City Beat

Sacramento task force recommends $12.50 minimum wage with exemptions

A task force appointed by Sacramento Mayor Kevin Johnson recommended Wednesday that the minimum wage in Sacramento be raised to $12.50 an hour by 2020.

The task force’s recommendation will be presented to the City Council for approval next month. The increase, which is lower than minimum wage laws approved in Los Angeles and San Francisco, would be phased in over the next five years.

The recommendation includes exemptions for “total compensation,” meaning employers can pay a lower hourly wage if they can prove their employees’ total pay is at least $15 an hour. That exemption is aimed specifically at businesses that have employees who earn tips on top of a base hourly wage.

While restaurant owners spoke favorably of the exemption, unions and groups representing low-income families said it would take advantage of some low-wage earners. Those groups also questioned the legality of the exemption, saying no other California city has enacted a total compensation clause in other minimum wage increases.

Other exemptions recommended by the task force include employees under the age of 18 and adult workers with developmental disabilities. The increase will include a delay for small businesses, but the timing of the delay and the size of the affected businesses is still being worked out.

Johnson said the proposal is “a balanced plan.”

“No one received everything they wanted,” he said.

The recommendations were made by a 15-member panel of council members, business group leaders, union representatives and policy experts. That task force held three public and three private meetings this summer as it explored raising the minimum wage.

“We knew it had to be a hard-fought compromise to get something done and to get something the City Council would accept,” said Councilman Jay Schenirer, one of the task force chairs.

A task force meeting at City Hall, where the recommendations were made public, turned tense when low-income workers and union members stormed out of the council chambers after the proposed wage was shown on an overhead screen. Protesters yelled “shame” and chanted, “What do we want? Fifteen. When do we want it? Now.”

Shellby Lippencott, 22, who works part-time at Dollar Tree and Taco Bell, was restrained by friends as she yelled at members of the task force. She said she makes $9 an hour at her jobs and supports a 3-year-old daughter.

“(The task force) let CEOs and business talk and they say what we say are sob stories,” she said in an interview. “But it’s not. It’s what we’re going through.”

The minimum wage in Sacramento is $9 an hour, but will increase along with the state minimum to $10 an hour on Jan. 1.

A poll commissioned by labor groups advocating for a $15 an hour minimum rate showed 58 percent of those polled support raising wages to that figure over a three-year period. Support for a $13.50 minimum wage was 70 percent, according to the poll.

Some of the state’s largest cities have approved more aggressive minimum wage increases.

San Francisco will hit $15 in 2018, Los Angeles is phasing in a five-year increase to $15 an hour, and the University of California system intends to raise its minimum wage to $15 by 2017.

But other California cities have targeted lower numbers. Oakland raised its rate to $12.25 earlier this year, with annual cost of living increases, and San Diego plans to raise its rate to $11.50 by 2017.

Sacramento’s rate would increase after 2020 in hikes linked to the consumer price index, the mayor said.

Labor leaders in Sacramento have pushed for months for a $15-an-hour minimum wage in the city and have said they would potentially go to the ballot if a path to that figure did not materialize.

Fabrizio Sasso, executive director of the Sacramento Central Labor Council and a task force member, would not say Wednesday whether his organization would seek a ballot measure, but said “our fight continues.”

“While I believe today’s recommendation is unfair and it’s an unfair deal for tens of thousands of low-wage workers in this city, what we can say is something happened,” Sasso said, reading from prepared remarks outside City Hall. “We moved the ball forward and some people will get some relief, but not enough to lift them out of poverty or to truly address income equality in Sacramento.”

Some local restaurant owners attended Wednesday’s hearing and generally spoke in favor of the recommendations. They said the total compensation exemption would allow them to pay chefs and other “back of the house” workers a higher wage without being required to increase the wages for servers who already make above the minimum wage when tips are factored into overall pay.

“There’s not necessarily the sticker shock (with the recommendation), compared with what we’ve seen in other markets,” said Chris Jarosz, owner of Broderick Roadhouse and the president of the local chapter of the California Restaurant Association.

Peter Tateishi, president and CEO of the Sacramento Metro Chamber of Commerce and a task force member, said the chamber has “very serious concerns” with the $12.50 an hour figure. But, he said, the business group did not present a number it preferred.

Tateishi said he supported the task force recommendation to review the minimum wage increases on an annual basis.

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