Prop 206 has business scrambling to pay for it

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Streets of New York owner Lorrie Glaeser said Prop 206 makes their future uncertain. (23 June 2017) [Source: 3TV/CBS 5] Streets of New York owner Lorrie Glaeser said Prop 206 makes their future uncertain. (23 June 2017) [Source: 3TV/CBS 5]
PHOENIX (3TV/CBS 5) -

Big changes for business owners are on the way as Prop. 206 goes into effect July 1.

The new law putting more money in the pockets of employees, but some say it could force some businesses to close their doors.

"One of the first things I thought is what is this going to cost me as a small business owner," said Jen Johnson.

Just two years in business and Johnson’s bottom line is set to be trimmed significantly.

"It ends up being, between taxes and everything, about $14,000 a year for each employee, so for a small business it's pretty big," said Johnson.

The passage of Prop 206 now has her combing her budget to make sure her employees receive paid sick time and a raise.

Johnson says the higher costs had to come from somewhere, that's why she decided to send out an email to customers explaining why she'd be increasing prices. Johnson says the response from customers was better than she expected.

"A lot of people were shocked that it wasn't more of an increase, but a lot of people were open to it and understood," said Johnson.

Johnson says her employees received the boost in benefits back at the beginning of January.

But Streets of New York owner Lorrie Glaeser says large businesses like hers are still trying to figure out how to pay for the more than 400 employees now cashing in.

"It's very scary, we have not figured it out and we didn't have much time to plan for it," said Glaeser. “We love to take care of our employees but we need to do it the right way so we stay in business.”

Glaser says after 40 years in the Valley, she's not certain that will be possible and hopes her loyal customers stick with her.

"We just don't have the extra, we don't have the profits to pick this up, prices will have to go up," said Glaeser.

Beginning July 1, the minimum wage will increase from $8.05 to $10 an hour.

Companies with 15 or more employees must allow workers to earn up to 40 hours of sick time per year.

Companies with less than 15 employees must allow workers to earn up to 24 hours of sick time per year.

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