Seattle, Washington minimum wage ordinance upheld; regulations released

A federal district court in Washington has refused to stop the City of Seattle from treating each franchise as a “large employer” for fast phase-in of Seattle’s new $15 minimum wage, and Seattle has moved ahead in issuing its new administrative rules on minimum wage. These rules apply to employees who perform work in Seattle, for all hours worked within the city limits. Employees who only work in Seattle occasionally are covered if they work two or more hours within Seattle’s city limits during a two-week period.

The ordinance will phase in over time, effective April 1, 2015. The pace for employers to phase in the new minimum wage is determined by the employer’s size, with “large employers” required to ramp up to the full $15 per hour at a faster pace (January 1, 2017, versus 2021 for smaller employers). Seattle has defined “large employers” as those with more than 500 employees. For franchises, such as Subway or McDonalds, Seattle will count all employees of the franchisor or network of franchisees nationwide to determine if the business is a large employer.

The International Franchise Association (IFA) filed a lawsuit in Washington federal court, claiming that the new Seattle wage law would put individual franchises at a significant competitive disadvantage. On March 17, 2015, the court refused to put the minimum wage law on hold, allowing Seattle to move forward with its new rules. The IFA has already announced its intent to appeal the decision to the United States Ninth Circuit Court of Appeals (International Franchise Association, Inc. v. City of Seattle, D Wash, March 2015).

Tips: Employers in Seattle must begin complying with Seattle’s new minimum wage schedules starting April 1, 2015. (We’ll leave it to you to decide how April Fools’ Day applies here.) One of the requirements is to prominently display a Seattle minimum wage poster. Contact your Vigilant employment attorney for assistance in implementing Seattle’s new minimum wage regulations. The City’s web page is also a helpful resource, with newly updated FAQs.