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Marriott Hotel Gift Shop Owner Becomes First Convicted of Violating Santa Monica Higher Minimum Wage Law
By Niki Cervantes
November 28, 2017 -- The owner of a gift shop in the Marriott Hotel on Ocean Avenue has become the first employer convicted of violating Santa Monica’s “$15-by-2020” minimum wage law, the City Attorney’s Office announced Monday.
City prosecutors said LA Boutique Gift Shop, in the JW Marriott Hotel, engaged in “egregious” violations of the City’s higher minimum wage, which went into effect almost a year and a half ago.
No employee of the gift shop was paid the minimum wage, and one worker who demanded the correct pay was fired in retaliation, said Chief Deputy City Attorney Yibin Shen.
Those still on the payroll were underpaid by “many dollars” per hour, he said. “It wasn’t just a few pennies,” he said.
Shen said the message from the conviction to employers throughout Santa Monica is two-fold: Employers must learn the law, which has been the subject of much outreach by the City, and “if an employer chooses not to do so, they’ll see this (conviction) and understand,” Shen said.
In all, he said, the case ended with “a positive and fair result.”
Prosecutors wanted to pursue getting the terminated employee re-hired, but he chose not to go forward, Shen added. “We understand,” he said.
The owner’s name wasn’t released by the City. Prosecutors said the business had prompted numerous official complaints about the too-low pay, triggering a months-long investigation.
City Prosecutor Melanie Skehar took a “no contest” plea by the owner of LA Boutique on November 21 to three misdemeanor counts of failing to pay employees City’s minimum wage and one misdemeanor count of unlawful retaliation against an employee “for exercising rights protected by the City’s minimum wage laws,” the City said.
Under a plea agreement, the owner was placed on 36 months of probation and ordered to pay approximately $11,000 in back wages to all affected employees, and about $3,000 to the City for its investigative costs.
In addition, the owner agreed to perform 150 hours of community services and comply with the minimum wage law.
Under the City’s law, employees in business with 26 or more workers were to pay $10.50 an hour in 2016 (compared to the state minimum wage of $10 hourly at that time) and then $12 an hour as of July this year, versus the state’s $10.50.
By next July, the wage increases to $13.25 an hour. The 2018 state rate is $12 ("Santa Monica City Council Votes to Hike Hourly Minimum Wage to $15 an Hour by 2020," January 14, 2016).
Businesses with 25 or fewer employees were to pay $10 an hour in 2016, then $10.50 hourly this July and $12 an hour next July.
Santa Monica’s law, which purposely mirrors its counterpart for the City of Los Angeles, reaches $15 an hour by 2020 for the larger business. Smaller businesses hit $14.25 that year, and then reach $15 the following year.
Hotel workers are in separate pay category. They received $13.55 an hour in 2016 and $15.66 this year.
Meant to give a financial leg up to minimum-wage workers struggling with soaring costs of living in Santa Monica (as with metro areas throughout California) the ordinance -– called the $15-by-2020 law -- applies to all worker citywide, although its influence is particularly far-reaching in the tourism sector, which has a history of low-paying jobs.
According to the City’s website, 17 percent of the city economy stems from tourism-related lodging and food services, accounting for 14,910 employees and an annual payroll of $422 million.
By comparison, the higher-paying “Creative Industries and Tech” sector (including Silicon Beach), accounts for 28 percent of the economy, with a total annual payroll of $2.9 billion -- or 41 percent of the city’s total annual payroll.
In total, there were 9, 515 businesses in Santa Monica in 2016, employing 88,848 people.
To report violations of the Santa Monica Minimum Wage Ordinance click here or call the Los Angeles County Department of Consumer and Business Affairs at 800-593-8222.
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