The minimum wage will rise this year in 19 states, in some cases climbing far above the federal minimum rate of $7.25 an hour. The rates are rising in numerous cities, too. As that federal-local rate divide grows, states and local governments are finding they will have to take on the burden of enforcing their higher rates as well.
That is forcing officials to become more proactive by putting more investigators on the case or by legally challenging some of the methods employers are using to deal with the law. Less confrontational ways to ensure compliance such as outreach and education are also being stepped up.
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| ‘A number of cities are expanding enforcement. It fair to say we are at the forefront.’ |
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In early January, New York Gov. Mario Cuomo announced the creation of 200-person task force specifically to monitor compliance with the state’s $11 minimum wage. That rate is set to rise to $13 by the end of the year and to $15 by the end of 2018.
“With the first increase in the minimum wage now in effect, this new enforcement unit will ensure that workers are being paid what they earned, and employers who flaunt the law will be held accountable,” Cuomo said. The city also announced a new “public awareness campaign” to alert employers to the new rates.
The new enforcement unit will not involve new hires but will repurpose investigators from existing state agencies to “prioritize” enforcing the new wage and will work with “labor unions, industry groups and worker advocacy groups,” among others.
It will involve stiff penalties, too: Employers can be fined $3 an hour for every hour the state says they failed to pay the minimum wage in addition paying back wages.
Cities that have passed similar increases have to step up enforcement as well. Seattle, which has an $11 minimum wage, part of a phase-in to $15 minimum wage by 2019, doubled the budget for its Office of Labor Standards for 2017. That translated to an increase of $1.8 million and 13 additional positions. Mayor Edward Murray said the increase was needed to “effectively investigate complaints and enforce the city’s labor laws.”
“A number of cities are expanding enforcement. It fair to say we are at the forefront,” Elliott Bronstein, spokesman for the Seattle office, told the Washington Examiner. He noted that before 2015, the city didn’t even have a minimum wage. The state rate, currently $9, was used. Putting the city rate above that meant enforcement became the city’s responsibility. “We are busy with a number of investigations,” he said.
Also in early January, the San Diego City Attorney’s Office announced it was investigating a dozen local restaurants for false advertising after receiving consumer complaints that they had tacked surcharges onto tabs that were not mentioned on the menus.
The charges were reportedly added to compensate for the city’s increasing minimum wage to $11.50, up a dollar from last year’s rate of $10.50, which is the statewide minimum.
The California Restaurant Association defended the surcharge, saying that the restaurant needed to do it to make up for the higher labor costs.
“San Diego is not alone in this challenge and restaurants are not the first business to use a surcharge — many hotels and transportation providers also use a surcharge,” the association said in a statement to the Washington Examiner.
Others are taking a more measured approach. The Maine minimum wage rose to $9 this year and is set to rise to $10 by the end of the year. The state’s labor department announced in December it would hold off on enforcing the new minimum wage until at least February, arguing that many employers were confused about which workers it affected. The department said it would focus on education instead.
