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'Living Wage' Ramifications Clear to Some

Labor: As employers and lawyers ponder effects of Santa Monica ordinance, service employees just look forward to a raise.


While attorneys speculated on the constitutionality of Santa Monica's newly approved living wage law, hotel housekeeper Blanca Mendez was just hoping Thursday that she can benefit if a raise to $10.50 an hour goes into effect next summer at large downtown and beach-side businesses.

"It would be fantastic," said Mendez, who now earns $8.50 an hour after seven years at the Streamline Moderne-style Shangri-La Hotel near the ocean. "The economy is very difficult; everything is getting expensive, like gas, like energy."

But some lawyers predicted trouble ahead for the nation's first municipally mandated wage increase for private businesses that are not on city contracts or city land. They contend the law's targeting of certain areas and businesses and the exclusion of others is too arbitrary to survive an expected court challenge.

In the meantime, workers such as Mendez remained uncertain as to whether their workplaces will be included in the new law even if it does survive.

The uncertainty had parts of Santa Monica's beachfront work force buzzing Thursday.

Shangri-La manager Dino Nanni said he anticipates his 55-room hotel will be exempted from the law because its revenues fall below the $5-million-a-year threshold in the ordinance. But even so, he will feel its effects if his employees try to defect to better-paying jobs at larger hotels farther down Ocean Avenue.

Orlando Solis, who has worked as a maintenance worker at Shangri-La for a few months, said he would consider moving to another hotel that pays more.

"I can pay more bills," he said. "It would be more money in my pocket."

Mendez said she likes her job: "They are good to me here." But she wouldn't mind a pay raise, she acknowledged as she was cleaning a guest room, making the bed and putting in fresh towels.

Lawyers suggested Thursday the expected court challenge to the new law will be good to many of their number too.

Santa Monica lawyer Tom Larmore, who has worked with local business owners and merchants to oppose the ordinance, predicts the city will be exposed to significant financial liability as a result of an ordinance that affects some businesses in some parts of town and not other businesses elsewhere.

"If businesses suffer losses from the ordinance and the court decides what the city did was not constitutional, they would have grounds to go after the city for unconstitutionally impacting their business," he said.

But Joseph Lawrence, an assistant city attorney for Santa Monica, insisted Thursday that the city is within its rights and will fight back any claims that the wage ordinance unconstitutionally denies "equal protection."

"What it basically comes down to is economic law," Lawrence said. Officials "are given considerable leeway" on how they apply laws, he added. "If you had to treat the whole country the same you'd never get anything done."

Constitutional law expert Erwin Chemerinsky, a USC law professor, agreed.

"I don't see any constitutional problem with this," said Chemerinsky, who said he has reviewed the Santa Monica law at the request of the pro-ordinance California Living Wage Commission.

"The Supreme Court has said that the government can regulate business as long as the regulation is reasonable," he said.

Such laws are tougher to overturn because the burden of proof is higher than in discrimination cases involving race or free speech, Chemerinsky said.

Santa Monica's ordinance, preliminarily approved early Wednesday on a 5-1 vote, will raise minimum pay for workers at about 40 businesses that each gross more than $5 million in the coastal zone and downtown.

Employers also must pay health benefits of $1.75 per hour, then $2.50 hourly the next year, and there is a ban on retaliating against workers who report noncompliance to officials.

Business also can apply for exemption due to economic hardship or if they employ mainly minors or a seasonal worker force.

A required second reading of the ordinance is set for June 12. Although workers will not see the wage hike until July 2002, some aspects of the new law, such as protection from retaliation from employers, could go into effect this summer.

That means that employees and employers alike may soon be grappling with the law.

"I think there will be decisions made by businesses thinking about coming to Santa Monica who will say, 'I don't think we'll go there,' " predicted Dan Ehrler, executive vice president of the Santa Monica Chamber of Commerce.

"There will be some that are already here that will be thinking twice about remaining, both those in the area affected by the ordinance and those outside of it."

At the fashionable Rebecca's Restaurant on Broadway, manager Rene Galicia said his eatery will not leave town. But, since he expects it to be included in the higher-wage category, he said, "We'll be cutting hours and controlling labor. We are not going to [fire workers] because then we'll be tied up and service will be slower. We will try to control the labor and play with the schedules, that will be the only solution for us."

On the other side of the issue, Flor Rodriguez, a housekeeper at the Best Western Ocean View Hotel on Ocean Avenue, had a much more optimistic outlook.

"I'd go on vacation with my children. We all have necessities. I'd save for my daughter's college," said the $7.25-per-hour worker. "It would be great!"

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