SAN FRANCISCO —Already scrambling to comply with a paid-sick-leave ordinance that took effect this month following a citywide spike in the hourly minimum wage to $9.14 in January, operators here also are fighting a municipal mandate for employer-funded universal health care beginning in July.
“Not counting the living wage—but between the health ordinances and paid sick leave, they say you can add up to six points onto your payroll expenses immediately,” said Tim Stannard, co-founder and managing director of the locally based Bacchus Restaurant Management Group. “For a lot of people, that is their profit margin—six points. It just evaporated.” —Already scrambling to comply with a paid-sick-leave ordinance that took effect this month following a citywide spike in the hourly minimum wage to $9.14 in January, operators here also are fighting a municipal mandate for employer-funded universal health care beginning in July.
Stannard’s company has four Bay Area restaurants and plans to open two more in San Francisco this year. —Already scrambling to comply with a paid-sick-leave ordinance that took effect this month following a citywide spike in the hourly minimum wage to $9.14 in January, operators here also are fighting a municipal mandate for employer-funded universal health care beginning in July.
Even without those onerous expenses, the cost of doing business has risen sharply in San Francisco, where rents are notoriously high and businesses are subject to a 1.5-percent tax on payrolls that exceed $166,667. —Already scrambling to comply with a paid-sick-leave ordinance that took effect this month following a citywide spike in the hourly minimum wage to $9.14 in January, operators here also are fighting a municipal mandate for employer-funded universal health care beginning in July.
While some operators in the city say they support the idea of raising health and living standards there, many restaurateurs say the ordinances and ballot measures are putting an unsustainable squeeze on profits. —Already scrambling to comply with a paid-sick-leave ordinance that took effect this month following a citywide spike in the hourly minimum wage to $9.14 in January, operators here also are fighting a municipal mandate for employer-funded universal health care beginning in July.
“We just don’t have the margins,” said Laurie Thomas, who owns three restaurants in San Francisco, including Rose Pistola, a 1996 James Beard Award honoree. “The minimum wage is the highest in the country, there’s no tip credit, rents goes up. We just can’t raise the price of food. People are not going to accept that. People from Iowa are not going to pay that much more.” —Already scrambling to comply with a paid-sick-leave ordinance that took effect this month following a citywide spike in the hourly minimum wage to $9.14 in January, operators here also are fighting a municipal mandate for employer-funded universal health care beginning in July.
Thomas is a member of the city’s Universal Health Care Council, and though she opposes an employer-funding formula, she supported the city’s Universal Health Access Program to provide medical insurance for San Francisco’s estimated 82,000 uncovered residents who do not qualify for Medicare or Medicaid. Eligible residents will pay a reduced enrollment fee, on average about $35 a month, and receive comprehensive primary care at the city’s public and private clinics and hospitals. —Already scrambling to comply with a paid-sick-leave ordinance that took effect this month following a citywide spike in the hourly minimum wage to $9.14 in January, operators here also are fighting a municipal mandate for employer-funded universal health care beginning in July.
San Francisco is the first municipality to establish a system for universal health coverage. The program, along with the mandated paid-leave ordinance, another first of its kind, have gained national attention as other states and the federal government wrestle with how to expand health care coverage. —Already scrambling to comply with a paid-sick-leave ordinance that took effect this month following a citywide spike in the hourly minimum wage to $9.14 in January, operators here also are fighting a municipal mandate for employer-funded universal health care beginning in July.
Voters in November approved the paid-leave measure, which went into effect Feb. 5, allowing full-time and part-time workers to accrue one hour of paid sick leave for every 30 hours worked. Employers with 10 or fewer workers must offer as many as five paid sick days per year, per employee. Larger employers must offer up to nine days per year. —Already scrambling to comply with a paid-sick-leave ordinance that took effect this month following a citywide spike in the hourly minimum wage to $9.14 in January, operators here also are fighting a municipal mandate for employer-funded universal health care beginning in July.
San Francisco’s universal-coverage system, scheduled to begin July 1, will cost about $200 million annually, with funds coming from the city, individuals and employers. The $104 million that San Francisco already spends on public health may be directed into the universal health access plan, the city indicated. —Already scrambling to comply with a paid-sick-leave ordinance that took effect this month following a citywide spike in the hourly minimum wage to $9.14 in January, operators here also are fighting a municipal mandate for employer-funded universal health care beginning in July.
However, restaurateur Thomas and other business owners have objected to a companion law—the Worker Health Care Security Ordinance—that dictates how much money businesses must pay into the program. —Already scrambling to comply with a paid-sick-leave ordinance that took effect this month following a citywide spike in the hourly minimum wage to $9.14 in January, operators here also are fighting a municipal mandate for employer-funded universal health care beginning in July.
“I want to be crystal-clear that I’m supportive of health care and the city’s plan,” said Thomas, who said she had received threats after speaking publicly about the security ordinance. “It’s just not very affordable for a restaurant.” —Already scrambling to comply with a paid-sick-leave ordinance that took effect this month following a citywide spike in the hourly minimum wage to $9.14 in January, operators here also are fighting a municipal mandate for employer-funded universal health care beginning in July.
The security measure calls for medium- and large-size employers in San Francisco to spend a minimum amount per hour on health care for workers who live in the city, whether full-time or part-time. For businesses with 50 to 99 employees, the rate is $1.11 an hour per employee. The rate rises to $1.17 in 2008 and $1.23 in 2009. Businesses with 20 to 49 employees will begin paying the $1.11 rate in 2008. Employers with 100 or more workers will pay $1.68 per hour this year, $1.76 in 2008 and $1.85 in 2009. —Already scrambling to comply with a paid-sick-leave ordinance that took effect this month following a citywide spike in the hourly minimum wage to $9.14 in January, operators here also are fighting a municipal mandate for employer-funded universal health care beginning in July.
On top of the hit posed by the city’s new $9.14 hourly minimum wage and paid-leave law, the health security mandate would be a business killer, operators say. —Already scrambling to comply with a paid-sick-leave ordinance that took effect this month following a citywide spike in the hourly minimum wage to $9.14 in January, operators here also are fighting a municipal mandate for employer-funded universal health care beginning in July.
“If it goes into effect, the cost for half a year will be another $50,000,” Thomas said. “I don’t have that kind of margin. The budget goes into the red.” —Already scrambling to comply with a paid-sick-leave ordinance that took effect this month following a citywide spike in the hourly minimum wage to $9.14 in January, operators here also are fighting a municipal mandate for employer-funded universal health care beginning in July.
The security ordinance would hit smaller businesses harder, said Greg Boro, human resources director for the 11-unit Max’s upscale-deli restaurants. —Already scrambling to comply with a paid-sick-leave ordinance that took effect this month following a citywide spike in the hourly minimum wage to $9.14 in January, operators here also are fighting a municipal mandate for employer-funded universal health care beginning in July.
“Unless you’re a Dow Jones industrial company, that would radically change how you do business,” Boro said. “We in the restaurant industry are not going to be able to pick up 100 percent of the expense. We will have to pass it on to our guests.” —Already scrambling to comply with a paid-sick-leave ordinance that took effect this month following a citywide spike in the hourly minimum wage to $9.14 in January, operators here also are fighting a municipal mandate for employer-funded universal health care beginning in July.
The Golden Gate Restaurant Association has gone to federal court in a bid to have the health security ordinance invalidated. In its lawsuit against the city, the 800-member GGRA contends that the ordinance violates existing federal laws pertaining to employer health care benefits. A settlement hearing is scheduled for March 30. —Already scrambling to comply with a paid-sick-leave ordinance that took effect this month following a citywide spike in the hourly minimum wage to $9.14 in January, operators here also are fighting a municipal mandate for employer-funded universal health care beginning in July.
“We believe it is illegal under the federal Employee Retirement Income Security Act, which basically says a state or local municipality cannot define a benefits program, otherwise you would have individualized programs an employer would have to administer differently all over the country,” GGRA executive director Kevin Westlye said. —Already scrambling to comply with a paid-sick-leave ordinance that took effect this month following a citywide spike in the hourly minimum wage to $9.14 in January, operators here also are fighting a municipal mandate for employer-funded universal health care beginning in July.
The GGRA cites as a cause for optimism the victory of a retail association in Maryland that successfully sued that state over a similar employer mandate for funding of a health care plan, Westlye said. In that case, an appellate court recently upheld a lower court’s ruling that invalidated the Maryland law, which sought to require employers with more than 10,000 statewide employees to spend 8 percent of total wages on health insurance costs. —Already scrambling to comply with a paid-sick-leave ordinance that took effect this month following a citywide spike in the hourly minimum wage to $9.14 in January, operators here also are fighting a municipal mandate for employer-funded universal health care beginning in July.
A spokesperson for San Francisco’s health plan declined to comment on the GGRA’s lawsuit. —Already scrambling to comply with a paid-sick-leave ordinance that took effect this month following a citywide spike in the hourly minimum wage to $9.14 in January, operators here also are fighting a municipal mandate for employer-funded universal health care beginning in July.
If victorious in court, the GGRA hopes to go back to city officials and work out what it said would be a more equitable solution for health plan funding. —Already scrambling to comply with a paid-sick-leave ordinance that took effect this month following a citywide spike in the hourly minimum wage to $9.14 in January, operators here also are fighting a municipal mandate for employer-funded universal health care beginning in July.
The GGRA has not challenged the city’s new mandatory paid-leave ordinance. —Already scrambling to comply with a paid-sick-leave ordinance that took effect this month following a citywide spike in the hourly minimum wage to $9.14 in January, operators here also are fighting a municipal mandate for employer-funded universal health care beginning in July.
“We took a look at it, as we always do on ordinances that have a major financial impact on our members, but this appears to be legal,” Westlye said. “[However,] I do think the administration of it is extremely onerous.” —Already scrambling to comply with a paid-sick-leave ordinance that took effect this month following a citywide spike in the hourly minimum wage to $9.14 in January, operators here also are fighting a municipal mandate for employer-funded universal health care beginning in July.
Most restaurants offer paid time off to full-time employees, but many would endure additional expenses to apply the sick pay to part-timers, he said. —Already scrambling to comply with a paid-sick-leave ordinance that took effect this month following a citywide spike in the hourly minimum wage to $9.14 in January, operators here also are fighting a municipal mandate for employer-funded universal health care beginning in July.
San Francisco Board of Supervisors member Chris Daly and the worker advocacy group Young Workers United was able to place the sick-pay measure on the November ballot by obtaining four supervisors’ signatures. The ballot method sidestepped what otherwise would have been public hearings at City Hall, Supervisor Sean Elsbernd said. Because he thinks businesses and the city have not had enough time to digest the new ordinance and determine how it will be administered, Elsbernd was seeking a 120-day grace period for compliance that would be retroactive to Feb. 5. —Already scrambling to comply with a paid-sick-leave ordinance that took effect this month following a citywide spike in the hourly minimum wage to $9.14 in January, operators here also are fighting a municipal mandate for employer-funded universal health care beginning in July.
