Brief

The Mayor's office initiated a contract with WageWorks, Inc. to provide administration services for tax-advantaged spending accounts available to City employees. These accounts allow workers to set aside pre-tax earnings for eligible healthcare and dependent care expenses. The Personnel and Hiring Committee approved the item on September 9, 2026, following a City Administrative Officer report dated July 21, 2026. The contract is designated C-135333.

Full summary

This file seeks retroactive Council approval for a one-year extension of the City's contract with WageWorks, Inc. to continue administering four tax-advantaged spending accounts for City employees through December 31, 2024: a Healthcare Flexible Spending Account, a Dependent Care Flexible Spending Account, a Transit Spending Account, and a Parking Spending Account. WageWorks charges a flat $3.00 per month per enrolled participant, with all costs funded entirely by those participant fees rather than the General Fund. The extension covers the calendar year 2024, bringing the total contract term to six years dating back to January 1, 2019. The need for a retroactive extension arose from two compounding delays. First, the Personnel Department was unable to complete a new competitive procurement before the prior agreement expired at the end of 2023 because it was simultaneously managing the City's transition from the PAYSR payroll system to Workday. Second, negotiations between WageWorks and the City Attorney's office on the Second Supplemental Agreement did not conclude until early December 2025, more than a year after the services had already been delivered. The Joint Labor Management Benefits Committee approved the retroactive extension at its December 2025 meeting, and the contract includes a ratification clause formally accepting the services WageWorks provided during 2024 before the agreement was signed. A new long-term contract for these services has since been awarded to Health Equity, Inc. and Fort Effect Corp dba Luum. The Personnel Department initiated the original WageWorks agreement through a competitive process launched in December 2017, and the CAO confirmed WageWorks has complied with all applicable City contracting requirements, including Charter Section 1022 findings that City employees lack the specialized expertise to perform this work in-house. Because the cumulative contract term exceeds five years and involves a service provider for the Deferred Compensation Plan, City Council approval is required under the Los Angeles Administrative Code. Mayor approval is also required because total compensation exceeds $25,000. The Mayor transmitted the matter to Council on August 18, 2026. The City Administrative Officer's report, prepared by analyst Kimberly Squire, recommended that Council authorize the Personnel Department General Manager to execute the Second Supplemental Agreement. The Personnel and Hiring Committee approved the item on September 9, 2026, and the file remains open pending full Council action.

Activity (4)

• 2026-09-09 Personnel and Hiring Committee approved item(s) .
• 2026-09-04 Personnel and Hiring Committee scheduled item for committee meeting on September 9, 2026.
• 2026-08-19 City Administrative Officer document(s) referred to Personnel and Hiring Committee.
• 2026-08-18 Document submitted by the Mayor, City Administrative Officer; Mayor report dated July 21, 2026.

Documents (3)

• 2026-09-09 Communication from Chair, Personnel and Hiring Committee · other
• 2026-09-09 Speaker Card(s) · speaker_card
• 2026-07-21 Report from City Administrative Officer · report