Based on testimony presented at a Monday city council session, Duluth’s business community remains strongly opposed to the Earned Sick and Safe Time (ESST) ordinance being advocated by a local task force.
“Your disregard for our concern is difficult to witness and challenging to accept. We asked for your support; you responded with indifference,” said David Ross, president and CEO of the Duluth Area Chamber of Commerce. “The chamber’s leadership looks forward to a day when a future city council will provide employers as much empathy and advocacy as you are providing employees.”
In brief, the proposed ordinance currently would require employers to provide sick and safe time at the rate of one hour for every 30 hours worked. Employees may accrue up to 64 hours a year and carry over up to 40 hours of unused time into the following year.
Several amendments have also been discussed but not formally added to the ordinance. They are expected to be introduced when councilors meet in two weeks.
During Monday’s first reading of the ordinance, restaurateur Carol Valentini presented her family’s philosophy, which she called “Restaurant Reality 101.
“You cannot survive without financial balance. You cannot grow without customer service balance and certainly will not be sustained without employer-employee balance,” Valentine said. “I come from the servant leadership generation. We give more than we take. I, like many in this room who represent the restaurant business, take care of employees in many ways that do not carry a price tag.”
She noted that 50 percent of restaurant start-ups fail within three years. Proven financial formulas that guide restaurants to be profitable, Valentini explained, “will be completely out of balance with the high cost of this ESST.” That’s especially true, she added, because Duluth is the highest-taxed city in Minnesota. While she lauded the value of company benefits, Valentini said somebody has to pay for them, and she questioned whether the city would fund part of the financial burden.
Ross said he has passed along members’ concerns for 21 months and helped to develop an acceptable ordinance.
“We provided volunteers for the task force, for the work group, we distributed surveys, we spoke and attended public hearings and we evaluated various proposals, yet it appears that you are poised to disregard our work, our appeals and our logic,” he said.
Third generation restaurateur Cullen Flaherty said family owned BlackWoods has always taken care of its employees, but it isn’t right to force a blanket rule on the food and beverage industry.
“Please let us run our business and continue to take care of the people who choose to work with us,” he said.
Possible amendments to the ordinance, said Greater Downtown Council President Kristi Stokes, will lead to more automation, reduced employee benefits, fewer work hours and staff reductions.
“If some of these amendments proposed tonight gain support, you will be hurting individuals who provide the jobs that you are trying to protect,” she said.
Judy Aspling of Center City Housing said the proposal will force employers to hire replacement workers at a higher pay rate, possibly at the overtime rate. Keeping track of hours worked will be more complicated, and payroll systems will need to be modified. The rules would force her organization, and similar ones that receive government funding, to seek more money from the public sector.
Grandma’s Restaurant Co. President Brian Daugherty said he invited city councilors to sit down with him so he could explain the firm’s policies and the ESST’s financial impact, but received no response. He noted the added benefit costs for this year exceed the profit estimate for all of 2018.
“The message I get from you guys is ‘Figure it out. You deal with it. We’ll give you the policy. You figure that out.’ It’s a little unfair,” he said. “I have some solutions, I have some answers and I’d like to talk about them.”
Ordinance proponents, however, said the business community has historically opposed change. They raised concerns about income disparity in Duluth, and some said stronger amendments are needed.
“I ask you to be bold and not take half measures,” said Katie Humphrey. “If this ordinance passes as is, without any amended language, or even with some of the amended language in the queue, it would be one of the weakest ordinances in the nation. The Vision Duluth campaign feels this would be an embarrassment and unacceptable for Duluth workers and their families. The current draft is a step back.”
Councilor Jay Fosle pointed out that Duluth’s population isn’t growing, and the tax base is declining. Meanwhile, businesses are taxed higher than individuals.
“When I hear words like ‘worker protection,’ I know this is being pushed by unions,” he said, noting that some people “want things for free.”
By rule, all proposed ordinances must be aired twice by the council. If amendments are approved on March 26, the ordinance must be read another time, said Council President Elissa Hansen.