San Francisco’s progressive legislation leads the way for workers. A $15 minimum wage, mandatory parental leave, and fair pay protections are long overdue wins for low- and middle-income workers. However, these wins all come at some cost to your small business, so how can you plan ahead for your company’s future?
1. Minimum wage
This year San Francisco’s minimum wage creeps up to $13 per hour on its way to $15 per hour by 2018. The rest of California won’t pay $15 an hour until 2022.
Even if you offer high-end tech products or consulting services, you may have interns, receptionists, assistants, or kitchen staff who make minimum wage. In addition, some of your workers who currently make around $31,000 ($15/hour, 40 hours/week) may not consider themselves “minimum-wage workers” and demand a raise. In either case, the new legislation is likely to have some impact on your bottom line.
Don’t wait until next year to figure out how to afford the wage hike and do your research now. Can you pass along the higher costs to your customers? Could you absorb it or find savings elsewhere? Look at those options first. Take into consideration that other local businesses are increasing their workers’ wages, too. Will the increase in purchasing power boost your sales enough to make up for your increased labor costs?
If your profit margins are razor-thin, then you may have to consider cutting back on staff. Give them as much notice as possible so they can plan accordingly. Make sure to promise them excellent referrals.
2. Fair pay
San Francisco’s progressive legislation that takes effect this year protects against workplace discrimination, requiring employers to demonstrate that pay differences for similar jobs result from a factor other than gender. Don’t think of this one so much as a cost as an opportunity to reexamine your books and right any discrepancies.
3. Parental leave
In April, San Francisco passed one of the most generous family leave acts in the country. California requires that employees receive 55 percent of their wages for up to six weeks of paid family leave. The San Francisco ordinance requires businesses with more than 20 employees to fill in the remaining gap. The legislation applies to parents of either gender and to both full- and part-time employees within San Francisco.
Businesses with 35 employees or more must comply by July 1, 2017, while businesses with 20 or more employees have until January 2018. Your share of paid the San Francisco family leave will amount to an average of $3,344 per claim before California rates are adjusted, according to the San Francisco Chronicle citing an impact report issued by the San Francisco Controller’s Office.
Start calculating how many of your employees on average take parental leave, then plan for a small uptick. New dads are also included under the new law, so you may see more men taking advantage of the perk. Again, if you can easily absorb the cost, do so or incrementally pass along the costs to customers.
With any of these new policies, make sure to have an open door to your staffers for any questions and make them feel comfortable enough to engage in conversation.