Albuquerque restaurant refuses to pay minimum wage

The owner of the Route 66 Malt Shop in Albuquerque acknowledged to KOB-TV he’s refusing to pay a new city minimum wage recently approved by voters.

Here’s the video from the station’s report:

The most pertinent points from the written part of the story:

Owner Eric Szeman said he warned employees of layoffs when the ordinance was proposed and admits he approached O’Leary and his tipped workers with an employment contract. […]

When asked whether that compromise was made by not following the city’s ordinance, Szeman responded, “Yeah.” […]

The City of Albuquerque says it is not legal for a business owner to draw up a contract, paying employees below the minimum wage.

But, the city says, ‘The city is not responsible for enforcing this because it is a “self help” ordinance.” An employee could potentially file a lawsuit against his or her employer.

This seems a “cutting off your nose to spite your face” moment by Szeman. He says his payroll rose from $3,600 every two weeks to about $6,000. But defending the inevitable lawsuits and alienating potential customers due to this story will cost him more. Wouldn’t it have been easier to raise the prices on his food and comply with the law?

UPDATE 2/19/2013: Protesters showed up at the restaurant Tuesday, according to KRQE-TV, and about 200 more signed a petition to boycott the eatery.

Wage protestors target malt shop

KRQE also reported earlier that Szeman made this specious claim:

“The lowest paid waiter makes more than I make. Of course, the lowest paid waiter makes more than my wife makes, I make and our son makes combined.”

The Albuquerque Journal reported that 60 people showed up at the protest.

UPDATE 2/20/2013: The 66 Diner down the road told KOB-TV it is being affected by the dispute. It is being confused with the Route 66 Malt Shop.

7 thoughts on “Albuquerque restaurant refuses to pay minimum wage

  1. Hmmm…I wonder if he already sought legal council that suggested the contract would let him out of this in some way?

    A 66% jump in labor costs. Glad I’ll be a visitor, at best, to that market.

  2. Small business people are in trouble all over – I believe there is going to be a lot more unemployment due to more small businesses being squeezed even more than they already are. The profit margins in food type businesses I understand are already tiny. I would not deal with the situation by breaking the law, I would consider cutting hours of operation to cut payroll, try to do with less employees or close the business and either move to a city with more business friendly laws or switch to a type of busienss that does not require employees. All of those options are bad for the economy but a lot of people think just voting people a raise is a quick fix but they don’t think about where the money comes from. If you’re unemployed or underemployed like many are and many more will be and eating out is already something you have to cut back on, would you be willing to pay higher prices for your food, or would you rather just eat at home? Cities should look at other cities that are attracting businesses and see what they are doing right. ABQ doesn’t need more empty buildings.

  3. I’ll add that what in my opinion it’s up to the employee to decide for themselves if the wage is acceptable, if the employee and employer are both in agreement about the wage I don’t understand how it’s anyone else’s business.

    1. I’d be more sympathetic to Szeman, except he’s spouting all sorts of B.S. to the media. He actually told KRQE that his lowest-paid employee “makes more than my wife makes, I make and our son makes combined.” If that’s the case, he’s a worse businessman than I thought.

  4. There is a saying don’t complain to me abou the profession you decided to enter into.If you don’t like it quit and go somewhere or into something else
    A person knew the pay scale when they started at that job.
    As long as he is complying with state and Fed law I do not even see how a lawsuit can be won by an employee. The city itself says it has no power to enforce an ordince that they passed if that is the case then why did they pass an un enforceable ordinance ? Seems like a lot of wasted time by the city council to me.
    Ron I agree with you he needs to hire a business manager if what he is saying is true.
    Having said that, I think it is more about the city passing an unenforceable law and then I think even more poor character on the cities part by suggesting that employees try to sue him
    Like Mssouri66 says if the employeer and employee agree on a wage that is between them
    I understand that it may be the only job around and you take what you can get,most are young employees that work here I would bet. Not one of them probably cares if they have a job the next day or how good or bad themade your order or how much they waste and give away

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