Wage Increases?

The $15 minimum wage increase will impact foodservice operators in multiple ways.

Will your retail food establishment be required to pay the $15 minimum wage recommended by New York’s “fast-food wage board?”

Before you say no, take a look at the list of 137 restaurant company brands, including a number of bakeries, the board included in the final report to the state’s labor department.

While the three-member board says its list isn’t intended to be definitive, it shows that the board intended to cast a wide net with its loose definition of a “fast-food establishment.” 

Under the board’s recommendations, New York restaurants that are found to meet the board’s definition of “fast food” will have to pay a minimum wage of $15 by 2021, while those in New York City will be required to pay $15 by 2018.

The report won’t be final until it’s signed by Mario Musolino, New York’s acting labor commissioner.

The Coalition to Save New York Restaurants, which includes the National Restaurant Association and New York State Restaurant Association, urges restaurant operators to tell the wage board about the pressure a $15 minimum wage will put on their businesses.

New York Governor Andrew Cuomo in May ordered Musolino to form the wage board to recommend a new minimum wage for the state’s “fast food” establishments. No restaurant operators were chosen to serve on the board, which has largely dismissed concerns about job losses, price increases and closures raised by restaurant operators, the NYSRA, and the NRA. Both associations joined other business groups in the Save New York Restaurants coalition to oppose the increase.

Tens of thousands of restaurateurs face increased labor costs resulting from the New York State Wage Board’s decision to raise the minimum cash wage for tipped employees by 50 percent, from $5 to $7.25, in 2016. On July 22, the three-member board also recommended an increase in the hourly wage for fast-food workers to $15 an hour.

Add on expenses tied to the Affordable Care Act, a hike in state unemployment taxes, a possible statewide minimum-wage increase for all employers to $10.50 an hour and Nielsen estimates the new government mandates will take up to $400,000 out of his bottom line.

From New York to Los Angeles, Chicago to Washington D.C., restaurant owners are grappling with how to manage new minimum-wage increases that greatly exceed the federal level of $7.25 an hour. Already operating on slim margins, operators are raising prices, considering layoffs or limiting employee hours and using technology to lower labor costs to keep their businesses going.