City Hall Tells How It Proposes to Enforce Pasadena’s New Minimum Wage

Following Pasadena’s passage in March of a new ordinance which will raise the minimum wage in the city to $15 an hour by 2020, both business owners and people who work in Pasadena were left with two major questions — how will this raise actually be implemented and monitored, and how will the new law be enforced?

City Hall’s Minimum Wage Internal Working Group has a plan. The detailed proposal was made public last Thursday in an informational report.

The Group is recommending that the overall program be administered by a code compliance manager working within the department of Planning and Community Development. The initial outreach of the ordinance to media, residents and businesses, will be managed by the Council’s Economic Development Committee, and the City’s public information officer. Staff training in the legal requirements of the ordinance will be handled by the City Attorney’s office.

Consumer outreach and education will be managed by the consumer action teams of the Recreation and Human Services Department, who will also manage intake and complaints regarding wage enforcement and refer them to the Code Compliance manager. Egregious cases may also be referred to the Prosecutor’s Office, working with the Police Department.

The initial cost of the action is estimated to be $204,000, divided among the Planning and Community Development Department, the Recreation and Community Services department, and the City Attorney’s office. An additional $175,000 will be allocated in future budgets for a Compliance Manger and ongoing outreach.

The City Council’s finance committee will meet on May 9 to budget for the new costs, including the code compliance officer.

Much of the future discussion of the wage ordinance is expected to be centered around its impact on the City’s business community, as well as the City ability to manage any related issues that may arise in its implementation.

“It is difficult to predict the level of questions, compliance issues and complaints that will be generated by the minimum wage ordinance,” the report said. “Likewise, it is difficult to predict the level of ancillary matters that will be brought to light as a result of the enforcement program; for example, wage theft other than minimum wage violations.”

And at least one business leader is predicting calamitous results in the city due to the new ordinance.

“The reality is only a certain amount of price increase that customers will swallow and that’s not enough to cover increased employee cost because it’s not just the minimum wage but it’s the payroll packs and it’s the worker’s compensation,” said Pasadena Chamber of Commerce President Paul Little. “And it’s the compression with everybody at the food chain. Somebody gets a raise, everybody wants a raise. So there’s significant cost, so they’re looking at ‘how do I cut costs so I can remain profitable?’ And that includes looking at automation, looking at reducing hours, and reducing number of employees.”

But Dan Flaming of the Los Angeles Economic Roundtable, begs to differ, saying, “How risky is this, really? It’s less risky in Pasadena, which has more lifting power than other cities, to support this.”

Occidental College economist and Pasadena resident Peter Drier added that, in Seattle, where they raised the minimum wage two years ago, “there has been no evidence of any restaurants failing.”

Rachel Torres of The Hotel Workers Union Local 11, has also said that the same argument against minimum wage had been made in Los Angeles in 2014, by major hotels, and “most of those major hotels are now adding rooms.”

The report concluded that “Should the demand for information or service overwhelm assigned personnel, it will be essentially to bring this to the attention of City administration and ultimately, the City Council. Any need to direct significant resources, into other areas, for example, to address the broader problem of wage theft beyond minimum wage violations, can be quantified and presented to the decision-makers and to the community as a whole.”

Pasadena is among 18 cities in California which have raised minimum wages, ahead of Governor Brown’s passage of a state-wide minimum wage raise. The state ordinance raises wages to $15 an hour by 2022. The City and County of Los Angeles have also announced new minimum wage ordinances to go into effect this year.