by Valerie Hughes and Aurora Janke
Seattle’s new minimum wage ordinance goes into effect April 1, meaning employers—regardless of size—must pay employees working in the city at least $11 per hour.
Employers with 501 or more employees must pay a “minimum wage” of $11 per hour, while employers with 500 or fewer employees must pay a “minimum compensation” rate of $11 per hour. The definition of “minimum wage” includes wages, commissions, piece-rate pay, and bonuses received by employees. “Minimum compensation” includes wages, tips, and money paid by an employer toward employees’ medical benefits. Thus, small employers are able to count tips and medical benefit payments to help them reach the $11 minimum compensation rate.
The minimum wage and minimum compensation requirements will increase over time and on different schedules based on employer size and contributions toward employee medical benefits until the $15 minimum wage takes effect January 1, 2018, for large employers and January 1, 2021, for small employers.
The number of employees an employer has isn’t location-specific—i.e., employees who work outside Seattle count. Employees are covered if they work in Seattle for more than two hours in a two-week period. Covered employees must be paid the minimum wage or minimum compensation rate for all hours worked in Seattle during the two-week period.
The Seattle Office of Labor Standards, a division of the Seattle Office for Civil Rights, has released proposed administrative rules to implement the new ordinance, and final rules are to be posted in March.
For more information on the new minimum wage ordinance, see the March 2015 issue of Washington Employment Law Letter.
Valerie Hughes and Aurora Janke are attorneys with Perkins Coie LLP in Seattle, Washington. They can be reached at vhughes@perkinscoie.com and ajanke@perkinscoie.com.
And as 2018 approaches toward the $15 minimum wage, more and more companies will find ways to automate to eliminate positions and create more part time jobs as to not get killed with 1 1/2 time overtime rates on the higher rate of pay.