SF’s simple approach to $15 minimum wage hike helps combat wage theft 

click to enlarge A proposal by Mayor Ed Lee to increase The City's minimum wage to $15 per hour would take four years to take effect and increases would be staggered based on business size.
  • A proposal by Mayor Ed Lee to increase The City's minimum wage to $15 per hour would take four years to take effect and increases would be staggered based on business size.

San Francisco's $15-per-hour minimum-wage proposal was made clear and simple by avoiding a staggered timeline and by not allowing employers to count some employee expenses toward the mandate. It is this simplicity that can also help combat wage theft.

Seattle's recently adopted $15 minimum wage takes seven years to implement -- San Francisco's would take four -- and increases are staggered based on business size. It also allows some employers to count expenses such as health care and tips toward the mandate.

Mayor Ed Lee offered a ballot measure proposal that takes a blanket approach without exceptions, after he reached a consensus with labor leaders and advocates who then dropped a previously proposed measure that could have reached the $15 rate a year earlier. The City's current minimum wage is $10.74 an hour.

In crafting the legislation as such, the mayor rebuffed requests by some business leaders for a more tailor-made approach.

"We had asked for a longer phase-in, we had asked for a carve-out for tipped workers and we had asked for the consideration of total compensation," said Gwyneth Borden, executive director of the Golden Gate Restaurant Association. "All three things were done in the mayor of Seattle's minimum-wage measure. We didn't think it was unreasonable to ask for those things."

But supporters of the wage hike said a rate without exceptions will more effectively help address San Francisco's income inequality. And keeping it simple also helps with enforcement.

"The more simple the law, the easier it is for workers to know their rights and employers to know their obligations, and therefore enforce the law," said Shaw San Liu, a workers-rights organizer with the Chinese Progressive Association who was involved in the compromise talks. The group helped pass Proposition L in November 2003, which made San Francisco's minimum wage the highest in the country.

"Complications, exemptions, credits, etc. confuse everyone," Liu added. "Also, once there is a complaint filed or a worker believes their rights are being violated, it complicates enforcement if advocates or enforcement agencies have to look through five different checklists to figure out which wage you are eligible for."

Wage theft is a constant concern and enforcement is complaint-driven. Between 2004 and 2013, the Office of Labor Standards and Enforcement received 643 complaints related to the minimum wage, of which nearly 50 percent were in the restaurant industry and 14 percent in retail and sales, according to a 2013 Wage Theft city task force report.

The labor office recovered more than $4.8 million for 2,761 employees who were denied minimum wage and overtime pay.

Victims interviewed by the task force revealed cases of earning as little as $2.50 per hour. One employee in a Chinatown restaurant worked five days a week, 10 hours a day and earned $1,000 a month. That's about $5 per hour. This went on for four years, and when he complained, his break time was decreased, according to the report.

A 2011 report by the Chinese Progressive Association on workers in Chinatown restaurants found that one out of every two workers was paid less than the minimum wage.

S.F.'s push for higher pay

How the hourly minimum wage proposal works under the November ballot measure, based on when increases take effect:

$10.74: San Francisco's current minimum wage

$12.25: May 1, 2015

$13: July 1, 2016

$14: July 1, 2017

$15: July 1, 2018

Note: After the final scheduled increase, increases starting July 1, 2019 will be based on the Consumer Price Index

Source: Mayor's Office

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