Restaurateurs to ask Sonoma City Council for more time on minimum wage increase

The Sonoma City Council on Monday will consider a plan to accelerate the state-mandated raising of the minimum wage to $15.

But a group of downtown restaurateurs are asking that the Council either stick to the State schedule or add a provision that takes into account tips when calculating wages.

The state minimum wage is currently $12 an hour for businesses with more than 25 employees. California will increase its minimum wage to $15 an hour for all businesses by 2023, phased in through $1-a-year increments.

On April 6, the City Council will discuss jumping to $15 by 2020 for businesses inside the city limits.

The restaurant owners have met several times with a Council sub-committee – made up of Mayor Amy Harrington and Councilmember Logan Harvey – to suggest alternate proposals and to ask for more time to adjust to the wage increase. The Chamber of Commerce on May 1 completed a survey of downtown businesses on the topic, and it, too, is expected to weigh in at Monday’s meeting.

The two alternatives proposed by restaurateurs involve either a so-called “tip credit” for servers who, they say, are already taking home anywhere from $25 to $60 an hour as a result of tips, or for a slowing down the acceleration to match or slightly stay ahead of the state schedule to $15.

For their servers, restaurant owners say the wage increase would mean they need to cover a 27 percent jump in wages. “And the increase is going to those employees who already make the most,” said Sondra Bernstein, owner of the Girl & the Fig restaurant at 110 W. Spain St.

Saul Gropman, owner of Café LaHaye at 140 E. Napa St., said the restaurant owners he knows aren’t against a $15 minimum wage, because they are either already paying it, or their employees are already getting more than that amount with tips. “What we’re against is the rapidity of how they want to speed this up,” Gropman told the Index-Tribune. “We need time to adjust. Doing this in one fell swoop is the issue for us.”

California is one of seven states that doesn’t have a tip credit as part of its minimum wage legislation – meaning employers here can’t count the tips received by an employee toward the payment of the state minimum wage. Many states allow restaurants to pay $2.13 an hour and allow tips to make up the balance of their pay.

The proposal for Sonoma to move to $15 an hour by 2020 – referred to as “15 by 20” by the plan’s supporters – was originally pitched to the council by the labor advocate group North Bay Jobs with Justice. The nonprofit “strongly opposes” a tip credit, according to its co-chair Martin Bennett, a Sonoma resident.

“Most restaurant workers are what we call ‘the working poor,’” he told the Index-Tribune this week, citing statistics that show full-time restaurants workers typically make just north of $20,000 a year.

But some in the Sonoma restaurant community contend that such general statistics don’t apply to downtown Sonoma. They say that restaurant workers in Sonoma already make more than restaurant workers in many other towns, and the majority work 25 hours a week or less.

Vince Albano, CEO of Mary’s Pizza, said that his employees, in particular, tend to be students and moms who want to work part-time.

Other critics of the plan question whether teenagers in their first jobs are worth $15 an hour.

“My biggest concern with this wage hike is that I won’t be able to hire kids anymore,” said Manuel Azevedo, owner of La Salette and Tasca Tasca. “And that’s something that I’m very passionate about.”

Azevedo says he “can’t justify” hiring for $15 an hour “a kid who comes in and applies for a job to work in a kitchen and has no skills, no experience.”

To that end, the proposal that North Bay Jobs with Justice has submitted to the City Council for consideration does propose that employees between age 14 to 17 who are considered a “learner” can be paid 85 percent of the minimum wage during their first 160 hours of on the job. The exemption doesn’t apply to adult workers with no experience.

Azevedo is also concerned about what he calls “wage compression,” or the ripple effect the new minimum wage will have on employees already earning at or just above $15.

“Let’s say I bring somebody inexperienced at $15 an hour,” said Azevedo. “The person I’m paying $17 an hour now is looking at me. This guy can barely show up on time. I’ve been here for three years and I’m only making $2 an hour more.”

Some restaurateurs say they may need to cut shifts or hire fewer servers.

“This bump they’re proposing is going to wipe out jobs and have a ripple effect,” said Albano.

“The servers are going to get a bump but it’s going to strangle my ability to pay my experienced kitchen staff (who already make $15) more,” said Azevedo. “Ironically, the people who this wage increase is supposed to help are going to be hurt by it.”

Bennett, however, says that recent studies conducted by the U.C. Berkeley Labor Center found that, after a similar minimum wage increase was implemented in San Jose and in San Francisco, there was no discernible job loss and only minimal price increases.

“Employers can adapt and adjust,” he said. “There might be slight price increases but the benefits include lower turnover, increased retention and better trained workers.”

Some of the restaurant owners said that, if they raise prices, they will lose diners to nearby cities or take-out.

But they also worry that if they reconfigure how they pay their team, and eliminate tips for a flat service charge, they’ll lose servers.

“Our servers are used to making $45, $50 an hour, so why wouldn’t they just go to Napa and get a job?,” said Bernstein.

“Sonoma doesn’t operate in a bubble,” said John Toulze, Bernstein’s business partner. “And we would be alone among our neighboring cities in having to come up with creative ways to pay this higher wage.”

“We’re making a living here, not making a killing,” said Gropman.

“Bottom line, this will cost jobs,” said Albano. “I mean go back in time… Service stations became gas station, the ATM replaced the teller. The grocery store can now be self-serve.”

The Sonoma City Council will discuss a proposal written by the North Bay Jobs with Justice, the results from the Chamber of Commerce survey as well as listen to arguments presented by local restaurant owners at its regularly scheduled meeting on Monday, May 6.

Bernstein said that the restaurant group has presented proposals to the Council that suggest a tip credit, similar what other states have, and time to adjust incrementally.

“The City Council’s argument is that this is all about affordable housing – how this solves affordable housing, I don’t know,” said Gropman. “$15 an hour is not going to get somebody in an apartment.”

“Why not continue this discussion for a few more months,” said Gropman. “This is important. Let’s not rush it.”

Sonoma Chamber of Commerce CEO Mark Bodenhamer said the key is collaborating to find a balanced solution.

“We all want to ensure that the people who work in Sonoma are paid fairly for their contributions to the local economy and the community,” he said, adding that “these are our friends and neighbors and people that we come across every day.”

“I think the collaborative efforts of the Council and business community will help finding that balance that takes care of those people and keeps our local economy strong and competitive,” he said.

Contact Lorna at lorna.sheridan@sonomanews.com.