Morning Roundtable on Seattle Minimum Wage Increase
With the national publicity the Seattle City Council’s June 2, 2014 vote to gradually increase the city’s minimum wage to $15 per hour has received, employees and employers alike have been left pondering how the increase will impact them. Accordingly, we will address the pressing questions raised by this week’s announcement.
Question: “What is the minimum wage in Seattle now?”
Answer: Currently the minimum wage in Seattle is $9.32 per hour, which is the Washington State minimum wage. The federal minimum wage is $7.25 per hour. All employees should be making a minimum of $9.32 per hour, no matter the size of the employer.
Question: “I read the minimum wage increased. Can I expect a larger paycheck in two weeks?”
Answer: Unfortunately for employees, the answer is no. Although the Seattle City Council voted on June 2 to gradually increase the minimum wage to $15 per hour, the first increase does not take effect until April 1, 2015. Interim paychecks for minimum wage employees will remain the same.
Question: “My business employs more than 500 employees. When do I need to raise the minimum wage?”
Answer: “Schedule 1 employers are those employers who employ more than 500 employees.” Such businesses are required to raise the minimum wage to $11 per hour by April 1, 2015 and must reach $15 per hour in 2017.
Question: “I read that if I currently provide health insurance to my employees I can hold off longer on increasing the minimum wage. Is this correct?”
Answer: Possibly. Employers who employ more than 500 employees and provide health insurance must reach $15 per hour by 2018.
Question: “My ‘mom and pop’ hardware store employs 10 employees. When must we raise the minimum wage?”
Answer: Employers with fewer than 500 employees (“Schedule 2 employees”) must raise the minimum wage to $10 per hour by April 1, 2015 and must reach $15 per hour by 2019.
Question: “I work for a (non-franchise) family diner that employs 30 employees as a server who earns tips. We receive paid health benefits. When can we expect to see our wage increase? Also, can we include employee tips in computing the hourly rate?”
Answer: Interesting question. Small businesses that offer paid benefits or have employees who receive tips can wait until 2021 to phase in the $15 minimum wage. Further, tips can be included in the hourly rate for the purpose of determining whether the minimum wage requirement was met. Therefore, your minimum wage may not increase at all.
Question: “I own a restaurant franchise, but we only have 10 employees. Will I be treated as a small business, regardless of the amount of employees across the entire company?”
Answer: No. The ordinance treats franchises (regardless of individual unit size) as “Schedule 1 employers” who would be subject to the faster timeline for reaching the $15 minimum wage.
Question: “Does this ordinance supersede Washington State wage and hour laws?”
Answer: Only to the extent that on April 1, 2015, all employers will be required to raise the minimum wage paid to employees to $10 per hour, which is higher than the current $9.32 per hour required under state law. All other pay requirements; payroll and records requirements; overtime requirements; posting requirements; and other Washington State wage and hour laws (as well as federal issues not covered by stricter state law) must be complied with.
As more information about the enforcement and implementation meetings becomes available we will be adding to the questions and answers above. If you are an employer or employee with questions about how the Seattle minimum wage increase will affect your obligations or rights, do not hesitate to contact the employment attorneys at HKM at (206) 838-2504.