Minneapolis leaders on Tuesday presented details of their plan to require a $15 minimum wage, a step that would affect hundreds of businesses and thousands of workers in the city.
The proposed ordinance, which still needs a public hearing and a final council vote, gives employers five years to increase workers’ pay to $15 an hour. It includes a “training wage” exception for younger workers starting jobs, but does not allow employers to count tips as wages. Businesses that don’t comply could face thousands of dollars in fines.
Key questions remain, however, about phasing in the wage increase. Council members were split Tuesday on how quickly to require businesses of different sizes to comply.
“We’re in a zone where we have a few differences of opinion,” said Council Member Elizabeth Glidden, who proposed language that would require businesses of all sizes to pay $15 by the summer of 2022. She acknowledged her proposal was a placeholder to spark discussion.
No city in the United States has a $15 minimum wage for all businesses yet, but if Minneapolis approves the proposal, it would join a few cities that have passed similar measures, including San Francisco and Seattle.
Businesses in San Francisco will be required to pay $15 per hour by the summer of 2018. In Seattle, businesses with more than 500 employees started paying $15 per hour in January, but smaller businesses have until 2019 to meet the requirement, and tips will count toward wages in that city until 2025.
Glidden’s proposal, approved by the council’s Committee of the Whole, gives all businesses five years to reach the $15 per hour minimum.
But it requires businesses with more than 100 employees to boost wages more quickly, while smaller businesses would start with more gradual increases before a steeper bump at the end of the phase-in.
Council Members Alondra Cano and Cam Gordon said they prefer a four-year timeline for all businesses, but said they could support the five-year plan if all workers are included. Council Members Jacob Frey and Barb Johnson said they think small businesses should get more time than large ones.
No tips as wages
In Minneapolis, the question of counting tips as wages has sparked fierce debate, and the draft ordinance says “no employer may directly or indirectly credit, apply, or utilize gratuities towards payment of the minimum wage.”
The crowd at City Hall for the meeting included servers and bartenders, 15 Now advocates, union leaders and small business owners.
“It’s a good step in the right direction,” said Alee Schmierer, a server at Domo Gastro who lives in south Minneapolis and was there with 15 Now advocates to push for a $15 wage. But she also said, “I do think that small businesses should get a little bit more time.”
Jen Schnellenberg, a bartender at the Red Rabbit who’s been pushing for tips to be counted as wages, said without such a provision, her wages will be cut in half as restaurants and bars are forced to change their business model.
“We can do $15 an hour in Minneapolis, but we don’t want to be the victims of a one-size-fits-all approach that doesn’t recognize the uniqueness of our profession,” she said.
Robin Anderson, owner of Linden Hills Child Care Center, attended two of the city’s minimum wage listening sessions and sat in back of the room as the City Council discussed its next move.
A single mother of two, Anderson worked at the day care for 20 years before buying it five years ago.
Talk of a different phase-in for small businesses did not impress her.
“It’s still going to happen. And where does that stop? Is $15 not enough? What about $25? Hell, why not $50?” she said.
She doesn’t know exactly how a $15 minimum wage will play out for her business, but she’ll probably have to pass the cost to families, and she’d consider moving from her location in a church basement.
“Just the thought that ten blocks away is the line with Edina would be frustrating to me,” she said.
Support for businesses
Council Members Lisa Bender and Johnson said it’s important for the city to focus on helping small businesses.
“We really need to put our full support behind the new Small Business Office,” Bender said. “We need to make sure that that’s getting implemented meaningfully, that we’re really sitting down with small businesses and hearing what are the creative ways that we as a city can put more resources and energy and time into working together with our business community.”
Johnson said the city has done a lot to make life difficult for small businesses in recent years by banning Styrofoam, requiring convenience stores to sell a long list of items, trying to ban plastic bags and requiring paid sick leave.
“We’ve done these all for reasons that are important, but I think we have to think about what we’ve done and not think that we’ve made it all good by putting two navigators in place to deal with the issues that, a lot of them, we’ve created ourselves,” Johnson said. “I think we can assuage our consciences as a city by talking a lot about how we’re concerned about small businesses and how we want to move on to treat them and respect them.”
Penalties spelled out
The penalties for not paying the minimum wage are also laid out in the draft.
Beyond back pay, restitution and reimbursement of city expenses for enforcement, the city would be able to fine an employer “who is found to have repeatedly or willfully violated this article” up to $1,000 for each violation for each employee.
Other fines would punish employers who don’t post notice of the minimum wage, fail to keep records, or who retaliate against employees who ask about or report minimum wage violations.
Enforcement would be handled by the Minneapolis Department of Civil Rights.