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Minimum wage goes up – Are businesses ready?

When Production Staffing Manager Carmen Pascual informed her workers that the minimum wage would be going up, she got a mixed response. Her Inwood employment agency, which farms out low-wage workers to factories in New Jersey, is now required to pay $7.25 an hour rather than $7.15. Some workers were excited, Pascual said. Others were less than impressed, sarcastically exclaiming, "Oh wow, 10 cents!"

The new minimum wage increase of a dime, effective July 24, is based on federal minimum wage provisions in the Fair Labor Standards Act. It is likely to affect a small portion of businesses in Northern Manhattan in minuscule ways. The real impact, if any, is in the scramble to get the word out.

"This is basically about getting businesses to obey the law," said Peter Walsh, president of the Washington Heights Inwood Chamber of Commerce and owner of Coogan's Restaurant. Walsh doesn't see the increase, the last of several incremental raises from a federal bill first passed in 1938, as dramatically impacting Northern Manhattan.

Many of the area's major employers, such as the nonprofit sector and NewYork-Presbyterian Hospital, as well as Coogan's, all already pay wages higher than the new minimum wage, according to Walsh.

Washington Heights Bravo supermarket franchise owner Humberto Deleon said he had 15 employees earning the minimum wage between his two stores. But the change meant nothing more than a few painless keystrokes on the computer: it won't affect prices or his bottom line, he said.

Deleon learned of the increase from his accountant and a memo from his parent company.

The worry is that some small businesses, which don't have accountants or memos from the top, will quietly fall out of compliance with the law.

"No one is going to say 'Gee I'm gonna cheat these guys out of 10 cents,'" Walsh said.

But Dennis Reader of the Washington Heights and Inwood Development Corporation, a nonprofit that works with small businesses, is confident that word of mouth and the media will keep most owners in the loop.

"If an employer doesn't know it, then the employee would tell them," Reader said.

Technically, businesses are required by law to hang up a poster announcing the new minimum wage and rights of employees for the benefit of the staff in the workplace.

According to New York State Labor Department spokesperson Jean Genovese, the state has mailed out post cards to every registered business in its system, posted a banner on its Web site's homepage and reached out to labor unions and local officials. They've even put bumper decals on the department's cars, she said. But those steps may not be seen on the streets of Northern Manhattan, which in some ways is an island of its own.

When asked about how the rate increase would affect his business, Sultan Lakhani, franchise owner of two Papa Johns Pizza locations in Northern Manhattan, said he was still fuzzy on the particulars. Did the federal increase apply to him when the state minimum wage was different? And how does this change the wage of his delivery drivers – who are legally allowed to earn less than the minimum because they make up for it in tips?

Genovese said all that information, and more, is available by telephone or by visiting the NYSDL website at www.labor.state.ny.us.

As for Pascual and her less than enthused workers, she wishes the increase were higher. But because she passes the cost to her factory clients, the minimum is all they'll pay.

"I wish I could pay them $8 an hour, but I can't," she said.

 

In briefs section of Edition 385 13 August 2009

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