September 2014 Bar Bulletin
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September 2014 Bar Bulletin

Seattle's New Minimum Wage Ordinance: What You Should Know Now

By Stephanie R. Lakinski

 

Assuming it survives legal challenges, Seattle's new minimum wage ordinance will have sweeping implications for employers both in and outside of Seattle. Much remains to be seen - future regulations will give further definition and clarity to the ordinance - but here's what you should know now.

Q: What is the ordinance about and whom does it affect?

A: Beginning April 1, 2015, the ordinance will raise the minimum wage over a period of several years so that Seattle employees eventually are paid $15/hour (more on this below). That rate will continue to rise with inflation, so employers should expect yearly increases for the foreseeable future.

The ordinance applies to employees for each hour worked within the geographic boundaries of Seattle. "Employee" is defined as "any individual employed by an employer," excluding certain narrow categories of workers already exempt under the State Minimum Wage Act. This means that even if an employer is not based in Seattle, the employer still will be obligated to compensate employees who perform work within Seattle's city limits. Employers will want to carefully track the time and location of their employees performing work in Seattle.

Q: Does the ordinance treat employers differently depending on the number of their employees?

A: Yes. The minimum wage varies during the initial phase-in period depending on the size of the employer. Eventually, however, all employers will have to pay their employees $15/hour. A large employer (referred to as Schedule 1 Employers in the ordinance) is one that employs more than 500 employees in the United States, regardless of their location. Conversely, a small employer (referred to as a Schedule 2 Employer in the ordinance) is one that employs 500 or fewer employees anywhere in the United States. Both full-time and part-time employees are counted in determining the size of an employer.

Separate legal entities may be considered a single employer. The factors to consider in making this assessment include: 1) the degree of interrelation between the operations of the multiple entities; 2) the degree to which the entities share common management; 3) whether there is centralized control of labor relations; and 4) the degree of common ownership or financial control over the entities.

Q: What does $15/hour mean? Does it include tips or bonuses?


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