Santa Monica will make minor revisions to its minimum wage law in April following recommendations from a local working group.
When City Council passed the local minimum wage law in January, it specifically asked for additional discussion on a handful of details. The recommendations that will come before council on April 26 reflect that ongoing discussion, and staff said any impacts of the recent state action could also be discussed at that time.
Santa Monica’s minimum wage rules mirror those passed by Los Angeles. Wages will increase to $15 by 2020 with small increases occurring annually starting this year. Some small businesses and nonprofits will have an extended timeline, as will hotels that can show compliance would cause staff reductions or hours to be cut. The rules include a hotel minimum wage that would apply to non-union hotels, raising wages to $15.37 by 2017.
Local rules deviate from the regional model in several ways. Most significantly, Santa Monica has allowed unions to negotiate for other benefits in lieu of the minimum wage. Known as “supersession,” the rule allows unions to secure other benefits, such as additional time off, under a collective bargaining agreement. Local unions supported the rules, but supersession has been criticized for creating an unfair system that benefits unions by providing an additional tool to pressure non-union businesses to unionize.
Santa Monica also included a paid sick-leave provision and rules that allow first-time workers to be paid 85 percent of the minimum wage for 480 hours or up to six months as a means of facilitating seasonal employment.
In addition to passing the rules, Council established a working group that will continue discussion of several topics including service charges, first-time workers, sick days, employee protections, definitions of terms, education and eventual unification of Santa Monica’s different wage schedules.
Council asked for a review of a flat sick-day policy or variable by business size, details on the logistics of using sick time and ways to protect employees.
The working group recommends phasing in sick days (4 and 5 days for small large businesses in 2017, respectively, and 5 and 9 days for small and large businesses in 2018, respectively). Sick leave will accrue from date of employment but can’t be used for the first 90 days.
Education and enforcement
Council asked for a review of enforcement provisions, record keeping requirements, penalty provisions and best practices for education.
The working group clarified definitions for enforcement, allowed for fines of up to $100 but with the ability to triple. The city will review the ordinance in a year to evaluate its effectiveness and will model its policies on those already implemented in San Francisco.
Service charges and surcharges
Council asked for information on differentiating between hotel and non-hotel in service charges.
The working group added specificity to the rules, expanded some definitions, included “healthcare surcharge” and “benefits surcharge” in the service charge definition and use, removed regulations for other surcharges and added directions for use of healthcare surcharges.
Additional recommendations were for language drafted by the City Attorney to meet the group’s stated goal of ensuring any health care or benefit surcharge revenue is transparent to the worker and under his or her control, while attempting to accommodate existing health care plans that meet employees’ needs. The issue could also be revisited in a year.
Council asked for discussion of the potential impacts on youth employment, potential for increased job turnover and impacts to the businesses and City’s goal for Pier affordability without a seasonal exemption.
The working group recommended decreasing the hours in the exemption to match the state learner provision to 85 percent of the minimum wage for 160 hours.
Additional recommendations were for more information on some definitions and monitoring of the impacts to answer questions related to youth employment, job turnover, or pier affordability.
Council asked to align the different wage rates and ways to incorporate public testimony into the hotel hardship process without divulging private financial information.
The working group recommended aligning the Santa Monica hotel wage to the Los Angeles hotel wage on July 1, 2017, and aligning Santa Monica’s living wage for City contractors with hotel wages on July 1, 2018.
The April 26 update will also include information as available regarding the impact of the recent state decision to increase wages to $15 across California.
Voting members of the working group included Hunter Hall with the Santa Monica Neighborhood Restaurant Coalition, Stephen Sowards from Le Méridien Delfina Santa Monica Hotel, Jeremy Blasi with Unite Here Local 11, Sophia Cheng of the Restaurant Opportunities Center and resident Frank Gruber. Non-voting members were Jeff Klocke from Pacific Park, Santa Monica High School student Paloma Nicholas and Carl Hansen with the Santa Monica Chamber of Commerce.