The pressure is on a Berkeley waterfront restaurant, Skates by the Bay, to pay its employees more money.
City Council for the first time has decided to enforce a city ordinance that requires private employers on city property to pay their hourly workers a “living wage” of up to $11.37. The state’s minimum wage is $6.75. The city’s higher wage minimum is an attempt to make the area’s high cost of living more bearable.
Skates is not complying with the living wage laws, according to city council members. On Tuesday City Council requested that the city manager’s office tell Skates, which sits on city-owned property at the Berkeley Marina, that it has breached its lease, and if it does not adhere to city regulations it could be forced to close.
The decision came as Skates is appealing its failed attempt to oust the city’s living wage ordinance in court.
Skate’s managers could not be reached for comment.
Berkeley's Living Wage Ordinance, passed in June 2000, requires any employers who hold leases or contracts with the city to pay their workers $9.75 plus $1.62 in benefits, or $11.37 per hour with no benefits.
The ordinance was amended in September of 2000 to include only businesses at the marina that employ more than six people and generate more than $350,000 annually.
Councilmember Chris Worthington, who authored the 2000 ordinance and sponsored Tuesday’s decision to enforce it, said that the council intends to stand by its ordinance.
“We want to be reasonable and give Skates appropriate legal notice and sufficient time,” he said. “But it has taken many months for the city to up the pressure on them and start to say, ‘Hey, this law has been on the books for more than year. It is about time you start paying living wage.’ ”
In March a district court dismissed Skates’ 2001 lawsuit filed against the city in opposition to the living wage ordinance. The court claimed the restaurant had no legal basis to defy the city’s ordinance and should be required to pay the higher wages.
The lawsuit, though, suggested that higher wages were unfair.
Wages could cause “increased prices, consolidation of jobs, elimination of reduction of part-time employment, elimination of non-mandated benefits, reduced hours of operation or potentially closing of the restaurant depending on the total impact,” the suit stated.
Skates, which is owned by multimillion dollar Restaurants Unlimited Corp. based in Seattle, also said the ordinance illegally changed the terms of its lease with the city. The wages could hurt their business, the restaurant owners added.
Employees of Skates and an intervening union say that council's recent decision will be powerful.
“Skates has done everything to avoid paying as long as they can, and now the City Council has taken this very strong move to finally get them to do it," said Martha Benitez of the East Bay Alliance for a Sustainable Economy (EBASE).
With council’s action Tuesday, the city has legal authority to file a lawsuit against the restaurant or send a formal notice to terminate its lease.
EBASE has already filed a suit against Skates, although the organization says that city intervention will have a greater impact on restaurant managers.
In addition to raising wages, both the city and EBASE expect Skates to pay past wage differences owed to current and former employees. Skates' managers are holding the past wage difference in a separate bank account and are prepared to pay if they have to, according to Benitez.
Skates’ employees were blocked from suing the restaurant over the ordinance because of the restaurant’s ongoing legal battle with city.
“Skates took advantage of the fact that they have money and are not paying their employees during the lawsuit,” said City Attorney Manuela Albuquerque. “They sued as a practical matter because they knew while the constitutionality [of the ordinance] was being litigated, employees couldn't sue.”
While a lawsuit would allow Skates to continue delaying payments to employees, city intervention will force the restaurant to address the issue, Albuquerque said.