City's minimum pay requirement expands to small businesses; state minimum kicks in

12/31/2007 - 1/1/08

Unlike a year ago, a number of Santa Fe's lowest-paid workers won't get a Jan. 1 pay increase under the city minimum-wage ordinance.

The law does expand in scope, however, to make the current $9.50-an-hour requirement apply to even the smallest Santa Fe employers.

Outside the city, meanwhile, a new statewide minimum-wage increase kicks in today..

The Governor's Office said about 160,000 New Mexico workers will get a boost starting this year as a new state minimum wage of $6.50 an hour goes into effect.

The state minimum rises from $5.15 to $6.50 throughout 2008 and to $7.50 starting in January 2009.

The state change does not affect higher minimum wages already set in the cities of Santa Fe and Albuquerque.

The Santa Fe City Council in November expanded its "living wage" ordinance to affect, for the first time, payrolls of fewer than 25 employees.

The governing body also created a mechanism for future local increases that automatically will lift the wage floor by linking it to a federal inflation index each year beginning in 2009.

The city mailed about 7,000 postcards explaining the change a few days after its approval, said Sevastian Gurule, the city's constituent services supervisor.

The mailers were sent to both those who have business registrations, which declare an operation physically located in the municipal boundaries, and those who have licenses to come into the city to do business.

Gurule said he's had several inquiries about the rules from the latter category.

"We are experiencing this with contractors from Rio Rancho, Albuquerque, Española, who are coming in to do work in Santa Fe," he said. "We are telling them that when they are in Santa Fe they have to pay these employees the minimum wage."

Other calls to his office have come from workers who were expecting the minimum wage to rise to $10.50 this year, Gurule said. The city's original 2002 wage ordinance had contemplated such an increase, subject to council review. However, the recent amendments to the law eliminated this year's proposed increase in the dollar amount.

Future wage increases are tied to the percentage change in the regional Consumer Price Index, published yearly by the U.S. Department of Labor. Had that calculation been used this year, the minimum wage would have increased by about 31 cents.

For wait staff and other gratuity earners, both wages and tips are included in calculating compliance with the minimum-wage law. Interns who are earning college credit are the only workers exempt from the ordinance.

The state minimum will overlap with federal increases that started last summer, but the federal minimum wage will peak at $7.25 per hour in the summer of 2009, which will be below the state's minimum.

Along with the raises, consumers might also see an increase in prices.

Kevin McGrath, who owns the Burger Time restaurants in Las Cruces, said the wage increase will cost his company about $90,000 this year.

"That's $90,000 that's not just lying around on the bottom line. We're going to have to raise our prices," he said. "I'm sure everybody else will have to."

Phillip Archuletta, with the Las Cruces office of the New Mexico Department of Workforce Solutions' Wage and Hour Bureau, said the differing federal and state wage increases have some people confused.

"We're getting a lot of calls this month," he said.

Archuletta said employers must pay whichever minimum wage is higher at any given time.

The Associated Press contributed to this report.

Contact Julie Ann Grimm at 986-3017 or jgrimm@sfnewmexican.com.