Contrary to what many would have us believe, the economics in the state of California are still tenuous at best for many employers, especially small employers. Despite this fact, the California Assembly has reared its ugly head again and has passed Assembly Bill No. 10, introduced by Assembly Member Alejo (representing Salinas, Watsonville and Hollister). Assembly Bill 10 will now be sent on to the Senate where we can only hope that more rational heads will prevail.
Why am I upset about Assembly Bill 10 you ask? I'm upset because it raises the California Minimum Wage and provides for annual adjustments which may crush small employers. Yes, I understand (as the commentary to the bill stated) that gas prices were $3.25 the last time the minimum wage was raised; but that begs the question for many businesses: how do you remain in business when you can't afford help? The new bill raises the minimum wage, beginning January 1, 2014 to not less than $8.25/hour; on January 1, 2015 to not less than $8.75/hour; and again January 1, 2016 to not less than $9.25/hour. As if this weren't enough (approximately a 15 ½% increase for the next two and a half years), the bill thereafter provides an adjustment of the minimum wage beginning January 1, 2017 and every year thereafter to "maintain employee purchasing power." The automatically adjusted minimum wage would be calculated using the California Consumer Price Index. This new legislation specifically prohibits the Industrial Welfare Commission (that's the agency in charge of these things) from adjusting the minimum wage downward or upward, if the percentage of inflation from the previous year was negative.
Far be it from me to dictate what employers should pay, and I hope that all my clients are paying more than the minimum wage to their employees; but I bristle at the constant meddling of our politicians in the business end of a free enterprise system which should dictate that you pay what you need, to get the help that you require, presuming that business people know what they can afford and what they should pay to stay in business. I urge all business people to contact their elected representatives and voice their opinion about this matter. No one prohibits employers from paying more if you want to, but now you won't be able to pay less.
If you have any questions about this article or any other employment matters, please do not hesitate to contact me. If you enjoyed this article or found it informative please do not hesitate to forward it or share it with your friends and colleagues.
DAVID L. COHEN
2100 Northrop Avenue, Suite 900
Sacramento, California 95825
Telephone: (916) 927-8797
Fax: (916) 927-8798
We at SellingRestaurants feel obligated to educate the public, our customers and our clients with information that can help them make more intelligent buying and selling decisions.
Mel Jones is one of the premier restaurant brokers in the nation having published hundreds of articles on buying and selling a restaurant and bar business, selling thousands of restaurants in CA., WA and AZ and building one of the most copied business models in the brokerage industry. Mel started SellingRestaurants in 2004 with the one simple concept, give the buyers the information they need to make intelligent buying decisions without being pestered by a broker or hiding information, prepare the business for market by researching key details that make or break deals and educate the buyer on the buying process to create an intelligent buyer. Prior to SellingRestaurants, Mel was a Chief Financial Officer for Universal Music Group, the largest music company in the world. There he participated in more than $11.5 billion of merger and acquisition transactions. He also work for top companies such as Nestle Foods, USA. He hold a Bachelors in Business Administration Finance as well as attened Law School at Gonzaga University. Give Mel a call at 480.274.7000 or e-mail him at [email protected] if you have any questions.