Minimum Wage Enforcement Ordinance placed on hold

By Aldrich M. Tan

April 13, 2006

Supervisors decided to continue the discussion over an ordinance to impose an annual fee to business owners in order to increase staffing to oversee the minimum wage ordinance in two weeks at the Budget and Finance Commission meeting on Wednesday.

The original ordinance implements an annual fee of $39 to help add staffing to the City's Office of Labor Standards Enforcement so that it can improve its ability to impose Proposition L, the Minimum Wage Ordinance, which established the local minimum wage at $8.50 per hour, indexed to inflation.

"If San Francisco is the progressive city that we claim it to be then we need to make sacrifices to make sure that everybody that makes this city great is paid rightfully," Supervisor Sophie Maxwell said

Passed in Nov. 2003, Prop. L promised to raise the income of the 54,000 lowest paid workers in San Francisco which includes a large group of immigrant residents, said Alex Tom, campaign coordinator for the Chinese Progressive Association.

The fine for disobeying the minimum wage ordinance is a penalty equal to $50 per day of underpayment in addition to a penalty of up to $50 per day paid to the city, OLSE representative Richard Waller said. Penalties of current cases could amount to over $2.5 million.

Since the proposition's passing, OLSE receives two cases per week by employees about unfair minimum wage policies, Waller said. The organization has only completed tackling 7 percent of the 124 claims that it is currently dealing with because of limited resources.

"It's a very timely process," Waller said. "We are getting numerous cases that are requesting for hearings and it is backing up in the pipeline. This legislation would give us the ability to move things forward in a timely fashion."

Meanwhile, minimum wage violations are still widespread, said Lily Wu, a Chinatown restaurant worker. Wu, who has been a resident of the United States for seven years and spoke to the Supervisors with a Chinese translator, said that many restaurants in Chinatown do not enforce minimum wage laws.

"Many of the workers in the kitchens like myself do not speak English well so it is hard for them to find any other types work," Wu said.

At such restaurants, immigrant workers meet the minimum wage requirements illegally through service tips, said Youqin Wu, a restaurant worker in Chinatown.
"Waiters work long hours and they literally rely on their tips to survive," Wu said. "Although there is a minimum wage law, there is not much outreach to strengthen the minimum wage enforcement."

Cultural and language barriers limit immigrant employee access to advocacy and seeking legal direct services, said Eloise Lee, a volunteer for the Filipino Community Center of the Excelsior neighborhood.

"The immigration status of such workers prevents them from going to government offices," said Terry Valen, Filipino Community Center organization director. "They are always going to be in hiding and that is why we need to help them enforce the minimum wage."

Jim Lazarus, senior vice president of the San Francisco Chamber of Commerce, said he does not support the ordinance. Lazarus said the ordinance will force law biding business owners to pay an extraneous subsidy.

"This ordinance be enforced through private enforcement and any organization or any individual can act on behalf on any employee to collect attorneys fee for the effort," Lazarus said. "Punish those who disobey the rules, not the 90 percent of people who do pay more than minimum wage."

Daniel Scherotter, executive chef of Palio D'Asti, restaurant in Sacramento Street, agreed with Lazarus.

"The only way you ware going to get there is if it puts the fear in the employers' minds that they are taken to court if you don't follow the law," Sherotter said.

Matthew Goldberg, staff attorney for the Legal Aid Society, said he disagreed with Lazarus' idea of private enforcement. Plaintiffs would never bring the cases forward themselves in the cases that Goldberg said he has looked at.

"Despite all the time and effort, we nearly do not have enough resources to get and help the people who suffer under violations of the minimum wage laws," Goldberg said. "With a staff of three or four people in my organization, there are not enough people to clearly invoke the legislation."

Supervisor Aaron Peskin said he was concerned that the ordinance's requests could be decreased. The ordinance's fees would establish 13 full-time positions in the office and reimburse a city attorney position.

"This is a doubling of the staff capacity in a short period of time" Peskin said. "I'm sure that you need help, but I'm not sure that you need that much help right now."

The committee motioned to continue the discussion over the minimum wage ordinance in two weeks. The discussion will include the possibility of establishing a sliding fee that rather than the grounded annual fee for all businesses, Supervisor Maxwell said.

"I hope that we will have the opportunity to weigh all these alternatives and see where they lead us," Maxwell said. "I'm willing to think about it again to look at all the alternatives and discuss this ordinance at a later time."

Supervisor Sean Elsbernd said he wanted more information about the pending cases and how much backpay is ultimately due to employees whose employers have violated the minimum wage ordinance.

Maxwell said she is determined to bring the ordinance up again for approval.

"Immigrant workers are the most abused as we look at immigration issues on a national scale," she said. "Our city has an obligation to protect them."

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