Baltimore's Local Hiring Law Needs Better Enforcement, Audit Finds

City Hall must bolster Baltimore’s local hiring ordinance enforcement to improve the law’s effectiveness, according to an audit presented Wednesday to the municipal spending board.

The Baltimore Department of Audits, which is part of the Comptroller’s Office, concluded the Mayor’s Office of Employment Development, which monitors compliance, lacked tools to compel contractors and developers to satisfy the city’s local hiring decrees.

“Compliance with Local Hiring laws shouldn’t be discretionary. Agencies need to show up as better partners with MOED by sharing their contracts timely so that they can meet with contractors as soon as the contract is awarded,” Comptroller Bill Henry said in a statement.  

Baltimore’s local hiring law requires firms awarded city contracts worth at least $300K and city-subsidized development projects valued at a minimum of $5M to have city residents make up at least 51% of new hires, with some exemptions.  

The statute also stipulates firms meet with the Employment Development Office within two weeks of awarding a contract to finish a local employment analysis and post new jobs with that department for at least seven days. Those companies must also submit employment reports detailing the number of workers and the number of city residents filling those jobs. 

According to the audit, the Office of Employment Development only sometimes met with companies within two weeks of conferring a contract. It also failed to demand and review monthly updates on the number of workers and city residents employed.

The audit includes criticisms of the processes used to certify that companies adhere to the law and restrictions on to whom the agency can report noncompliant companies. 

The audit faulted the system for putting the duty of ensuring a company’s compliance with the agencies that put a contract out for bid. Auditors also faulted regulations preventing the Office of Employment Development from reporting compliance issues to the Board of Estimates, which can approve contracts and debar firms from receiving future city contracts.

"Our audit concluded that a process does not exist to take action against contractors/subcontractors that do not meet the 51 percent local hiring requirement," the audit says. "Additional actions could include an improvement plan, identification of barriers to meeting the goal and/or reporting non-compliant contractor/subcontractors to the Board of Estimates (BOE) for potential penalties or debarment."

During the meeting, officials from the Mayor's Office of Employment Development concurred with the audit’s findings. They told Board of Estimates members the agency had adopted new processes and regulations and hired a compliance officer to fix issues discovered in the audit.