Fast-food franchise owners are vowing legal action to challenge the state Labor Department's decision to raise fast-food workers' wages to $15 an hour. The decision was announced Thursday by Gov. Andrew M. Cuomo, who pledged to push for the same raise for all hourly workers.
The governor's fast-food wage board's "rush to judgment and limited hearing process has prevented . . . franchisees from having the opportunity to make their case as the only small-business owners directly affected," said Manhattan attorney Randy Mastro, who represents a coalition of franchisees. "And those effects can be devastating, putting many of them in jeopardy."
Mastro said he plans to appeal the decision and "pursue all legal remedies to stop this illegal action from taking effect."
Other business owners also expressed concern over the decision and Cuomo's push for higher wages across the board.
Rob Basso, president of Freeport-based Advantage Payroll Services, which has more than 3,000 clients, said the hikes will hurt business owners.
"It's not that they don't have sympathy for their staff," Basso said. "But they are in business to make a profit. Raising it to $15 is going to hurt the small businesses further when we are just getting back on our feet."
Even one business owner who supports higher wages said she fears the big increases will jeopardize local companies' recovery from the recession.
Marilyn Schulman, owner of gift boutique Willy Nilly Trading Co. in Bay Shore, said that while the fast-food wage hikes will put more money in fast-food workers' pockets, the increases will also put pressure on all businesses to raise employees' pay even if they already earn above $15 an hour, as she said most of her workers do.
"It will make people want more," Schulman said. "But the problem is that profits haven't been that great."
The fast-food raises will be phased in. They will rise to $15 an hour in New York City by Dec. 31, 2018, and elsewhere in the state by July 1, 2021. The current minimum of $8.75 is set to increase to $9 on Dec. 31.
Cuomo set the process in motion in May, when he empaneled a wage board that recommended the increase. He plans to introduce a bill in the next legislative session that would raise the minimum for all workers. Republicans and business groups have vowed to fight it.