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Council slashes minimum wage plan

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In a 6-3 vote, the San Diego City Council on Monday supported a proposal to raise the local minimum wage to $11.50 per hour by 2017, slashed from an initial proposal for $13.09, in hopes of gaining more support from the business community.

The proposal still faces reviews by the city attorney's office and at least one more public hearing, raising the possibility of even more modifications, before the City Council either passes it as an ordinance or puts it before the voters as a referendum on the November ballot.

"We're not going to do this quickly," said City Council President Todd Gloria. "We'll be back again."

Gloria said that there are still some components that he could be willing to amend, but added that in general he thinks the current proposal is something that most people can support.

"Will they support it? Maybe not," he said. "But if they won't, it's because they don't support any hike to the minimum wage."

The minimum wage is scheduled to rise statewide from $8 per hour to $9 as of July 1. Under the new proposal at City Hall, the local minimum wage would rise to $9.75 Jan. 1, $10.50 on Jan. 1, 2016, and $11.50 on Jan. 1, 2017, with annual adjustments for inflation starting in 2019.

The scaled-back proposal was enough to win over some critics of the previously proposed increase to $13.09, but many local businesses still object, particularly home health care services, who say they worry that their elderly clients won't be able to keep up with the wage increases, and restaurateurs, who say that the bulk of the benefits will go to their tipped workers.

Restaurants say that their tipped workers are purposely paid lower than other workers because they collect a large portion of their compensation through tips. If the minimum wage is raised, the employers said, it would only help those workers and not non-tipped workers, such as dishwashers and food preparers, many of whom are already making above the minimum wage.

State law prohibits employers from taking tips into account for the state minimum wage. But several suggested setting up a two-tier system, which would continue to pay tipped employees based on the state minimum while paying non-tipped workers the local minimum.

The city attorney's office has been asked to check into the legality of that kind of system.

"If a tip credit can be done legally, it makes a lot of sense so that the benefit of this won't go to people who are already getting $20 an hour through tips," said Councilmember Mark Kersey.

Kersey's other suggestions included allowing a lower "training wage" for teenagers just entering the workforce, who make up roughly 5 percent of minimum-wage workers; using a slower phase-in time for small businesses; or taking employer-provided benefits, such as health care payments, into account when calculating the minimum wage.

Such measures have been used in some other cities that have introduced their own minimum wages, such as Seattle, where the target of a $15 minimum wage is being phased in from 2017 to 2021, with different deadlines depending on business size, tips and benefits.

Gloria said he would be willing to consider making such changes, but he does not want the law to be so complex that it would take an army of lawyers or accountants to handle it. "That's the beauty of doing something simple," he said.

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