Less than three months after Gov. Andrew M. Cuomo called on the state Department of Labor to investigate fast-food worker wages, a state wage board unanimously voted on Wednesday to increase the minimum wage for those workers to $15 per hour. The decision has riled business groups, some of which are considering legal action.
The board recommended gradually increasing the minimum wage for fast-food workers in New York over the next six years. The increases would be accelerated in New York City.
Starting Dec. 31, 2015, the New York state rate would increase to $9.75 per hour and incrementally grow annually until reaching $15 on July 1, 2021. In New York City, the minimum wage for fast-food workers would be $10.50 per hour on Dec. 31 and increase every year until reaching $15 on Dec. 31, 2018.
[table]
[tr][th]Date[/th] [th]NYC minimum fast-food wage per hour[/th] [th]State minimum fast-food wage per hour[/th][/tr]
[tr][td]Dec. 31, 2015[/td] [td]$10.50[/td] [td]$9.75[/td][/tr]
[tr][td]Dec. 31, 2016[/td] [td]$12[/td] [td]$10.75[/td][/tr]
[tr][td]Dec. 31, 2017[/td] [td]$13.50[/td] [td]$11.75[/td][/tr]
[tr][td]Dec. 31, 2018[/td] [td]$15[/td] [td]$12.75[/td][/tr]
[tr][td]Dec. 31, 2019[/td] [td]$15[/td] [td]$13.75[/td][/tr]
[tr][td]Dec. 31, 2020[/td] [td]$15[/td] [td]$14.50[/td][/tr]
[tr][td]July 1, 2021[/td] [td]$15[/td] [td]$15[/td][/tr]
[/table]
Crains New York reported this week that a coalition of unidentified businesses hired lawyer Randy Mastro, a partner at Gibson, Dunn & Crutcher LLP and former deputy mayor to Rudy Giuliani, to fight the wage recommendation.
Crains wrote that Mastro plans to challenge the governor”™s decision to use a wage board and bypass the state Legislature.
To no avail, efforts were made by Cuomo and the Democratic-led Assembly during the 2015 legislative session to increase the minimum wage.
Legislation was passed in 2013, during Cuomo”™s first year in office, to raise the overall minimum wage in New York; it is set to increase to $9 per hour by the end of the year.
On May 6, Cuomo penned an op-ed that appeared in The New York Times announcing his decision to call on the acting commissioner of the Labor Department, Mario J. Musolino, to appoint members for a wage board.
The board”™s three members ”“ who are meant to represent labor, business and government ”“ were directed to investigate wages in the fast-food industry and hold hearings for public input. The members are Buffalo Mayor Byron Brown; Mike Fishman, secretary-treasurer of the Service Employees International Union; and Kevin Ryan, chairman and founder of Gilt Groupe Inc. and vice chairman of the Partnership for New York City.
Another recommendation made by the board Wednesday was to define fast-food establishment as “part of chains that have 30 or more locations nationally,” according to the Labor Department.
In giving his instructions to the wage board in May, Musolino described fast-food chains as “limited-service restaurants where customers order at the counter and pay in advance, which are large chains with multiple locations nationally.”
Responses from the state business community began surfacing before the announcement was made Wednesday afternoon. The groups argued that fast-food franchises are being treated unfairly compared with competitors in the service industry.
Mike Durant, New York director of the National Federation of Independent Business, said in a statement that “small employers heavily rely on an entry level workforce and today”™s decision will ultimately stifle the hiring ability for small business outside the fast food industry.”
Durant and other critics of the wage hike have said fast-food restaurants should be considered small businesses in some circumstances because they are owned by franchisees, rather than the chains”™ CEOs.
“Today’s New York wage board decision to discriminate against the quick service food industry will cost jobs and potentially cause small businesses to close,” Steve Caldeira, president and CEO of the International Franchise Association, said in a statement.
The next step for the wage board is to submit a report to Musolino, which is expected to happen Monday. The public will have 15 days to comment on the document.
Musolino has 45 days from the filing of the report to accept, reject or modify the board”™s recommendations.
