The clock was ticking toward July 1st, and there was a rush to implement the new hotel-worker-turned-all-city-worker ordinance fairly quickly. The vote was early May. Businesses on bi-weekly payrolls had just three pay periods to figure it all out. Businesses on a monthly payment schedule had to be set just about as quick as they learned about the policy.
The minimum wage would move from $15 to $16 per hour for all workers, including tipped workers who were making $50 or $80 per hour at reported by the owners of Catch, and that was going to affect all the restaurants and bars in the city and all the prices charged at every West Hollywood business.
There were two waiver applications. 1) to the minimum wage itself, and 2) to the vacation and sick pay pto side of the ordinance.
The banner of ‘minimum wage’ gets all the attention but thats like saying ‘gay.’
Imagine the word ‘gay’ that became the LGBT community, that became the LGBTQ community, that became the LGBTQI+ community.
So minimum wage is MW, then you have MW+V+S+FED+UN+MED+WC+CPI+.
That is minimum wage plus vacation and sick pay and federal matching taxes and unemployment insurance and medical benefits and workmen’s compensation all multiplied by CPI. Now do some of you get it? The discussion is not on the basic wage. The cost of a $20 wage is really $30. That worker at Subway will cost the employer $2 to make a sandwich if they make 15 sandwiches every hour,..that is 1 every 4 minutes for their whole shift. If they make less then 15 sandwiches an hour the labor cost alone per sandwich will be higher than that $2.. just labor, not the rent or the food or the health plan or the profit.
All the businesses would be required to give each employee up to 80 hours per year vacation time, and up to 96 hours a year paid sick leave. That comes out to about a month and a half of not working.
As an employer, I like to have employees who are indispensable. In my shop, BlockParty, I do not even know how to use the register and cannot see the screen. One of my opening lines in every interview is , “I’m the owner not the boss”. And I think my people are paid very well. Nobody has ever asked for a raise. Jim works with me almost 30 years, Ric is with us over 10 years while he still works at a showroom downtown, Nick is almost 7 years, Socrates almost 5 and JJ almost 4. Manny almost 4. Michael almost 3.
At BlockParty you don’t see more than three or four new faces a year. I love my staff and together we went through COVID delivering masks to residents when everybody stood 6 feet apart, when streets were shuttered, when sales were low. As a business we struggled and the wages all went up. But this ordinance, its vacation and sick pay waivers do not work for my business model. It did not work for Cedars-Sinai Medical Center either, who pleaded that this would affect the way they responded to emergency and trauma situations. They asked for a waiver. The City Council declined.
The reason I am not yet running for City Council is that I’m too angry at the stupidity of those people who think they serve all of us. Five of them never signed a paycheck. Three of them learning how workmen’s compensations affects the wages paid by employer. None of them (except Lauren Meister) concerned at putting West Hollywood businesses at a disadvantage. None of them (except Lauren Meister) concerned about localizing higher prices to residents, and giving higher wages to all those people who commute here and take those dollars back to spend in their own communities. Yes, that’s how we become Beverly Hills East and throw a few crumbs to the poor people stuck in their affordable housing or rent-controlled units.
First of all, some facts:
Businesses are still allowed to apply for a waiver of the minimum wage, or the vacation leave/sick pay provisions. If you did not apply and receive your waiver by July 1st you are required to abide by the rules till the waiver is issued. As of today, the City of West Hollywood has issued a total of two waivers on the minimum wage and 14 waivers on the vacation/sick pay. There are still 12 waivers in process being reviewed by City Staff or pending more information from the applicants.
That is not good news. The low number of waivers is because of the intimidating, threatening process where applicants are forced to send in tax returns, so City Hall can know how much your cost of goods sold, how much you make, how much you spend on meals. To apply for a waiver you might as well live in Russia and hand over all your information on how your business operates. And then you need to turn over three years of 941 forms. And then you need to humiliate your self and write a letter to all your employees divulging the blemishes in the business. Employers were treated like children who needed a sick note from the doctor to miss school. Few applied for those reasons.
While the Council had approved the first draft of the hotel worker ordinance in early spring, the rollout to other city businesses was not clear until mid-May, with an implementation date of July 1st. This rush to implement gave little notice to residents with home-based businesses and left most other businesses scrambling to adapt. While there were weekly Zoom meetings with Chamber members, a majority of the businesses in West Hollywood are not Chamber members. City Hall provided few at-large public meetings, very few communications city-wide that would help the City Council understand the impacts of the ordinance on all types of businesses.
The policy really penalizes the best employers, paying top dollar. If you pay an employee $100,000 all of a sudden you’re on the hook for an extra month and a half of vacation and sick pay. More than 10k per head. To be frank, if all employees are maids maybe that’s an answer. But people in key positions cannot afford to take a month and a half off vacation or sick … or they are not as important to that employer who has to figure a way out to replace them. And this ordinance forces every employer to find a way to make any employee replaceable. The policy invites employers to replace older, longer term employees who have worked their way up with lower-paid new workers who can do the same job.
One of the most ridiculous things about this new policy is that it applies to all home-based businesses. Are you an attorney working from home? Are you a real estate agent who has an assistant? Are you a caretaker for an elderly person? Are you a cleaning lady working for any West Hollywood homeowner? You are required by law to offer these same benefits. The penalty for non-compliance is $100 a day — a stiff penalty for somebody who was never in the loop. A senior who did not realize that she had to give her caretaker a month off paid. There were no waiver applications as of today for any of the above, not a single home-based business. Do you think this was properly noticed?
I think that when a City Council thinks commercial leases are the same type lease as their rental apartments. Three of our City Council members live in rent-controlled apartments. But that is not how commercial leases work. Sometimes the tenant has to put in the air-conditioning. Sometimes it takes two years to build out a place. At most all times the landlord is given a personal guarantee that can even have the deed to your house attached as collateral. Two weeks ago Council was discussing a vacancy tax on the landlord that would be placed after six months of vacancy. Why is it OK for it to take City Hall two years to process building applications but landlords should be penalized after six months? The idea went down but the whole discussion was ludicrous. The City Council just voted the highest sales tax in the nation, and the highest wage and vacation time in the nation, and was about to penalize a landlord for having an empty space. Really pathetic.
Anyway, applying for a waiver was agonizing. I had to face the truth. At first I told one manager about it and said that it wasn’t worth the effort, then I spoke to frustrated neighbors and other businesses and realized that everybody was just getting sick and cutting staff and raising prices.
One business owner told me about their letter to their staff which resulted in hurt feelings and dissention among their staff. Another told me that there were still paying back their rent from COVID and maybe it was time to shut their doors. The Chop Stop owner said it very well in his OP/ED. So I decided to apply and learn the ropes.
They forced my hand and didn’t give me the room to negotiate the obstacles in a timely manner. Sometimes the owner needs to keep a smile while road ahead has many obstacles. They took away my ability to have flex scheduling and provide incentives and forced us to lower our starting wage to offset the ordinance. We have to change the way we operate turning bonuses into vacation pay.
My letter to staff was posted for the past two weeks but has been removed – it is not meant to be a living document. I hope you had a chance to read about the hurdles owning a small business in West Hollywood.