PCOC - Summer 2016 - 15


practice. "SB 3's indexing provision allows
only increases to the minimum wage - no
decreases," the firm's online newsletter
"Insight" noted.
The increases are automatic, starting
in 2023 for employers with 26 or more
employees, and starting in 2024 for employers with 25 or fewer employees, unless a
future legislature passes, and the governor
signs, a bill providing otherwise, Cobey
and Chilco wrote.
These increases may be delayed for economic reasons, but only the governor can
trigger the delays, and only from 2017 to
2023. In addition, the governor can only
do so twice, based on specified economic
factors and certifications by the California
Director of Finance, according to Cobey
and Chilco. If a minimum wage increase is
suspended, subsequent increase dates are
postponed for an additional year.
Gov. Brown stated that the plan "raises the
minimum wage in a careful and responsible
way and provides some flexibility if economic and budgetary conditions change."
But Shawn Lewis, California state
communications director for the National
Federation of Independent Business, said
the federation is deeply concerned about the
impact the law will have on small businesses.
"The vast majority of our members have
10 to 20 employers and over 95 percent of
them have said that any increase would have
a detrimental effect," according to Lewis.
Different industries will try to cope with
the increase in different ways, he said. "The
harsh reality is there will be lay offs and cut
backs in hours or services. The most common result will be that businesses will have
to pass a lot of the cost on. We'll see higher
wages offset by a higher costs of goods and
services. The policy is not going to have the
positive outcomes advocates wanted."
"The NFIB has been very opposed to this
from the beginning. Many of our members
are operating on very tight margins and this
may put them out of business," Lewis said.
Debra	Rosen,	president	and	CEO	of	the	
North San Diego Business Chamber, warned
that small-business owners "are already
challenged with so much legislation that
makes it tough for them to do business in
California. Enacting this minimum wage
increase is one more challenge."
It's not just the direct increase in the minimum wage, she said. "It means paying more
workers' compensation, increasing wages

for those who are already at minimum wage
and it all drives the price of doing business
up. Who will pay the higher prices? The
consumer. The unintended consequences
mean higher prices for goods and services
and possibly many businesses closing."
One Size Doesn't Fit All
Perhaps the biggest problem pest control
operators have with the law, said Jim Steed,
president of Neighborly Pest Management,
is that it presumes that "one-wage-fits
all-sizes."
The law certainly doesn't fit all sizes,
and the worst fit is for the small companies
that make up more than 50 percent of the
pest	control	industry,	said	Steed.	He	is	third	
vice president of Pest Control Operators of
California	(PCOC).	"At	larger	companies	in	
our industry, employees are already making this wage. This stifles growth not at the
largest level, but at the smallest level. That's
where it hurts the worst."
"When you've got a one, two, three person operation - good luck. These are people
doing business out of their home or small
office. It's a terrible burden on small businesses that are looking to grow," Steed said.
"In order for you to create another job,
you're going to have to cut your own wage,"
he continued. These very small businesses
"literally can't afford wages at that level for
a trainee. A trainee has to work supervised
for at least 30 days. After that the trainee
can't work unsupervised until the person
is licensed. People often take the test two
or three times before they pass. So, for as
long as 90 days, a person may not be producing revenue."
"I know personally of companies in
Sacramento area - I don't know how they're
going to do it. They're going to have to get
line of credit and what if their expansion
doesn't succeed?"
In addition, he said, the more of their revenue that small-business owners have to put
into wages, the fewer benefits they can offer.
"It's just not going to be there. There will be
less jobs and less benefits."
Steed said that PCOC had hoped the legislature would consider options such as a
tax credit for new employees or a trainee
wage. But, "instead of California sharing
the burden, it's companies that are sharing
the burden."
During discussion of a trainee wage, Steed
said some legislators expressed concern that
www.pcoc.org / Summer 2016

15

companies might "abuse" such a wage, by
hiring an individual at a training wage, then
firing the person when that lower wage
expired.
Dominic DiMare, a partner in DiMare,
Brown	Hicks	&	Kessler	LLC,	noted	that	
the new higher minimum wage only adds
to the overall high cost of doing business
in California, making the state even less
attractive to companies.
"There are higher fuel costs for air quality. The real estate costs are probably above
market. These additional costs are things that
make it more expensive to do business in
California and raising minimum wage is not
alleviating those costs at all. It drives businesses in California to not hire new employees or to laying them off to control costs."
DeMare, who is PCOC's legislative advocate, noted that there had been discussion
in the legislature about taking a regional
approach to raising the minimum wage,
allowing for differences in high-cost and
low-cost areas. "The business community
was prepared to have this conversation but
they weren't given a chance. Gov. Brown
and the supporters didn't give it a chance."
Is there any chance the new minimum
wage law might be changed?
"It's kind of a done deal," DiMare said,
but added that there has been discussion of
soliciting signatures to get a referendum on
the November ballot to put the higher wage
issue to the electorate for a direct vote.
Steed doesn't see much hope of substantial
change down the road. "I spoke to assembly members as recently as last month,"
he said in May. This bell has been rung in
California. The arguments have been made.
We lost."
"The closest thing that might have any
hope is some type of tax credit or adjustment
for small businesses of 20 employees and
under, or 10 employees and under."
"You might see something like that work
its way through" the legislature eventually,
he said, "but I don't think we'll see that until
we see the bleeding" caused by the increase
minimum wage.
Stephenie Overman specializes in workplace and
health issues and is author
of Next-Generation Wellness at Work (Praeger Publishing). She is former senior writer for HR Magazine.


http://www.pcoc.org

Table of Contents for the Digital Edition of PCOC - Summer 2016

President’s Message PCOC: Building Opportunities, Adding Value
Measurements That Matter and Why
Presidential Profile
Business Leaders Warn of Dangers of New Wage Law
Federal Update
Insurance Sprains, Strains and Auto-Hose Reels
State Capitol Report Views from Sacramento
Membership Pays! Clark Pest Control Highlights its PCOC Benefits and Value
Firm Profile Cliff’s Pest Control
Index to Advertisers
Advertiser.com
PCOC - Summer 2016 - cover1
PCOC - Summer 2016 - cover2
PCOC - Summer 2016 - 3
PCOC - Summer 2016 - 4
PCOC - Summer 2016 - 5
PCOC - Summer 2016 - 6
PCOC - Summer 2016 - President’s Message PCOC: Building Opportunities, Adding Value
PCOC - Summer 2016 - Measurements That Matter and Why
PCOC - Summer 2016 - 9
PCOC - Summer 2016 - 10
PCOC - Summer 2016 - Presidential Profile
PCOC - Summer 2016 - 12
PCOC - Summer 2016 - 13
PCOC - Summer 2016 - Business Leaders Warn of Dangers of New Wage Law
PCOC - Summer 2016 - 15
PCOC - Summer 2016 - Federal Update
PCOC - Summer 2016 - 17
PCOC - Summer 2016 - Insurance Sprains, Strains and Auto-Hose Reels
PCOC - Summer 2016 - 19
PCOC - Summer 2016 - 20
PCOC - Summer 2016 - State Capitol Report Views from Sacramento
PCOC - Summer 2016 - 22
PCOC - Summer 2016 - 23
PCOC - Summer 2016 - 24
PCOC - Summer 2016 - Membership Pays! Clark Pest Control Highlights its PCOC Benefits and Value
PCOC - Summer 2016 - 26
PCOC - Summer 2016 - 27
PCOC - Summer 2016 - 28
PCOC - Summer 2016 - Firm Profile Cliff’s Pest Control
PCOC - Summer 2016 - Advertiser.com
PCOC - Summer 2016 - cover3
PCOC - Summer 2016 - cover4
PCOC - Summer 2016 - outsert1
PCOC - Summer 2016 - outsert2
PCOC - Summer 2016 - outsert3
PCOC - Summer 2016 - outsert4
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