Otago Regional Council (ORC) is considering formal accreditation as a living wage employer - a move that would extend its existing living wage policy to include regular contractors.

At a full council meeting held in Oamaru on Wednesday (July 23), councillors received a report outlining the potential benefits and risks of accreditation. 

ORC already pays all directly employed staff, bus drivers, and cleaning contractors at or above the current living wage of $27.80 - a rate that is set to rise to $28.95 on September 1.

Accreditation through the Living Wage Movement Aotearoa would formalise that commitment and require all regular contractors and sub-contractors, such as those involved in parks maintenance, catering, and transport, to also be paid at least the living wage.

The accreditation comes with an annual fee of $1,500.

In a report presented to councillors at the meeting, ORC corporate general manager Tami Sargeant noted potential benefits could include improved staff retention, service reliability, and alignment with the council’s people strategy and social responsibility goals. 

It also highlighted risks, such as increased operational costs, the need to renegotiate existing contracts, and the complexity of monitoring compliance.

“The implications of extending (the living wage) to all relevant contractors and sub-contractors are unknown,” the report said.

Examples from other councils, including Environment Canterbury and Greater Wellington Regional Council, suggest accreditation can improve morale and service outcomes, though challenges remain in applying the wage policy consistently across a wide range of contractors.

Some councillors raised concerns about the lack of detail in the report.

Councillor Michael Laws questioned the absence of financial analysis, saying: “I’ve got no costings here. I don’t know what the implications would be for ratepayers”. 

He also asked how many contractors would be affected - “dozens, scores or hundreds?”

ORC chief executive Richard Saunders replied: “I genuinely don’t know”. 

He clarified the report was intended as an early step: “We haven’t gone through a thorough assessment”.

While the bulk of councillors supported the principle of paying a living wage, there was less enthusiasm for pursuing formal accreditation, especially without hard and fast numbers in front of them. 

Councillor Tim Mepham said: “I don’t support accreditation; I do support the council paying a living wage.” 

Councillor Micahel Laws added: “Actions speak louder than words - and they certainly speak louder than accreditation.” 

Councillor Alexa Forbes noted the timing and lack of cost detail: “I am struggling at this point in the triennium to go forward with an accreditation that we don’t know what the costs are”.

Councillor Gary Kelliher warned that requiring all contractors to meet living wage standards could reduce the number willing to work with council and risked amplifying “the vacuum that local government tends to sit in, separate to the rest of the country”.

Following discussion and a failed motion by councillor Alan Somerville to proceed with living wage accreditation, the council instead opted for a more cautious approach.

Councillors ultimately voted to direct staff to report back with a draft implementation plan, including cost estimates and details on how the council could meet the accreditation criteria. 

The carried motion asked for a plan the council could discuss rather than commit to, although the vote was narrow.

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