From your small-business-advocacy team in Sacramento
Welcome to the April 1-5 edition of the NFIB California Main Street Minute from your small-business-advocacy team in Sacramento.
New Minimum-Wage Rate in Effect Today
- The state’s new minimum-wage rate of $20 an hour for employees of fast-food franchises goes into effect today (April 1).
- In opposing the law that raised the rate and established a Fast Food Council to set future increases, NFIB warned of the consequences that would occur, none of which appear to be pro-worker.
- “Chipotle, McDonald’s, Starbucks, Jack in the Box and Shake Shack are planning to raise menu prices. Fast-food franchisees are laying off employees or cutting their hours,” reports the Los Angeles Times. ‘Where they can automate, they will automate more,’ [Georgetown University professor Harry] Holzer said. ‘Maybe some franchises will move out of state.’”
- It’s also not quite clear which franchisees must comply.
— “Which restaurants have to follow the law is still a moving target,” reports CalMatters. “Just this week, Gov. Gavin Newsom signed into law a carve-out for fast food places at airports, convention centers and hotels.
— “According to emails obtained by CalMatters … a range of employers have been trying to figure out if they must pay $20 ever since the law was signed late last September.
— “… in October, the Department of Industrial Relations received two inquiries from franchise owners asking whether they must comply with the law. One employer owned Auntie Anne’s and Cinnabon pretzel stores and believed they counted under a controversial bakery exemption; the other owned an ice cream parlor.”
- To be factual, the new law, Assembly Bill 1228, applies only to “limited-service restaurants consisting of more than 60 establishments nationally that share a common brand,” which doesn’t describe the average NFIB-member business. But the minimum wage never stays put and keeps expanding until every enterprise is ensnared.
- Furthermore, federal law allows states to set their own minimum-wage rates and California goes a step further by allowing local government to set their own rates with equally disastrous results, as this example from the same Times story points out.
— “West Hollywood raised its minimum wage to $19.08 an hour in July after vehement opposition from business owners, and just days before chef Josiah Citrin opened his steakhouse and seafood restaurant Charcoal Sunset.
— “Over the next several months, Citrin said, he did everything he could to make it work, including cutting his staff from 50 employees to 30 and rolling out a more limited menu.
— “But the high wages and a severe pullback in customer spending due to the Hollywood strikes were too much for the restaurant to overcome. Citrin closed Charcoal Sunset in February.”
The Legislature
- After taking last week off for Spring Recess, the Legislature starts back to work today, April 1. Click here for the latest bill list on measures NFIB is fighting for or against.
NFIB Announces Backing of Ballot Initiative
- Last Thursday (March 28), NFIB sent out a news release announcing the reason we are backing the November ballot initiative, the Taxpayer Protection and Government Accountability Act.
Calendar
- May revise of the governor’s 2024-2025 proposed state budget. Date TBD
- May 24 deadline for bills to pass their house of origin (Assembly, Senate)
- June 15, midnight, constitutional deadline to pass 2024-2025 state budget
- June 27 deadline for ballot measure to qualify for November
- August 31 deadline for bills to have passed Legislature and sent to governor
- September 30 deadline for governor to sign bills into law
- November 5, General Election Day
National
Highlights from NFIB Legislative Program Manager Caitlin Lanzara’s weekly report
- On March 26, NFIB sent a statement following the anti-trust settlement reached by Visa and Mastercard. Vice President of Federal Government Relations Jeff Brabant said, “As long as the credit card networks, Visa and Mastercard, get to set the interchange rates for every bank that issues a credit card, anti-competitive pricing will remain, and small businesses will continue to pay artificially high rates. Competition must be injected into the credit card marketplace to allow rates to be set by market forces, and that will only happen with the passage of the Credit Card Competition Act.”
— AP News reported on the settlement, quoting Brabant: “We are pleased that Visa has finally recognized that their anti-competitive practices have caused ‘true pain points small businesses have identified.’”
- On March 22, an op-ed in The Hill cited NFIB research and opposition to the Department of Labor’s (DOL) final independent contractor rule, comparing the rule to California’s A.B. 5:
— “According to a survey by the National Federation of Independent Business, nearly 30% of small businesses anticipated a negative impact on their operations due to A.B. 5, underscoring the widespread apprehension surrounding this legislative shift.”
- On March 21, NFIB member small business owner Bruce Lackey of Ohio spoke with The Wall Street Journal to discuss how the Securities and Exchange Commission’s (SEC) Scope 3 requirements would have impacted his small business, he stated:
— “If they come to us and say we need to know what are your emissions of diesel engines or our ammonia refrigeration systems, that’s like ‘Holy cow, where do I start?’ Well, I’d hire a very high-price consultant … Hey, I’m all for clean air and water. But something like this, it’s almost a shotgun approach to something that is very difficult for even small businesses to understand. This one was beyond unwelcome. It was truly unreasonable.”
— Scope 3 climate disclosures for small businesses were removed from the SEC’s final rule, a significant victory for small businesses. Read NFIB’s press release here.
- Next week on April 3, NFIB will host a webinar titled, “Tax-Savings Strategies for 2024: Choosing the Right Entity and Hiring Your Kids.” Register here.
This Main Street Minute can also be read on the NFIB California webpage here. Next Main Street Minute April 8.
