Chamber: Proposed wage laws spell trouble for small businesses

Tehachapi Chamber of Commerce President Ida Perkins has told the local business community that implementation of proposed California wage and sick leave Initiative 15-0105 would be devastating for small businesses.

If the initiative is placed on the ballot and approved by voters, she said that by the time of full implementation, “Most of our small businesses – they won’t be in existence.”

While a phased-in increase in minimum wage accommodates businesses with fewer than 25 employees at the first wage hike ($10.50 an hour on July 1, 2017 vs. $12 an hour on July 1, 2017 for businesses with 26 or more employees), “after a couple of years, it’s the same,” she said. Under the proposal, the larger businesses must reach a minimum wage of $15 an hour by July 1, 2020. The smaller businesses would have another year, until July 1, 2021, to reach $15 an hour.

After that, the minimum wage will increase by amounts corresponding to the California Consumer Price Index for Urban Wage Earners and Clerical Workers.

The wage hikes include in-home service workers and fast-food workers.

“Do they realize that what they’re going to do is cost them their job?” Perkins said at the Dec. 2, 2015 breakfast meeting of the Greater Tehachapi Economic Development Council (GTEDC) at the Tehachapi Police Department community room.

A hike in minimum wage increases the costs to employers by more than the dollar amount of the increase. Employers must pay an increased share of employee payroll taxes and unemployment insurance and other government mandates. The added costs can cripple small enterprises that squeak by on slim profit margins, notably mom-and-pop restaurants and non-profit child care centers.

Some cities in California, including Los Angeles, already have voted to increase minimum wage to $15 over a period several years (five years for LA).

The wage and sick leave Initiative 15-0105 was submitted to the state Attorney General on Nov. 3, 2015 by Shonda Roberts and Bruce Michael Boyer of the California State Council of Services Employees in Los Angeles. The GTEDC board agreed to send a letter of opposition to the Attorney General by the next day, Dec. 3, 2015, which was the end of the 30-day comment period.

The California minimum wage is $9 an hour. Effective Jan. 1, 2016, the state minimum wage increases to $10 an hour.