Are You Paying Your Employees Enough? Seattle’s New Minimum Wage Ordinance Goes Into Effect April 1– Posted by Hillary J. Collyer
The long awaited date is almost here. On April 1, 2015, Seattle’s new minimum wage law goes into effect. And this is no April fools’ joke. As an employer, you need to be prepared to comply with the new ordinance or potentially face penalties imposed by the law.
The minimum-wage ordinance, which was passed by the Seattle City Council and signed by Mayor Ed Murray on June 3, 2014, provides that starting April 1, 2015, large employers (those with more than 501 or more employees) must pay workers a minimum wage of $11.00 per hour. Smaller employers (those with 500 or fewer employees) must pay what the city calls “minimum compensation” of $11.00 per hour. There are two ways for smaller employers to reach the minimum compensation: (1) pay a flat hourly rate of $11.00 per hour; or (2) pay a reduced rate of $10.00 per hour and make up the $1.00 difference in tips or payments towards medical-benefits. If the tips or payments for medical-benefits the worker receives do not make up the difference, then the employer must do so each pay period. The minimum wage paid by both large and small employers is scheduled to increase each year on January 1st until the $15.00 amount is ultimately reached.
The law applies to all employers who have employees working in Seattle. To calculate employer size, an employer counts its total number of employees nationwide regardless of whether such employees work in Seattle.
The city has approved of a new Office of Labor Standards within the Office for Civil Rights, which will be tasked with administering the minimum wage ordinance, along with other city wage laws, including the paid sick and safe time ordinance. The city has proposed administrative rules for administering the law and final rules are expected to be posted sometime this month, before the ordinance goes into effect.
During the first year the ordinance is in effect, enforcement measures will include outreach and education efforts. Thereafter, penalties including back wages, interest on wages owed, and monetary fines will be imposed on employers who violate the law. The ordinance could potentially be enforced by using “directed investigations.” Such investigations arise not by an employee filing a complaint, but where the Office of Human Rights initiates its own investigation of an industry that historically relies on vulnerable workers (e.g., the restaurant, construction, janitorial industries, etc.). For more information about the new law, visit:http://www.seattle.gov/civilrights/minimumwage.htm.
If you have a question about the minimum wage ordinance or Washington’s wage laws in general, please contact Hillary Collyer, who can be reached at (206) 624-1230.