Tough times are ahead for all California-based restaurants. A minimum wage initiative will be voted on this coming November which will elevate the state's minimum wage gradually from the current $10 an hour to $15 an hour.
A coalition named Lift Up America was able to secure enough signature from its members to qualify for a ballot on its wage proposal according to a Restaurant Business Online article by Peter Romeo. Under this proposal, the minimum wage, which is currently at $10 per hour, will be increased by $1 per year starting 2017 until it will reach it becomes $15 an hour by 2021. This minimum wage initiative, named Fair Wage Act of 2016", is backed by California's Service Employees International Union - United Healthcare Workers (SEIU-UHW) according to Ballotpedia.
However, there is a competing $15 per hour minimum wage initiative as well. A broader-based SEIU faction is still collecting the required signatures to put the initiated on the ballot according to Restaurant Business Online. Named "Raise California's Wage and Paid Sick Day Act of 2016", the initiative also requires business to give $15 an hour as minimum wage by 2020 while smaller business or those with below 25 employees will be given until 2021 to reach the minimum wage. In addition, it requires six paid sick leaves per year for each employee.
If the second proposal gets the required signatures, the initiative will get its chance to be voted on. However, if both proposals reach the ballot and are approved, the initiative with the most "Yes" votes will prevail according to Ballotpedia.
Regardless of which proposal gets the approval, it is seen as a severe blow to California's restaurants according to Restaurant Business Online. In addition, it would create a wider gap between the rates of servers and kitchen staff. Serving jobs are more lucrative because California does not have a tip credit and as a result, waiters and waitresses collect both full minimum wage and the tips from customers.
And the idea is not well-liked by some business groups who argues that such a high minimum wage would end up harming small businesses accord to a Fortune article by Reuters.
Research Director Michael Saltsman of the Employment Policies Institute calls in irresponsible. Saltsman says that the proposed massive jumps in minimum wage could no longer be viewed as impacting the businesses' margins. Instead, it could be the factor that determines whether a business stays open or should fold up.
