Seattle Minimum Wage: You might be a larger employer than you think
The Washington Lodging Association and Washington Restaurant Association commissioned a legal analysis of Seattle’s Minimum Wage Ordinance to help their members understand and comply with the complex new law. The result is the Seattle Minimum Wage Ordinance Guide (MWG), which gives an overview of all aspects of the wage law. This article is part of a series that looks at various aspects of the law.
If you are a franchisee in Seattle, chances are high that you’re considered a large employer and face a faster schedule for reaching the $15 minimum wage than small employers. Businesses that employee temps or contractors, as well as owners of multiple businesses, also may be considered large employers given the complicated way the city counts employees.
Under the new law, Seattle considers all the employees who work for franchises under your franchisor toward your employee count, not just those who work for you. If your franchisor has franchises that together have more than 500 employees nationwide, your business is considered a large or “Schedule 1” employer. As such, you have to follow the large employer schedule to reach the $15 minimum wage.
Even if you are not part of a traditional franchise, there are other ways you might be considered a large employer. If you own separate business entities considered by the city to be an “integrated enterprise,” then the employees of these entities will all count toward the 501-worker threshold.
The Minimum Wage Guide commissioned by WLA and WRA can help you determine if you have “integrated enterprises.” As the guide points out, even if businesses have separate names, looks or “feels,” they may be counted as one employer if they:
- Share common management
- Have centralized control of labor relations
- Have some common ownership or financial control
The Washington Lodging Association and Washington Restaurant Association commissioned a legal analysis of Seattle’s Minimum Wage Ordinance to help their members understand and comply with the complex new law. The result is the Seattle Minimum Wage Ordinance Guide (MWG), which gives an overview of all aspects of the wage law. This article is part of a series that looks at various aspects of the law.
If you are a franchisee in Seattle, chances are high that you’re considered a large employer and face a faster schedule for reaching the $15 minimum wage than small employers. Businesses that employee temps or contractors, as well as owners of multiple businesses, also may be considered large employers given the complicated way the city counts employees.
Under the new law, Seattle considers all the employees who work for franchises under your franchisor toward your employee count, not just those who work for you. If your franchisor has franchises that together have more than 500 employees nationwide, your business is considered a large or “Schedule 1” employer. As such, you have to follow the large employer schedule to reach the $15 minimum wage.
Even if you are not part of a traditional franchise, there are other ways you might be considered a large employer. If you own separate business entities considered by the city to be an “integrated enterprise,” then the employees of these entities will all count toward the 501-worker threshold.
The Minimum Wage Guide commissioned by WLA and WRA can help you determine if you have “integrated enterprises.” As the guide points out, even if businesses have separate names, looks or “feels,” they may be counted as one employer if they:
“Joint employment” is another gray area that can trigger the faster increase schedule. You might be considered a joint employer if you have temporary workers through a staffing agency or your business contracts with a landscaping and gardening service. The factors that determine whether or not you must consider these workers in your employee count include 1) the degree of direct or indirect supervision; 2) the power to determine pay rates; 3) the right to (directly and indirectly) hire, fire, or modify employment conditions; and the 4) the preparation of payroll and the payment of wages.
Given the complexity of this classification, if you have the possibility of being a joint employer or having an “integrated enterprise,” you may want to contact the Seattle Office of Civil Rights to ensure that you are following the law. For more detailed information, you should contact a wage and labor lawyer. Please refer to our vendor partners to find attorneys specializing in hospitality or call our office to connect with advisory network now available through our partnership with the WRA.
Additional Articles:
Additional Resources
WLA/WRA Guide to Seattle’s Minimum Wage
Seattle Minimum Wage Ordinance
Fact Sheet for Large Employers (501 or more employees)
Fact Sheet for Small Employers (500 or fewer employees)
City of Seattle Minimum Wage and Wage Theft Workplace Poster