News

Ballot initiative would boost minimum wage while reducing overtime

A Republican lawyer who works as legal counsel to Gov. Arnold Schwarzenegger
has filed an initiative that would raise the minimum wage–but also abolish
the eight-hour day for overtime.

Thomas Hiltachk filed the “Fair Pay Workplace Flexibility Act of 2006” with
the Attorney General on Feb. 10. If it makes it to the ballot and is passed
by voters, it would lift the state’s minimum wage from the current $6.75 to
$7.25 on July 1, 2007, and to $7.75 a year later.

Another provision of the initiative would make it amendable only by a
two-thirds vote of the legislature. In practice, this would mean that it
would take a two-thirds vote by the legislature to raise the minimum wage in
the future.

The initiative does not include automatic cost-of-living increases known as
indexing. It would also codify several rules around overtime exemptions for
managers and for employees making over $100,000 a year.

Under the terms of the initiative, workers could agree with employers to
work up to a 10-hour day without receiving overtime pay until they surpassed
40 hours in a week. According to Martyn Hopper, California state director
for the National Federation of Independent Businesses, the only other states
that enforce the eight-hour day for overtime are Alaska and Massachusetts.

“Small business owners are wisely opposed to any increase in the minimum
wage because of the ratcheting effect it has on overall wages,” Hopper said.
But he added that while his group is not the sponsor, it is supporting the
initiative because it represents a “fair tradeoff.”

“We see it as an honest attempt to address a number of major concerns. We
obviously don’t have the votes to get overtime reform through the
Legislature.”

The eight-hour overtime rule has long been targeted by business interests.
Gov. Pete Wilson signed a law in 1997 that abolished the rule. However, one
of Gov. Gray Davis’ first actions when he took office in January, 1999, was
to sign AB 860, which reinstated the eight-hour day.

“It’s a pretty in-your-face attempt to take away daily overtime
protections,” said Angie Wei, legislative director with the California Labor
Federation, of the Fair Pay Act.

Meanwhile, it remains unclear who is behind the Fair Pay Act. California
Chamber of Commerce spokeswoman Christine Haddon said that her group was not
the sponsor and did not yet have an official position.

Barry Hermanson, a past chairman of the San Francisco Living Wage coalition
and major supporter of a 2003 ballot initiative that established an $8.50
minimum wage in San Francisco, said that Democratic inaction could allow
business groups to hijack a popular issue.

The legislature passed AB 48 last year. While Schwarzenegger said he
supported the increase to $7.75, he vetoed the bill over it’s built in
cost-of-living increases.

The bill’s sponsor, Assemblywoman Sally Lieber, D-Mountain View,
reintroduced the legislation last month as AB 1835. She said that her
preference is to try to work with the governor, especially after he cited
the importance of a minimum wage increase in his Jan. 5 State of the State
address.

She also said that Fair Pay Act was “not surprising” and that the dollar
increase in the minimum wage was merely a “fig leaf” being used to overturn
the eight hour day.

However, Hermanson said that it didn’t make sense to simply reintroduce a
bill with indexing.

“I think they [legislative Democrats] still believe they can force the
governor to come to the table and sign the legislation,” Hermanson said.
“But how do you force the governor to do something that he and his backers
said he would not do?”

In November, Hermanson commissioned a poll by David Binder Research that
showed the 73 percent of Californians supported a raise to $7.75 with
indexing. This led him to submit the California Fair Minimum Wage
Initiative, which would call for these to be state law by 2007.

Meanwhile, the group Californians for Fair Wages, of which Hermanson is a
former member, has submitted an initiative that would set a rolling schedule
that would push the wage to $8.75 in 2009, then introduce indexing for
future increases. Sponsors of both initiatives are trying to meet an April
deadline to get enough signatures to quality for the November ballot.

Meanwhile, Sen. Abel Maldonado, R-Santa Maria, has also introduced
legislation to raise the minimum wage. SB 1167 would bring the minimum wage
to $7.75 by July 1, 2007, but does not include indexing. Maldonado broke
party ranks to support AB 48 last year.

Hiltachk did not return phone calls by press time. A partner in the
Sacramento law firm Bell, McAndrews & Hiltachk, he is a well-known
Republican figure when it comes to ballot initiatives. In the 2004 election
cycle alone he filed three: Proposition 61, to sell bonds to finance
expansion of children’s hospitals; Proposition 67, a telephone surcharge to
pay for emergency services; and Proposition 69, to create a DNA database of
felons. Of these, only Prop. 67 failed.

In the early 1990s, while at the firm of Nielsen, Merksamer, Hiltachk did
work for the Los Angeles Hospitality Coalition, a smoker’s rights groups
with funding from R.J. Reynolds and Philip Morris.

In addition to up to three minimum wage initiatives, voters will also see
other workplace-related measures this fall. This includes three separate
initiatives that would overhaul the state’s worker’s compensation rules.


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