The recent passage of a federal minimum wage act is expected to have little, if any, impact on San Diego employers. But rumored amendments in the Senate may prove otherwise.
The House of Representatives passed HR 2, also known as the Fair Minimum Wage Act of 2007, on Jan. 10. The act raises the minimum dollar amount an employee anywhere in the country may receive from $5.15 an hour to $7.25 an hour within two years.
Tina Fryar, an employment law attorney at the San Diego office of Littler Mendelson, said there’s no cause for any immediate concern locally because California’s minimum wage already far exceeds the national rate.
“Local business has already absorbed (increases like these),” Fryar said.
Fryar, whose law firm is based in San Francisco but has 40 or so offices nationwide, said locals will want to pay attention to whether rumored small-business tax breaks get written into the Senate’s version of the act.
The types of breaks the Senate might consider are rumored to include modifications to expensing levels, depreciation rules, tax credits and possibly implementation of other types of tax incentives favorable to businesses, Fryar said.
“All of these things are so up in the air right now,” Fryar said. “We’ll just have to wait and see (what the Senate does).”
While the act, which was co-sponsored by Rep. Susan Davis, D-San Diego, passed the House 315-116, it still awaits approval by the Senate.
In a prepared statement, Davis said: “The real value of minimum wage has plummeted to its lowest level in 51 years. An increase will not only be good for minimum wage earners, but it will be a good step to a stronger economy.”
Rep. Duncan Hunter, R-Alpine, voted no on the act, as did 115 of his Republican peers, including Rep. Darrell Issa, R-Vista, and Rep. Brian Bilbray, R-Escondido. Meanwhile, Rep. Bob Filner, D-San Diego, was among the predominantly Democrat crowd who voted yes.
Although there are more Democrats than Republicans in the Senate, passage of HR 2 in the Senate would require some Republicans to cross party lines. There are 51 Democrats compared with 49 Republicans and at least 60 votes in favor of HR 2 are needed to ensure the act arrives on President Bush’s desk. Bush has reportedly said he would favor the wage hike if it came with tax cuts.
Although some Democrats have publicly stated that they would accept a compromise that would raise the minimum wage and feature tax breaks for small-business owners, others have not.
In a Washington Post article, San Francisco Bay Area Rep. George Miller, D-Martinez, was quoted as saying: “Let’s be clear, given that nearly a decade has passed since the last minimum wage increase, no one can seriously believe that the proposed increase will harm the small-business sector. A minimum wage increase should not and need not be conditional on other legislation or policy changes.”