Minimum wage earners in Seattle are getting another raise to kick off the new year. Starting in January, minimum wage workers at companies with more than 500 employees, which includes most fast food workers, will get a an 18% bump in pay from $11 to $13 an hour. Small business employees will have a $12 guaranteed minimum, an increase of $1, and those that are tipped will get a $.50 base-pay raise bringing their minimum hourly wage to $10.50.
2016’s scheduled increase is a big ramp up for Seattle’s phased-in $15 an hour ordinance, which was passed in 2014. The law went into effect this April, bringing all minimum wages to $11 an hour except for tipped workers, who went to $10 an hour.
Business owners on Capitol Hill have taken various strategies towards meeting the new requirements. Some businesses, like Molly Moon’s Ice Cream, had already brought workers to $15 an hour even though they likely wouldn’t be required to do so until 2021. While there’s been little evidence that the new minimum wage has effected business openings or closings, some Capitol Hill business owners told CHS they would have to continue to make changes to roll with the scheduled increases.
At 15th Ave’s Coastal Kitchen, menu prices will rise around 4% due to next year’s increase, according to owner Jeremy Hardy. He said the restaurant has made other changes to soften the blow to customers, changes that would continue as the ramp-up to $15 moves ahead.
“We have re-engineered our scheduling in the back of house (kitchen-typically the most difficult area to adjust as this is the power plant) as well as the front of house,” he said. “The real increases start in the following years when the increases will require a more potent elixir of adjustments to be determined.”
Retrofit Home owner Jon Milazzo said the starting wage for her employees has been $12 an hour for years, so the new minimum wouldn’t have any immediate effects. However, Retrofit will make hiring changes as scheduled increases continue past 2016.
“We wont offer part time jobs for students or entry level into our industry, you will only be able to work here coming in with a complete skill set. So that sucks all around,” she said.
Seattle’s Office of Labor Standards sent notifications to every licensed business in the city reminding them of the change. Business owners can also access the new minimum wage poster here.
“We will continue to educate both the business and worker communities about the minimum wage increase throughout the month, and after it takes effect on January 1,” said OLS director Dylan Orr. “OLS will also continue to offer businesses technical assistance on how the law applies to their businesses.”
OLS was created as part of the minimum wage law to help enforce Seattle’s labor ordinances, which also includes paid sick leave. Currently, OLS has 108 open investigations into 78 employers on allegations of wage theft, including seven separate investigations into allegations that employers retaliated against workers asserting their rights under the ordinance. The OLS violations dashboard hasn’t been updated since July (CHS got the most recent numbers from the office directly), but Orr said it would be updated soon.
“In short, we are busy,” he said.
The office closed its first investigation in August against Homegrown sandwich shop, which has several locations in the city including one inside Capitol Hill’s Melrose Market. According to Homegrown co-owner Ben Friedman, the investigation was opened in May after Homegrown was found to be miscalculating their tip credit at all their Seattle locations. Friedman said workers were immediately given back pay plus interest.
Meanwhile, a report from labor group Restaurant Opportunities Center showed wage theft, paid sick law violations are commonplace for Seattle restaurant workers.
The next few weeks are the most crucial of the year for many independent retailers including Elliot Bay Books, and manager Tracy Taylor said sales are looking strong enough to cover next year’s wage increase.
“The real question is going to be long term over the next few years, but no one knows the answer,” Taylor said. “Yesterday, I spent an hour on the phone with three bookstore owners from San Francisco and St. Louis discussing the minimum wage issues in their cities. It was fascinating to hear what they’ve done and where they are.”
Taylor said she also wished City Hall had done more to promote the importance of keeping local dollars local since the minimum wage increase only affects Seattle.
The wage bump will have no direct effect on Central Seattle’s fastest growing segment of businesses: independent contractors for rideshare services. Last week, CHS reported that 9% of all new business licenses in Seattle were for a category largely made up of drivers who work for services like Uber and Lyft.
Since drivers work as independent contractors, they are responsible for their own wages despite the fact that many drivers, including some interviewed by CHS, rely on driving as their primary source of income. The situation has sparked a closely watched movement in Seattle to allow so-called “transportation network company” drivers to collectively bargain with the owners of the app-based companies.
Some Capitol Hill businesses are also preparing for the changing wage structure by leaping ahead with service charges and eliminating tipping. Renee Erickson told CHS she has been busy meeting with other restaurant owners interested in how she has transitioned all of her venues including the newly opened Bar Melusine, Bateau, and General Porpoise to the no-tip, service charge future. Jerry Traunfeld has taken a similar tack at Lionhead. Meanwhile, newly opened Optimism Brewing is another example that has taken a different path to changing the way food and drink business is done with a fully cashless operation and no tips.
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.