Seattle Increases Minimum Wage to $15.00 Per Hour Over Several Years

by Littler

Seattle, Washington has enacted groundbreaking legislation that, over several years, will phase in a $15.00 per hour minimum wage, the nation’s highest for private employers who do not contract with governmental entities.1  Although a handful of states have recently enacted incremental increases in the minimum wage,2 Seattle’s new ordinance, passed unanimously by its nine member City Council and signed by Seattle Mayor Ed Murray on June 3, takes the concept much further and could signal a national trend leading to similar increases being considered by other large cities.  According to City projections, Seattle’s new minimum wage will be nearly double Washington State’s current minimum wage of $9.32 per hour by 2025, due to built-in inflation adjustments.

When will this change first take effect?

The first changes will take effect on April 1, 2015, followed by a phase-in over a period of years as discussed below.

Which employees are covered by the new minimum wage?

In general, all employees in Seattle are covered for each hour worked within the geographic boundaries of Seattle.  An employee who performs work in Seattle on an occasional basis is covered in a two-week period if the employee performs more than two hours of work within Seattle during that period.  Time spent in Seattle solely for the purpose of traveling through Seattle, with no employment-related or commercial stops in Seattle except for refueling or meals, is not covered.3

Are any employees excluded?

Individuals who are exempted from coverage under the Washington Minimum Wage Act are not covered under the Seattle ordinance.  This includes, for example, individuals employed in a bona fide executive, administrative, professional, or outside sales capacity.4  In addition, individuals performing services under a work study agreement are not covered.5  The Director of the Department of Finance and Administrative Services (“the Department”) may issue special certificates authorizing a lower minimum wage for learners, apprentices, certain messengers, and certain disabled individuals.6  The Director will also establish a lower minimum wage for employees under eighteen years old.7

Which employers must comply with the ordinance?

All employers are covered with respect to employees who work in Seattle.  The ordinance divides employers into two categories based generally on the number of employees they employ: Schedule 1 Employers and Schedule 2 Employers.  Higher minimum wage rates become effective more quickly for Schedule 1 Employers than for Schedule 2 Employers.

How does an employer determine if it is a Schedule 1 or Schedule 2 Employer?

In most cases, Schedule 1 Employers employ more than 500 employees in the United States, regardless of where those employees are employed.8  Schedule 2 Employers employ 500 employees or less anywhere in the United States.9

An employer’s Schedule status is calculated based on the average number of employees employed per calendar week during the previous calendar year for all weeks during which at least one employee worked.  If an employer did not have any employees during the previous calendar year, the schedule will be calculated based on the average number of employees employed per calendar week during the first 90 calendar days of the current year in which the employer engaged in business.10

Separate entities that form an integrated enterprise are considered a single employer if one entity controls the operation of another entity.  Even if separate legal entities share some degree of interrelated operations and common management, the ordinance presumes they are separate as long as (1) they operate substantially in separate physical locations, and (2) each entity has partially different ultimate ownership.  This provision, however, does not benefit franchises.11

How are franchisees treated under the ordinance?

Any franchisee associated with a franchisor or network of franchises with franchisees that employ more than 500 employees in aggregate in the United States is considered a Schedule 1 Employer.12  In other words, even if a franchisee employs only one employee, that franchisee is considered a Schedule 1 Employer if it is associated with a franchisor or network of franchises with franchisees that employ more than 500 employees in total in the United States.

What are the new minimum wage rates?

The Seattle minimum wage is initially $11.00 per hour, effective April 1, 2015, followed by incremental increases according to the timelines set forth below.  Schedule 1 Employers have two and a half years to reach a minimum wage of $15.00.  Those that provide qualifying medical benefits will have an additional year. Schedule 2 Employers have four and a half years to reach $15.00 per hour.  Those that can claim a sufficient credit for tips and/or qualifying employer-paid medical benefits have an additional two years, and also benefit from a lower initial effective minimum wage rate of $10.00 per hour.

Schedule 1 Employers (More than 500 Employees)13


Pay the Lesser Of:


Hourly Minimum Wage (including commissions, piece-rate, and non—discretionary bonuses)

Hourly Minimum Wage if Employer Pays Toward Employee’s Qualifying Medical Benefits Plan

April 1, 2015



January 1, 2016



January 1, 2017



January 1, 2018

Increased to reflect rate of inflation


January 1, 2019 (and each year thereafter)

Increased to reflect rate of inflation

No longer in effect.


Schedule 2 Employers (500 Employees or Less)14


Satisfy Both:


Hourly Minimum Wage (presumably including commissions, piece-rate, and non-discretionary bonuses)

Hourly Minimum Compensation (wages plus tips and money paid toward employee’s qualifying medical benefits plan)

April 1, 2015



January 1, 2016



January 1, 2017



January 1, 2018



January 1, 2019



January 1, 2020


$15.75 (or equivalent to Schedule 1, if lower)

January 1, 2021


Equivalent to Schedule 1 minimum wage

January 1, 2022

$15.75 (or equivalent to Schedule 1, if lower)

Equivalent to Schedule 1 minimum wage

January 1, 2023

$16.50 (or equivalent to Schedule 1, if lower)

Equivalent to Schedule 1 minimum wage

January 1, 2024

$17.25 (or equivalent to Schedule 1, if lower)

Equivalent to Schedule 1 minimum wage

January 1, 2025 (and each year thereafter)

Equivalent to Schedule 1 minimum wage

No longer in effect.

What are the notice requirements?

Employers must post notice of the ordinance for employees in English, Spanish, and any other language commonly spoken in the workplace.  The Department will provide an annual notice for this purpose.  An employer who willfully violates this requirement will be subject to a civil penalty of up to $125 for the first violation and up to $250 for subsequent violations.15  The ordinance does not specify a deadline for the initial posting of this notice, but a posting in advance of the April 1, 2015 effective date of the minimum wage obligation likely will be considered sufficient.  The Department has not yet issued the form of this notice.

How will Seattle enforce the new minimum wage?

Employees and the Director may file with the Department charges alleging a violation of Seattle’s minimum wage within three years of the alleged violation.  The Department will investigate alleged violations of the ordinance.  The Director will have authority to issue subpoenas requiring the testimony of witnesses and the production of evidence.  If the Department finds a violation, the appropriate remedy will include full payment of unpaid wages and accrued interest and may include a civil penalty of up to $500 for a first violation, with the maximum amount of the civil penalty increasing for subsequent violations up to $20,000 per employee, depending on the number of violations.  The ordinance provides for an appeal procedure through a contested hearing and prohibits retaliation against employees who exercise their rights under the ordinance.16

Are efforts underway to repeal or challenge the ordinance?

On June 4, 2014, Tim Eyman filed a statewide ballot initiative seeking to retroactively prohibit cities in Washington State from imposing a minimum wage greater than the State minimum wage.  Mr. Eyman has sponsored many successful state initiatives in the past, most of them limiting taxes.  An initiative similar to Mr. Eyman's, but promoted by a Seattle small business group, was previously filed on May 15, 2014.

The International Franchise Association has stated it plans to sue Seattle because the ordinance counts local franchise owners, regardless of the number of employees, as large employers due to their ties to national or global chains.  Thus, these small franchisees only have three years to increase wages to $15 per hour, while non-franchise competitors have up to seven years.  This affects approximately 600 franchisees at 1,700 establishments in Seattle.


While legal challenges to the ordinance are anticipated and, if filed, will be decided in the courts, employers with any employees in Seattle should consult with legal counsel about complying with the ordinance prior to the initial minimum wage increase which is effective April 1, 2015.

1 Foreshadowing the Seattle ordinance, the City of SeaTac, Washington recently enacted a $15.00 per hour minimum wage for certain hospitality and airport workers.  See Pamela Salgado and Kellie Tabor, $15.00 Minimum Wage and Mandatory Paid Sick and Safe Leave for Transportation and Hospitality Workers Take Effect in City of SeaTac , Littler ASAP (Jan. 10, 2014). 

2 See, e.g.,

3 City of Seattle, Wash., Seattle Municipal Code § 14.19.020(A).

4 Id. at §§ 12A.28.200; 14.19.010(G).

5 Id. at § 14.19.010(G).

6 Id. at § 14.19.020(C); RCW 49.46.060.

7 City of Seattle, Wash., Seattle Municipal Code § 14.19.020(D).

8 Id. at § 14.19.010(T).

9 Id. at § 14.19.010(U).

10 Id. at § 14.19.020(B).

11 Id. at § 14.19.020(B).

12 Id. at § 14.19.010(T), (U).

13 Id. at § 14.19.030(A), (B).

14 Id. at §§ 14.19.040, 14.19.050.

15 Id. at §§ 14.19.060(C), (F)(1).

16 Id. at § 14.19.060.

Written by:


Littler on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.