Seattle’s minimum wage law goes into effect — but first, a Capitol Hill victory lap

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Council member Sawant stops inside a Capitol Hill Starbucks — but not for coffee (Image: CHS)

IMG_7434“Hip, hip, hooray! Seattle’s getting a raise!”

Around 100 people chanted the refrain while marching through Capitol Hill Saturday afternoon to celebrate the city’s new minimum wage law going into effect Wednesday.

City Council member Kshama Sawant joined labor leaders and activists to pass out informational flyers and balloons to workers inside the neighborhood’s chain businesses.

The march was a victory lap of sorts for $15 Now activists and a handful of workers who staged numerous rallies and marches around the neighborhood over the past year. Capitol Hill served as the backdrop to some of the most important events on the march to $15, from an early walkout at the Madison McDonald’s to Mayor Ed Murray enacting the minimum wage law. In between, there were symposiums, forums, studies, and countless speeches.

It will all come to a head Wednesday, when the minimum wage at Seattle employers with more than 500 employees will rise to $11 — an 18% jump. Employees at smaller companies with no tips and no medical benefits will also have a $11/hour floor. Small employers of tipped workers and employers that provide medical benefits may pay a $10 minimum and make up the balance with credit for the tips.

There are some exceptions to the large employer track. Public entities are not subject to the wage hike, including the University of Washington. One of Capitol Hill’s largest employers, Seattle Central College, is also exempt, but administrators at the Seattle College District have decided to increase wages on the same schedule as the city law.

“The district supports the city’s goal to offer workers a path toward earning a livable wage for their labor,” SCD spokesperson Maria Lamarca Anderson told CHS in an email. “Since that goal is clearly aligned with the district’s mission to equip its students with the education and training needed to be more competitive in our job market.”

After passing out flyers to workers inside the First Hill McDonald’s, which is slated to close to make way for a new mixed-use development, Sawant addressed the marchers in the restaurant’s parking lot.

“Only a year ago I was at City Hall fighting it out with big business and we were out here on the street,” she said.

Most Capitol Hill food and drink owners will only be required to raise employee wages by less than a dollar if they aren’t already making $11 an hour plus tips. But over time, the phased in wage hike could bring about fundamental changes to the tipping system.

Lost Lake and Comet owner Dave Meinert, and a member of the mayor’s Income Inequality Advisory Committee formed to pound out a middle ground in the debate, told CHS that a move towards service charges and increased prices could come to restaurants far before the full implementation of a $15 an hour minimum wage in 2021.

“I think we’ll see bigger restaurants move away from tipping right away and I think that will start a trend that will take hold really quickly,” he said. “I think in two years tipping may become an outdated business model.”

In the meantime, Meinert said the increase would not drastically effect bars and restaurants and had no concerns about the law he helped to forge as part of the mayor’s income inequality task force.

Some business owners, like Meinert, who publicly pushed back against an immediate increase to $15 we’re strongly rebuked by activists. After a year of debating the issue on Twitter and other forums, Liberty owner Andrew Friedman told CHS he was done commenting on the issue publicly.

State Sen. Pramila Jayapal, who is sponsoring a $12 an hour minimum wage law at the state level, handed out high fives and flyers inside the Broadway Starbucks during Saturday’s march. “We still have a lot of work to do across the state,” she said. Jayapal, who represents the 37th district, recently endorsed Sawant in her bid to represent District 3 (CHS coverage).

The schedule for the full implementation of Seattle’s “$15 minimum wage” law calls for workers at employers of all types to reach that level by 2021:HkE92YN

Not ever employer is waiting six years. Earlier in 2015, Central Co-op announced it would begin offering offer entry-level wages of $15 as part of its new contract with employees.

In addition to the Seattle wage hike, there are a few other employer mandates under the law:

  • Written notice to employees of pay rate and tip policies at time of hire or change of employment.
  • Requirement to pay wages and tips.
  • Written notice of employees’ tips each pay day.
  • Written notice to employees of their rights to wage and tip compensation.

The city’s Office of Labor Standards is responsible for enforcing the law and handling violation reports. You can find out more about the minimum wage law here.

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36 thoughts on “Seattle’s minimum wage law goes into effect — but first, a Capitol Hill victory lap

  1. There is a very interesting article in today’s Seattle Times about the decision by Ivar’s Restaurants to raise their wage to $15/hr immediately for all employees, and to institute a no-tipping policy (these changes will not apply at the quick-serve seafood bars). To offset the increase in labor costs, prices will rise 21% for each menu item, and this money will be shared among restaurant hourly staff (8% to servers and bartenders, 13% to everyone else).

    The bottom line, for customers, is that Ivars is mandating a built-in “fee” of 21%, but of course this is mitigated by the no-tipping policy. I wonder if other restaurants will follow suit.

    • I doubt many will simply because of the overhead of tracking it all.

      What I want to know is (in general), should I tip more or less after Wednesday?

    • Less. They make more, you tip slightly less. That’s a “service included” situation. When it gets to $15/hr you don’t tip at all, or leave a buck or two if you want. If a movie theatre worker doesn’t get tipped, why should a server who is making the same amount? Parity.

    • dude, fuck that. You’re telling me because I haven’t gotten a raise in 3 years working at bars and now the city is mandating a minimum wage increase, you, my customer, are going to stop tipping for the same level of service that you received before the wage hike? I’ll tell you flat out that’s shitty.

      Allow me to educate you if you don’t know: I have to claim my tips, which means these are documented and removed from my paycheck. Let’s say I have to claim $100, this is removed from my paycheck, as I’ve already made that money. I am not awarded that $100 on top of my hourly.

      So what you’re telling me that as I take care of you all night, and you decide to lessen my tip because now I make $1 more an hour in documented wages. You’re spitting in my face man, for what reason? It’s not making my situation any more livable that you are going to “let the policy take care of it.”

      If you actually do ever want to tip for good service, tip cash and tip well. Because of the way this is panning out, tipped employees might really get the raw end of the deal.

  2. So I guess as a bartender I will start phasing out being nice to you and how much booze you get in your drink. As a bartender or server, I would be furious to make 8% in a no tipping establishment. Hey people it’s expensive as shit to live in the city and I’ve been mastering my craft for almost 15 years for the tips, which make it possible for me to live here. To watch some 21 yr old dick-farmer who’s can barely make a Long Island make the same as a veteran mixologist is ridiculous. As a long time restaurant/bar worker I just can’t support this move, but I’m forced to in order to have a job.

    • The Ivars way is the way of the future. Many restaurants in NYC have already instituted similar policies.

      This is only happening at their sit-down restaurants (where a typical server makes $60K a year!). They will monitor things on a pay-period to pay-period basis and will ensure that their staff are making the same or more than they did in 2014. They anticipate that this will result in an increase for most of their staff. It is essentially moving to a commission based system, which still provides incentive to staff for the entire business to do well, for owners to provide proper staff training and to schedule enough staff while taking the onus off of the customer to ensure that their servers can make a living wage.

      This is the restaurant model of the future and I think more consistent with how restaurants are run in most of the rest of the world. Tipping is a very uniquely American thing. At least at the level we tip.

      I think this is a great move on Ivar’s part and am excited to see how it all works out. Unfortunately I don’t eat seafood, so I wont be experiencing it firsthand.

    • On another not, this move will also probably help the IRS collect millions in income taxes due to criminal under-reporting of tips! It looks to be a win-win for everyone. Except tax evaders. Which I think might be why this may be resisted by many tipped workers.

    • if you better understood the internal financial side service industry, you would know that in the last 10 years credit and debit card payments (and attached tips) in restaurants have gone from the mid 70 percentile to the upper 90 percentile. when you leave that tip via your credit card (as nearly most or you do, and that’s okay) the employee is not “getting away” with anything.

      additionally, washington state law requires employers to declare 15% of a server/bartender’s total sales as tips. with documented credit and/or debit sales in the high 90 percentile, restaurant employees (again) aren’t really getting away with anything.

      last year, i DID make more tips than my employer declared for me: about $2K … which i, in turn, declared as extra on my tax return.

      do a little more research before you go calling an entire employees in an entire sector dishonest cheaters.

    • No fan of Sawant here, but I think the Mayor was the driving force behind this law. She wanted it to be $15 immediately with no phase in. He out politicked her and stole her thunder by negotiating this deal between businesses and labor.

      In any event, nobody has the right to eat out on the backs of people who make poverty wages. If you can’t afford to eat at places that pay living wages then eat at home. Get over it.

    • So, Tyson, the only reason you are nice to people and put a normal amount of liquor in their drink is because they tip you? How about doing these things just because they are professional and fair?

  3. so now everything is going to be a little more expensive and those making $15 an hour still cant afford to live in the city. The problem isnt that people at the bottom arent making enough, the problem is that those at the top are making too much

    • This is why the $15 minimum wage doesn’t work. People currently making more than the minimum wage have to deal with higher prices but don’t get any more money. A small minority gets a raise, but most of them live outside the city. Business owners make the same or more as they do now have an excuse to get rid of tips, raise prices, and lower pay for some workers. But Sawant gets heaps of praise and gets to keep her $110,000 per year job because of it.

  4. Service workers, you can’t have it both ways. Your ‘leaders’ have decided to help you make a living wage of $15.00. I personally hate tipping. I have employees and pay them a living wage, paid leave, and health care along with other benefits. Great work is expected and no tips are available from our business customers. No tips to the great person who helps at a store, or to the majority of those who serve us. Give us good reasons we should not lower our tips when prices go up and wages go up?

    I applaud Ivar’s. By all means charge me more, but stop this nonsense of expecting a tip on every transaction as a threat/condition of being ‘nice’. And employers, pay a decent wage, and build it into the charges.

    I much prefer the way of Europe where serving is a profession and tips are not part of the picture. I hate the extended hand at hotels, and

    And by the way, don’t impose a 20% surcharge, just charge more and stop the games. And stop tip creep to 20+ plus. Ignore the auto tip buttons unless they offer a 10-15% option.

  5. How much of the minimum wage increase is likely to be lost to the increase in taxes that takes place the same day?

  6. why would yall want to make minimum wage $15 hour. Will the people that already making $15 hour keep making $15 or will the pay be raised to.

  7. Tipping

    Where food and beverage sales with service are involved as in a restaurant or espresso stand or shop, tipping is a de facto sales commission determined by the recipient of the product. It is not set by the business, it is not included in the price. The customer determines if the service, not the product, received while the product was being ordered, presented, consumed, is worth the customary commission, a tip, of 10, 15, 20 percent. The customer does not make these decisions when purchasing a car from a sales lot, a house from a real estate agent, furniture in a furniture store, or any other item where commissions are customary. Just as with those businesses the food and beverage industry relies on these ‘commissions’ as ordinary compensation for the service staff. The service staff works for those commissions, sometimes works hard and well, sometimes not. Tipped employees are required by law to report all tips to their employer who in turn must report them to the IRS. Yes, tipped employees, especially food servers, do report their tips especially if that tip shows up on the bottom of a credit or debit receipt. The ‘house’ does not pay any taxes on tips therefore the server is required to do so. When those taxes and all other taxes required are taken from the paycheck half or more of the wage earned is gone. Servers work for tips.

    In banquet and catering businesses a 15 to 20 percent service charge is automatically added to the bill as stated in the contract signed between the parties involved. This is not a gratuity. According to the law if it were titled, ‘gratuity’ the entire amount must go to the service staff. As a ‘service charge’ a portion, determined by the ‘house’, can be and is taken and used at its discretion. Often the portion retained is used to pay bonuses to the sales staff. In a few ‘houses’ the service staff does not receive any portion of the service charge and is paid 2 to 5 dollars above minimum wage. In those instances those servers are making considerably less than servers receiving some portion of the service charge.

    If a restaurant or similar business wants to discontinue the customary practice of tipping but wants to retain the incentive to sell and give good service it could add, ‘commission’ or ‘service charge’ to every bill. Businesses could attract and retain good employees by the percentage of the service charge a server receives.

    • Kate, appreciate your perception and protection of the status quo. But as a person who works in and runs a business where employees are paid a living wage, and get benefits – and as one who has travelled the world where tips are not the norm but good service is expected – I disagree.

      First of all, our City Council in their wisdom has decided that people in the service sector making less than 15.00 per hour are underpaid – ignoring the reality of tips that bring many a server or bartender into the middle class – not all, but many.

      When I learn that a server who I knew until tomorrow was receiving very little salary and relied upon my tips, is now receiving a lot more, and assume that the restaurant is raising their prices – why on earth should we the public not respond?

      And it is nonsense to claim that you lose half your wages in taxes. Tax rates for a person making 50K or less is a heck of a lot less than 50% – more like 20-25. And surprise, we all pay taxes and zero sympathy ought to go to the person who is underreporting income, as is likely the case with those tipped in cash.

      The business model of tipping is broken and many of us, regardless of our income or ability to pay, resent the experience and avoid dining out to a degree in response. And I never allow a hotel to carry my luggage unless I am overburdened. The looks I get when I choose to go it alone, are not pleasant and I always tip on the pre-tax amount at least at 15%, but as the cost of dining goes up, this number may decline. And the tip creep to a 20% base in taxis and things like Square payment is an insult. Uber is successful in part because tipping is not allowed, and one can rate the driver and the driver can rate the passenger. Care to compare Uber to a Seattle taxi anyone?

      Bottom line is that nobody likes to be made a fool of. And this is a free market. Our city is now mandating a ‘living wage’ for servers. For every action expect a reaction Don’t like your server job, find another one. Anyone who has the ability to work at a level that tips are deserved, has any number of options open to them.

    • Wonderful. Thanks for your work. I bet you did not ask for the Council to help you. Their paternalistic help has achieved the opposite. You are quite likely to see your earnings drop. Rational people like me and many others have the ability to vote with our patronage and wallets. While we may have voluntarily tipped well in the past, knowing the base salaries were so low as to compel it, when the fundamental rules change, we adapt as well.

    • The “base salary” today for restaurants with under 500 employees is 0.68 cents higher than it was on Tuesday, March 31st.

      For those with over 500 employees is is not $1.68 higher than it was two days ago.

      I’d say they are still pretty low.

    • The “base salary” today for restaurants with under 500 employees is 0.68 cents higher than it was on Tuesday, March 31st, 2015.

      For those with over 500 employees it is now $1.68 higher than it was two days ago.

      I’d say they are still pretty low.

      And I assure you that there are many “rational” people in the restaurant industry, as well as yours.

  8. I will continue to tip my customary 15-25% because I know from experience that servers do tough work and because I can afford it. It will be a shame if a beneficial change like raising the minimum wage to an inflation adjusted point where it was thirty years ago leads people to reduce tips for service employees. The job they do should place them in the middle class, and I hope this change makes that more likely than not.

    I have noticed a trend whereby members of the lower/middle class tend to eviserate their peers who obtain or retain some wage or benefit that they themselves may not enjoy. Examples abound, Boeing workers resented for their good wages, public employees and teachers resented for their benefits and job security, and now minumum wage recipients for their paternalistic mandated wage increase. Why not spend more productive time trying to figure ways to obtain similar benefits for wider groups? My hats off to the powers that be who have done such a great job shrinking the economic pie, leaving many among us fighting amongst ourselves for the smaller and smaller pieces,

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  15. I have been a lifer in the restaurant biz and have done everything from dishwashing to owning. This min wage rise will result in getting really shitty service. Most servers will be taking a huge pay cut. Also all of us who make more than $15/hr will be getting less disposable income because cost of living (everything) will go up. A capitalist economy (we live in one) is based on supply vs demand. that goes for wage too. If your good at something (and it is a skill) you get paid what your worth. If it is something anyone can do, then you get paid less.

    All of us- including you PRO WAGE hike peep’s just got a disposable cash pay cut.

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