Restaurants challenge minimum wage
by Tedhttp://www.coloradoan.com/apps/pbcs.dll/article?AID=/20080908/UPDATES03/80908036
A group of rural business owners is suing the state over its minimum wage law adopted by Colorado voters in 2006. The constitutional amendment, known as Amendment 42, adjusts the minimum wage annually as the cost of living goes up.
In January, the minimum wage jumped to $7.02 for non-tipped workers, $4 for tipped workers, higher than the federal minimum of $6.55 and $2.13 respectively. Colorado’s minimum wage is projected to go up again in January to $7.28 and $4.26.
The actual increase is based on the consumer price index used for Colorado. But the Bureau of Labor Statistics that produces the consumer price index does not have a CPI for Colorado. Instead it uses the index for the Denver/Boulder/Greeley metro statistical area.
As restaurants in particular feel the pinch of rising food, energy and labor costs, the lawsuit filed Aug. 21 in Denver District Court alleges it’s unfair to use Denver/Boulder and Greeley’s CPI to set wages for areas as disparate as Fort Collins, Grand Junction, Salida, La Junta, Gunnison and Pueblo.
Our members are having a difficult time because of a combination of factors, including the economy, minimum wage increases, increases in food and gas, Herman said. It says the amendment unfairly targets restaurants who employ tipped workers. Tips have already gone up, the lawsuit argues, because of higher prices charged by restaurants to compensate for higher food and labor costs.
The vicious circle of inflation will occur each year with higher prices caused by hikes in labor and food costs, which will cause tips to go up, which will force higher prices, and on and on, the lawsuit argues. As a result of Amendment 42, the plaintiffs have been forced to raise prices, decrease staff hours, terminate workers and decrease or eliminate employee benefits, the lawsuit argues.
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