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How the 2014 Midterm Elections Impact the Restaurant Industry

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Major decisions regarding minimum wage, paid sick leave... and food/alcohol ratios?

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If the sound of a million jabbering talking heads hasn't made it painfully clear by now, the 2014 midterm elections have come and gone. And while a certain subset of prognosticators are busy guessing the implications of U.S. Senate results and soda taxes, several voter outcomes have a direct effect on the restaurant industry and its workers. Ballot measures in four states tasked voters with deciding whether or not to raise the minimum wage; in others, voters debated everything from paid sick leave to a restaurant's food-to-booze sales ratio. Here's how results at the polls will trickle down to restaurant employees and diners in the coming months:

Voters in Arkansas, Nebraska, South Dakota, and Alaska all decided to give their state's minimum wage workers — many fast-food employees, cooks, and servers among them — a pay increase. When these four new minimum raise wages go into effect in 2015, 29 states will offer a minimum wage higher than the $7.25 federal mandate. (Yesterday, Illinois voters also passed a "non-binding referendum" approving a future minimum wage increase — from its current $8.25 amount to potentially $10 in the near future.)

29 states will soon offer a minimum wage higher than the $7.25 federal mandate.

Residents of two major American cities also approved minimum wage increases at the polls. Oakland and San Francisco residents gave their workers a raise, and the latter has approved its bid to become the second U.S. city with a mandated $15 per hour minimum wage. (This summer, the Seattle city council voted to raise its minimum wage to $15 by 2017.) A location-by-location breakdown:

Arkansas: Voters have passed the Arkansas Minimum Wage Initiative, Issue 5, which yanks Arkansas from the list of just three states (including Georgia and Wyoming) that have a minimum wage lower than the federally mandated $7.25. The increase will raise the current $6.25 minimum wage to $8.50 per hour in two years (by 2017), with an immediate bump to $7.50 on January 1, 2015.

Alaska: Early projections suggest voters have overwhelmingly passed Alaska's Ballot Measure 3, which increases the state's minimum wage from $7.75 to $8.75 by January 1, 2015. The wage will go up an additional dollar in 2016, and promises to "adjust the minimum wage each year for inflation after 2016." In great news for restaurant servers and other tipped employees, the ballot measure explicitly mandates that "tips or gratuities would not count toward the minimum wage."

Nebraska: Thanks to voters' approval of the Nebraska Minimum Wage Increase, Initiative 425, minimum wage will jump from the federal minimum $7.25 to an even $8 on January 1, 2015. One year following, another dollar will be added. State Senator Danielle Conrad told the Daily Nebraskan earlier this week that the wage increase would impact about 146,000 residents, nearly 70 percent of them women.

Oakland, CA: Oakland voters overwhelmingly authorized Ballot Measure FF, raising the citywide minimum wage from $9 an hour to $12.25 (which will go into effect March 2, 2015). On that same date, employers must also provide workers with accrued paid sick leave, with no exemptions for smaller businesses.

San Francisco, CA: San Francisco voters approved Proposition J, Minimum Wage Increase, which will up the city's current minimum wage of $10.74 per hour to an even $15 by July 2018. The wage will increase steadily over the next three years, starting with a bump to $12.25 on May 1 of next year. Once it hits the $15 mark, San Francisco will become the second city in the U.S. (after Seattle) to mandate a $15 wage.

South Dakota: Servers and baristas in South Dakota are about to get a major raise: Thanks to the passing of South Dakota Initiated Measure 18, the statewide minimum wage will be increased from $7.25 to $8.50 an hour, with a promised annual adjustment for inflation. Most crucially for restaurant industry employees, the $2.13 "hourly tip wage" will effectively double to a minimum of $4.25 an hour for all tipped employees.


No more food/booze ratios in Minneapolis: A voter referendum in Minneapolis has abolished a law ratified in 1983 (and amended in 1997) that limited a restaurant or bar's liquor sales. Before voters overwhelmingly repealed the law yesterday, a restaurant located within 500 feet of a residential zone was forced to cap its alcohol sales at 30 percent of its total revenue. (For every $30 bottle of wine sold, for example, the restaurant had to log $70 in food sales to maintain the balance.) The so-called 70/30 ratio affected nearly 70 restaurants in the Minneapolis area, with proponents of the Yes on 2 initiative — food personality Andrew Zimmern among them — successfully convincing voters that the outdated law was hurting small businesses.

Paid sick leave in Massachusetts: More than 80 percent of Massachusetts voters approved the ballot's Question 4, which entitles all employees to accrued paid time off when they're sick. At businesses with more than 11 employees, workers can now use up to 40 hours of paid sick leave each year; businesses with 10 or fewer employees are exempt.