Restaurateurs Call for Delay in California Wage Increase

California’s scheduled minimum-wage increase should be delayed to allow restaurants across the state to recover economically from the coronavirus crisis, the state restaurant association said March 27.

The California hourly minimum wage is scheduled to rise on Jan. 1, 2021, to $13 from $12 for employers with up to 25 employees and to $14 from $13 for employers with at least 26 employees, the Department of Industrial Relations said on its website.

The restaurant association, in a letter to Gov. Gavin Newsom (D) and state legislators, said: “When the Covid-19 crisis passes, there will be scorched earth on the restaurant and employment landscape, the letter said, noting that “placing the subsequent minimum wage increases on ‘pause’, as authorized by the minimum wage law will help mitigate the damage,”

The state’s annual minimum wage increases should be delayed when significant economic downturns exists, if certain economic or budget conditions are met, the association said.

Under state regulations, a scheduled increase may be delayed for one year if the seasonally adjusted statewide job growth for the previous three or six months is negative and retail sales receipts for the prior 12 months are negative, the department said on its website.

Alternatively, if a minimum-wage increase is projected to cause a deficit in the current budget or the budget forecast for either of the next two fiscal years, Newsom can pause the increase, but such a temporary stop may only be used twice, the department said.

The law requires the governor to make a preliminary determination whether conditions exist to delay the next year’s wage increases Aug. 1 and to make a final determination by Sept. 1.