San Diego has fined businesses $60,000 over minimum wage violations

Investigators enforcing San Diego’s minimum wage law have handled more than 500 complaints against 70 businesses and levied nearly $60,000 in fines since the law took effect last year.

City officials say those numbers will increase as outreach efforts make more people aware that San Diego’s hourly minimum wage of $11.50 is higher than the state minimum of $10 for small businesses and $10.50 for large ones.

Many employers have blamed ignorance of the law for their failure to comply, including some in La Jolla and San Ysidro who said they didn’t know those two communities are within the city of San Diego’s borders, city officials said.

Others have claimed ignorance of the law’s sick leave component, which requires businesses to grant employees five sick days per year – two more days than the state.

So the City Treasurer’s Office, which is overseeing the wage law, has ramped up outreach and education efforts, including meeting with merchant groups and putting fliers in city business license applications mailed to 110,000 employers.

The city has also placed ads on trolleys and buses to reach workers and is running public service announcements on CityTV, San Diego’s public access channel.

Upcoming efforts include an interactive complaint submittal form and a booth at monthly naturalization ceremonies for immigrants outside downtown’s Golden Hall.

The treasurer has also established a six-step process for investigating complaints against businesses that includes a settlement conference and the opportunity for businesses to appeal fines to a hearing officer.

Councilwoman Lorie Zapf, who opposed San Diego’s minimum wage law, said it’s unfortunate the city has had to go to such lengths, given that local minimum wage enforcement is expected to cease for many businesses in January 2019 and for all businesses by January 2020.

That’s because upcoming increases in the state minimum wage will push that pay rate higher than the city’s minimum wage, which will rise more slowly because it’s pegged to the consumer price index.

For businesses with 26 employees or more, the state’s hourly minimum wage will increase from $10.50 to $11 on Jan. 1, then to $12 on Jan. 1, 2019. Meanwhile, San Diego’s city minimum wage is expected to remain below $12 when its first increase pegged to inflation kicks in on Jan. 1, 2019.

For business with 25 employees or less, the state’s hourly minimum wage will increase from $10 to $10.50 on Jan. 1, then to $11 on Jan. 1, 2019 and then to $12 on Jan. 1, 2020. City officials said they expect San Diego’s city minimum wage to remain below $12 then.

“I think we just got ourselves into a lot of regulatory morass here,” said Zapf, referring to San Diego having to enforce its own hike, which voters approved in June 2016.

Zapf’s council colleagues, however, said enforcement should be a priority until the city’s minimum wage is surpassed by the state. And even then, they noted that the city’s higher amount of required sick leave will need to be enforced.

“These folks don’t feel protected and we need to do everything in our power to make sure that they do,” Councilwoman Georgette Gomez said.

She noted that a San Diego State University study last year found many employees don’t report being cheated out of wages because they don’t speak English well, they don’t understand the law, they fear retaliation or they don’t trust government.

Councilwoman Barbara Bry said San Diego setting its own minimum wage, which happened before state officials approved a series of increases, was a key move.

“I think it’s one of the most important things this city has done to impact tens of thousands of working families, and we really have to get the enforcement right,” Bry said.

Councilman Chris Ward suggested random audits of businesses could help, but city officials said they are focusing more on outreach so employees understand their rights and how to complain when they are violated.

“To just go out there and start knocking on doors – it would take us decades,” said Ricardo Ramos, business operations manager for the treasurer’s office, noting San Diego has more than 60,000 businesses subject to the new law.

Through Sept. 30, the city had received 507 complaints against 70 employers. Many of the complaints were for multiple violations of the law, which include retaliation and failure to post the new requirements in the workplace.

City officials have closed 406 of the complaints against 15 employers, which have resulted in 94 workers getting a total of $29,458 in compensation. In addition, employers found at fault have had $28,000 in fines levied against them.

The city has declined to reveal the names of businesses found at fault under the new law, which took effect in September 2016. Officials say confidentiality will create a better environment for people to come forward with complaints.

david.garrick@sduniontribune.com (619) 269-8906 Twitter:@UTDavidGarrick

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