.

A question about the rate itself. During public communication at the start of the meeting, a remote speaker argued that the most recent increase to the living wage did not keep pace with inflation. The committee did not take up the rate at that meeting.

The auditor's other work. The same committee forwarded the auditor's 2027 audit plan to the full council that day. Our story on the audit plan covers what the office plans to examine next, including police oversight and road resurfacing.

What's next

The Chronicle reported that Austin Financial Services plans a new sourcing and contract management system in fiscal year 2027, which the department said should help with monitoring. The audit report is posted on the City Auditor's site.

The full briefing, including questions from members, is on our Oct. 21 meeting page.