Restaurant flouts Albuquerque’s minimum wage

Restaurant owner Eric Szeman says he warned his employees that Albuquerque’s new minimum-wage law would result in layoffs, schedule cuts and, in the end, “we’d have to close our doors.”

But he says he found a way to avoid that. Szeman’s employees signed paperwork agreeing to continue working at the old minimum, he said.

“I researched the law and found out there’s no enforcement for noncompliance,” said Szeman, who owns the Route 66 Malt Shop. “So we’re not complying, and our staff is perfectly happy to work at the old minimum wage.”

The ordinance, in fact, does include language saying an employee can file civil litigation seeking back pay and other relief, or the city attorney can enforce it.

City Attorney David Tourek said the agreement mentioned by Szeman, even if employees sign it, is “an illegal contract” and that businesses can’t opt out of the ordinance.

But the city won’t step in at this point.

“Without the necessary authorization and necessary resources being provided by (the City) Council, the City Attorney’s Office will not be initiating civil lawsuits in court against private businesses on the behalf of private individuals,” he said in a written statement.

Matthew Henderson of Olé New Mexico, an advocacy group that pushed for the wage increase, said it’s “scandalous” that the city administration isn’t taking steps to carry out the law.

“The mayor’s really dropping the ball,” Henderson said.

ProgressNow New Mexico, a Democratic-leaning group, plans to hold a protest and announce a boycott today at the Route 66 Malt Shop. Szeman said he’s not backing down.

The ordinance, approved overwhelmingly by voters last fall, provides for civil enforcement of the minimum wage in court, through litigation brought by the employee. A company is subject to paying triple the back wages, plus the plaintiff’s legal fees.

But the ordinance also says the city has authority to “coordinate implementation and enforcement” and may issue rules or guidelines to businesses.

In addition to an employee-brought lawsuit, the ordinance says “the requirements of this ordinance may also be enforced by the City Attorney.”

The wage law won approval from about 66 percent of Albuquerque voters in November.

The proposal made it onto the ballot under City Charter provisions for voter-driven initiatives. Supporters circulated petitions to gather the thousands of signatures needed to put the proposal to voters.

The New Mexico Restaurant Association and other business groups vigorously fought the proposal. They said it would result in higher prices and job losses because companies couldn’t afford as many workers, among other objections.

Szeman said his payroll averages about $3,600 every two weeks and would shoot up sharply under the new law. Employees agreed to sign papers saying they’d accept the old wage.

“We’d have to close our doors” otherwise, he said.

The new wage law boosts the minimum for most employees from $7.50 an hour to $8.50 an hour, a 13 percent increase. Tipped employees go from $2.13 an hour to $3.83 an hour, an 80 percent increase.

The enforcement provisions of the ordinance weren’t changed in the petition drive.

Szeman said he has about a dozen employees. Some already make the new minimum or close to it, he said.

The wait staff, however, has remained at the $2.13 an hour rate, he said. Busers, who also receive tips, get more than $5 an hour.

Henderson said Szeman is overstating the financial challenge. A tipped employee who makes $21 every 10 hours would cost $17 more under the increase, he said.

“You’ve just got to believe a restaurant in Nob Hill could afford to pay $17 more per week for a server or figure out a way to do so,” he said.

A server working 40 hours a week would see an increase of about $68.

The wage law took effect Jan. 1. It calls for increases in future years based on changes in the Consumer Price Index.
— This article appeared on page A1 of the Albuquerque Journal