San Francisco may soon join Seattle in becoming the next major city to raise the minimum wage to $15 per hour.
A proposal to raise the minimum wage from the current $10.74 per hour to $15 per hour by July 2018 will be put before San Francisco voters in November under a deal announced by the mayor and the city’s board of supervisors on Tuesday.
The move comes a week after Seattle’s city council voted unanimously for a similar minimum wage hike with a phase-in plan over the next seven years.
Seattle’s wage hike is the target of a lawsuit filed Wednesday by the International Franchise Association and five franchise operators, who argued that the law illegally discriminates against smaller franchised businesses.
Under Seattle’s plan, the wage would go into effect for businesses with 500 or more employees by 2017, with an additional year to reach that rate if they provide health care.
Smaller businesses will have to reach the $15 per hour wage within seven years, though they will be allowed exemptions for some tips and health care benefits for up to 11 years.
The IFA’s lawsuit, filed in U.S. District Court in Seattle, contends that the Seattle statute will unfairly require franchisees to meet the earlier deadline for the wage hike because they are considered large businesses as part of a franchise network, rather than independent business owners.
In San Francisco, however, the proposed wage hike does not differentiate by size of business.
San Francisco has been a leader in increasing its minimum wage since 2004, when a wage hike to $8.50 per hour became the highest in the nation.
San Francisco mayor Edwin Lee described the proposal as a consensus measure supported by labor groups along with the city’s chamber of commerce.
“San Francisco is the most progressive city in America when it comes to addressing income inequality, and we are national leaders in our support of working families and low-wage earners,” Lee said, in a statement. “Working with Supervisor Jane Kim and the entire board of supervisors; large and small businesses; other employers, nonprofits, labor groups and those who represent working families, we are going to help our lowest paid workers by bringing a fair and responsible consensus measure to increase the minimum wage to voters.”
The proposed measure would raise the city’s minimum wage gradually to $11 per hour on Jan. 1, 2015; to $12.25 per hour by May 1, 2015; $13 per hour by July 1, 2016; $14 per hour by July 1, 2017; and $15 per hour by July 1, 2018.
A capped rate at $12.25 would be applied to youth trainees and senior subsidized workers. The wage hike would also allow for Consumer Price Index adjustments.
Under the deal, labor leaders agreed to drop an effort to raise the rate to $15 an hour by 2017, according to the San Francisco Chronicle.
Gwyneth Borden, executive director of the Golden Gate Restaurant Association, said she was very disappointed in the measure that will be before voters.
The association had been lobbying for slower implementation of the wage hike to alleviate the impact on small businesses, along with an exemption for tipped workers.
In addition, the GGRA had pushed for a total compensation calculation that would have given credit to employers who provide the required health care and sick leave benefits — similar to the way the minimum wage increase is structured in Seattle.
“This minimum wage proposal is void of the solutions proposed by the business community; it’s merely a compromise between the mayor and organized labor,” Borden said. “It is extremely frustrating when those most impacted by these laws are not part of the decision; even more so, as labor has collective bargaining agreements, so the minimum wage really doesn’t apply to them — just our members toiling to make ends meet.”
Pete Sittnick, managing partner of San Francisco restaurants Epic Roasthouse and Waterbar and chair of the GGRA’s board, noted that it’s not unusual for tipped workers to make more than $30 per hour in San Francisco, a vibrant city for dining out.
The minimum wage hike would further distance those tipped workers from back-of-the-house employees, Sittnick said.
“Increasing wages for tipped workers exacerbates income inequality in the restaurant industry,” he said.
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