San Diego Scrambling To Plan For Minimum Wage Increase

With less than two weeks until San Diego’s minimum wage increase takes effect, many details are still left to figure out.

What will the penalties be for breaking the new law? Will the city proactively look for employers not paying enough, or wait for complaints from employees? What city office will be responsible for enforcing the law, and will that office need extra staff? Is the $400,000 budgeted this year to enforce the law enough to do outreach to employers and employees and hire extra staff?

Originally, the city would have had six months to figure all of this out.

When the City Council voted to raise the minimum wage in July 2014, the first increase wasn’t scheduled until January 2015.

But then business groups blocked the increase with a referendum, which went before voters on June 7. They overwhelmingly approved the minimum wage hike, with 63 percent supporting it.

That meant the city had about a month to get a system in place to enforce the law before the increase takes effect. Wages will rise from $10 to $10.50 an hour this month, and then again to $11.50 an hour on Jan. 1. In 2018, wages will rise again under a state law that gradually increases the minimum wage to $15 an hour by 2022.

The City Council is expected to vote on July 11 to certify the results of the June election and at the same time vote on an enforcement ordinance. A council committee last month discussed a list of items to include in the ordinance, including printing notices about the wage increase in multiple languages and adding fines of $1,000 to $3,000 for retaliation against employees who report being underpaid. A memo from City Attorney Jan Goldsmith lays out all the tasks the council has to do — set up an enforcement office, decide how to receive and investigate complaints. It also says the council could change the ordinance to allow businesses to cap the number of sick days an employee can take each year.

The city has begun to post some information about the new law on its website.

Businesses want more direction

On a recent warm morning, Juan Pablo Sanchez was working in his restaurant, Super Cocina in City Heights. He checked in with some of his 12 employees who were preparing for the lunchtime rush.

“Are you guys ready?” he asked. His employee nodded.

Sanchez is also getting ready for the minimum wage increase, but he said he isn’t sure what to do to follow the law.

“We need to know what’s going to happen so we can self enforce, so we can comply,” he said. “We do not have the resources, we do not have the information, we do not have the contact to be able to apply the law.”

He doesn’t even know what date the new law goes into effect.

“I have to call into my pay company and they don’t know the law, so I have to explain to them how it’s going to accrue,” he said. “Even my workers don’t know. I’m telling them their wages are going to increase.”

Sanchez’s family has owned Super Cocina for 27 years, and he’s been the owner since 2003.

His employees start at minimum wage and then their pay goes up after six months. They also get a week of paid vacation. The new city law requires he also give them five paid sick days, so Sanchez is figuring out that as well.

He supports raising the minimum wage — though he wishes the increase was countywide — but said so far he isn’t getting any direction from the city.

“I feel like small businesses are left out of these decisions, and are sometimes demonized and made to feel like the exploiters,” Sanchez said. “But in reality we’re very small, and we want to be able to comply and do everything right. And sometimes the fact that we don’t have all the information, we’re not being supported, makes us feel more left out.”

Proactive vs. complaint-driven approach

As the city works out what it’s doing, the San Diego nonprofit Center on Policy Initiatives is watching. It was heavily involved in passage of the original minimum wage and combating the referendum that blocked it the minimum wage increase, and now director Clare Crawford said they hope the city takes several enforcement steps, including putting up fliers in multiple languages, fining employers who don’t raise wages, and issuing greater penalties for “repeat offenders” and employers who retaliate against employees.

On the question of whether the city will look for lawbreakers or wait for complaints, Crawford said a proactive approach is essential.

“Complaint driven only gets you so far,” she said. For example, if one business owner hears about another who isn’t paying employees enough, she can report it instead of relying on employees to complain.

“If the city’s aware of it, they can go and take a proactive approach to investigating if they’re hearing that something is going on,” she said.

Crawford said many employers and employees still don’t know about the coming increase, or if they do know, they don’t know when it takes effect.

Some workers don't know about pay increase

Kris Arciaga

Roselva Gomez has earned minimum wage at Burger King for the last 2½ years. The 38-year-old has been working since 2001, first at Wendy’s and then at McDonald’s.

She’s been involved in the campaign for raising the minimum wage, so she knows her pay is going up. But, she said, some of her co-workers don’t know about they will be getting raises.

When the 50-cent increase takes effect, Gomez will take home $56 more each month.

“It’s good money to go buy some extra food or shoes or clothes,” she said.

Gomez has three teenage sons who always seem to be hungry. Her husband fell off a roof on the job three years ago and now can’t work.

While she knows the law, Gomez said she doesn’t know how to report employers who aren’t following the rules. Even now, when she’s asked to work through her breaks, she doesn’t know who to tell.

“It’s not good,” she said. “We work hard and we need respect.”

City staff are now scrambling to set up an outreach effort and enforcement system to be sure workers like Gomez get the pay they’re owed.