Labor

Localities should ensure that the limited jobs that data centers provide are high-quality, stable, and local.

Hiring

Localities should require data centers to hire full-time data center staff from the local population or partner with community organizations on first-source hiring programs. These employees should be directly employed by the data center operator and not hired as subcontractors. For construction jobs, localities should demand project labor agreements with a commitment that construction projects will employ local building trade union workers. Localities may also require prioritizing the hiring of underrepresented groups in specific industries or labor markets—such as women in construction or veterans.

Wages

Jobs should pay, at a minimum, a living wage adjusted annually for inflation. Ideally, wages should align with market-based standards tied to the state or regional median wage for the data center industry. There must be pay equity for equal work between contractors and the data center company’s own employees.

Benefits

Employers should be required to provide health insurance and cover at least 50 percent of the premium cost for each worker. Localities should also demand that data centers provide child care to all workers.

Health, Safety, and Well-being

Localities should regulate working conditions, including ensuring there is an adequate break room with strong health and safety standards.

Transparency

Localities should require data centers to give annual reports on labor demographic data, including number of full-time employees, subcontractors, and temporary workers. Include demographics such as race, gender identity, sexual orientation, education level, and pay and benefits data for each represented group. Include client overhead cost for the bill-rate per headcount of subcontracted worker, organized by job title.

There are four pathways that local policymakers can take to enshrine these demands into law.

Pass a County Labor Ordinance

Where it does not conflict with state or federal law, cities can pass labor ordinances codifying these provisions into law. This is the strongest possible vehicle because it would apply to all workers in a jurisdiction.

Require Job-Quality Standards as a Condition on Permitting Approval

As a next-best step, localities should condition permitting on data center proposals abiding by strong labor standards. Crucially, these must be legally binding and include a clawback provision that specifies failure to meet the agreed-upon standards will result in the revocation of the permit and certificate of occupancy. See Establish Conditional Use Permitting for Data Centers for more details.

Require Job-Quality Standards as a Condition of Tax Breaks or Subsidies

If attaching labor conditions to the conditional permitting process is not possible, localities can attach labor conditions to tax breaks where there is no conflict with state law. Note: This is less preferable to permitting because localities should repeal tax breaks for data centers. These must be legally binding and include a clawback provision that specifies failure to meet the agreed-upon standards will require repayment. See Repeal or Limit Tax Incentives and Subsidies for more details.

Institute Legally Binding Community Benefits Agreements

Labor conditions can also be attached to community benefits agreements (CBAs). This is the least preferable vehicle because CBAs are limited in scope and do not apply to all data center development projects within a community. See Considerations for Community Benefits Agreements for more details.

States should ensure that the limited jobs that data centers provide are high-quality, stable, and local.

Hiring

States should require data centers to hire full-time data center staff from the local population, or partner with community organizations on first-source hiring programs. These employees should be directly employed by the data center operator and not hired as subcontractors. For construction jobs, states should demand project labor agreements with a commitment that construction projects will employ local building-trade union workers. States may also require prioritizing the hiring of underrepresented groups in specific industries or labor markets—such as women in construction or veterans.

Wages

Jobs should pay, at a minimum, a living wage adjusted annually for inflation. Ideally, wages should align with market-based standards tied to the state or regional median wage for the data center industry. There must be pay equity for equal work between contractors and the data center company’s own employees.

Benefits

Employers should be required to provide health insurance and cover at least 50 percent of the premium cost for each worker. States should also demand that data centers provide child care to all workers.

Health, Safety, and Well-Being

States should regulate working conditions, including ensuring there is an adequate break room with strong health and safety standa

Collective Bargaining Neutrality

States must mandate neutrality in all firms benefiting from state subsidies.

Transparency

Localities should require data centers to report annually labor demographic data, including number of full-time employees, subcontractors, and temporary workers. Include demographics such as race, gender identity, sexual orientation, education level, and pay and benefits data for each represented group. Include client overhead cost for the bill-rate per headcount of subcontracted workers, organized by job title.

There are four pathways that state lawmakers can take to enshrine these demands into law.

Pass a State Law

Where it does not conflict with federal law, states can pass labor ordinances codifying these provisions into law. This is the strongest possible vehicle, since it would apply to all workers across the state.

Require Job-Quality Standards as a Condition on Permitting Approval

As a next-best step, states should condition permitting on data center proposals abiding by strong labor standards. While permitting is typically controlled by local jurisdictions, states can pass a law requiring certain conditions as a requirement for permitting. Crucially, these conditions must be legally binding and include a clawback provision that specifies failure to meet the agreed-upon standards will result in the revocation of permit and certificate of occupancy. See Establish Conditional Use Permitting for Data Centers for more details.

Require Job-Quality Standards as a Condition of Tax Breaks or Subsidies

If attaching labor conditions to the conditional permitting process is not possible, states can attach labor conditions to tax breaks. Note: This is less preferable than permitting because states should repeal tax breaks for data centers. These conditions must be legally binding and include a clawback provision that specifies that failure to meet the agreed-upon standards will require repayment. See Repeal or Limit Tax Incentives and Subsidies for more details.

Institute Legally Binding Community Benefits Agreements

Labor conditions can also be attached to community benefits agreements (CBAs). This is the least preferable vehicle because CBAs are limited in scope and do not apply to all data center development projects within a community. See Considerations for Community Benefits Agreements for more details.