GOLDEN GLOW: San Francisco's still beautiful, but its restaurant operating environment isn't looking nearly so good lately.
Best place to be a restaurant employee? San Francisco, where the minimum wage just rose to $9.14 per hour, your restaurant's owner must now provide you with paid sick leave and, come July, must help provide you with health coverage if you're uninsured. Toughest place to be a restaurant owner? Same city, same reasons.
These costly mandates didn't kick in all at once, but they're causing operators and their accountants big headaches now that they are here. If you do business in a town where getting rid of trans fats is your biggest concern, consider yourself lucky.
The minimum wage increase came first. San Francisco voters pushed it from the then-federal rate of $5.15 per hour up to $8.50 per hour in 2004. The annual cost-of-living adjustment saw the rate rise to $8.82 per hour in 2006, and a 3.6 percent adjustment this past Jan. 1 moved it to $9.14 for 2007. Only Santa Fe, NM, has a higher minimum wage—$9.50 per hour.
Last November, San Francisco voters approved a measure that requires businesses to provide paid sick leave to full-time, part-time and temporary workers. Workers receive one hour of leave for each 30 hours they work.
In between those two elections, San Francisco's Board of Supervisors passed the Worker Healthcare Security Ordinance. Finalized last July, it requires employers who don't provide health insurance to workers to contribute to the city's Health Access Program. Companies with fewer than 20 employees are exempt, but those with between 20-99 employees must pay $1.06 per hour per employee beginning in 2008. Companies with 100 or more employees will have to contribute $1.60 per hour per employee, and must do so beginning this July. To be covered, employees must work at least 12 hours per week in 2007, 10 hours per week in 2008 and eight hours per week in 2009.
Costly as the minimum wage and sick leave mandates might be, they're small potatoes compared to the health care proposal. The San Francisco-based Golden Gate Restaurant Association (GGRA) has hired a legal firm to see if it can sue to stop it. The big issue: Where did the Board of Supervisors get the right to impose this costly requirement?
GGRA president Glenn Meyers says the group's position has been consistent: "Make healthcare more affordable for everyone. Unfortunately, the current ordinance is not affordable for the local restaurant community."
It all leaves San Francisco operators scrambling. "It will make the difference between profitability and lack of profitability," GGRA executive director Kevin Westlye told the San Francisco Chronicle. "You are not going to see those cool, little local restaurants," adds Eric Rubin, managing partner of Tres Agaves.