This clause imposes a requirement that workers employed in connection with real estate operations, development, or management must be paid at least a "living wage"—typically defined as compensation sufficient to meet basic living expenses in the relevant geographic area, which is usually higher than the statutory minimum wage. In real estate contexts, this often applies to construction workers, property maintenance staff, security personnel, and other on-site workers. The clause may require the contracting party to ensure that all direct employees and subcontractors' employees meet this wage threshold, and it may include provisions for annual adjustments to account for inflation or changes in cost of living. This matters because it creates ongoing wage obligations that exceed legal minimums, increases labor costs, may limit your choice of contractors or subcontractors, and exposes you to breach claims if wage requirements are not met.
Obtain a clear definition of "living wage" in the specific geographic area(s) where the real estate project operates, including how it will be calculated and adjusted annually. Determine whether the requirement applies only to your direct employees or extends to all subcontractors and their workers—if the latter, you'll need contractual provisions requiring subcontractors to comply and mechanisms to verify compliance. Calculate the cost impact on your project budget and timeline, and negotiate whether the other party will adjust contract price or timeline if living wage requirements increase significantly. Consider whether you can satisfy the requirement through benefits, bonuses, or other compensation structures, or whether it must be base hourly/salary wages.
Frequently Asked Questions
What does this clause mean in simple terms?
This clause imposes a requirement that workers employed in connection with real estate operations, development, or management must be paid at least a "living wage"—typically defined as compensation sufficient to meet basic living expenses in the relevant geographic area, which is usually higher than the statutory minimum wage.
Why should I care about this clause?
In real estate contexts, this often applies to construction workers, property maintenance staff, security personnel, and other on-site workers.
What are my options?
The clause may require the contracting party to ensure that all direct employees and subcontractors' employees meet this wage threshold, and it may include provisions for annual adjustments to account for inflation or changes in cost of living.
How does this affect small businesses?
This matters because it creates ongoing wage obligations that exceed legal minimums, increases labor costs, may limit your choice of contractors or subcontractors, and exposes you to breach claims if wage requirements are not met.