Sacramento City Council Votes to Increase Minimum Wage to $12.50 by 2020

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Passions ran high and patience low as police stepped in at Sacramento City Council chambers -- arresting two members of the Alliance of Californians for Community Empowerment.

Those labor advocates from ACCE were cussing at Mayor Kevin Johnson as 30 minutes of comment opposing a compromise plan for a new minimum wage in the city were wrapping up.

Before that, there were calm but firm stands against a plan that underwent a major makeover in the last 36 hours.

"This is going to put us $100,000 behind and back behind the 8-ball," said Doug Link, with the IMAX Theater in Sacramento.

So what's no longer in the plan?

The controversial -- and turns out illegal -- feature letting employers count tips as pay, effectively reducing the proposed $12.50 hourly wage companies would have to offer.

Out as well are exemptions allowing some people with developmental disabilities and workers under 18 to be paid less.

Concessions made to the business industry in the compromise?

Redefining the notion of a small business from 50 employees or less to 100 or less with such ventures being given an extra year to start paying the new wage.

That's not what this fight was supposed to be about, according to some labor groups.

"We did the number crunch today ... 89 percent of small businesses would be excluded from this ordinance applying to them, which is sort of ridiculous," said Tamie Dramer with Organize Sacramento.

Also ridiculous to Dramer's group and others is business concession allowing $2 worth of what employers pay into an employee's health coverage to reduce the amount they pay that worker each hour by $2.

"It's not acceptable for us because there's no incentive for our members," said Lino Pedres with the Central Labor Council and SEIU - United Service Workers.

According to business advocacy group Region Business,  if the tip provision was gone, the health credit was a good substitute.

"We do believe that increasing the health care credit is something that can protect small businesses. And also it's good for employees because what it's going to do is  incentivize employees to keep them on their health care coverage ... so it's a win-win for Sacramento," said Region Business CEO Josh Wood.

Still there was a lot of concern on the council about what the proposal really meant.

Angelique Ashby questioned why they city acted alone as opposed to waiting for the state to take this issue on or trying to create a regional initiative.

The mayor pro tem suggested this step might make the city less competitive and not deliver what workers were really after.

In the end, the $12.50 wage was approved 6-3 to a chorus of "boos" in the council chambers.

Labor groups are already promising to sue over the health credit.