Emeryville, a San Francisco suburb and home of Pixar Animation Studios, raised their minimum wage on July 1 from $15 to $16.30 per hour — making it the highest rate in the country. 

The upgrade comes after an ordinance was passed in 2015 that mandated a minimum wage increase every year in an effort to increase pay for hourly workers — but small business owners are concerned that the hike in costs will hurt them. 

According to the ordinance, an amendment was adopted in May that established a $15 per hour minimum wage for “Small Independent Restaurants” (restaurants with an employee count of 55 or less) for fiscal year 2019-2020, after which the rate would gradually increase until 2027, when it would be brought to the same level as other businesses. 

Officials said the goal of the amendment is to prevent job loss by ensuring that small business owners can stay afloat without having to cut staff, but unions and advocates who filed a referendum petition against the amendment say it hurts hourly workers and sets a dangerous precedent. 

The petition has enough signatures to send the amendment back to City Council for further review. The registrar of voters could make a decision on the amendment as early as Tuesday July 9, or they could decide to bring it to the voters at a future election, but in the meantime, restaurant owners are left wondering about their payroll. 

“Business owners are coming in incredibly freaked out. They don’t know what to do,” said Mayor Ally Medina told the San Francisco Chronicle.  “It’s terrible. Workers don’t know how much they’re going to be paid. Businesses set their payroll a month in advance. It’s messy.”

The referendum will remain in effect until a decision is reached on the results of the petition. If City Council accepts the certification of the petition results, Small Independent Restaurants will have to comply with the $16.30 per hour minimum wage.