Seattle Minimum Wage Guide: Crash Course

Seattle Minimum Wage Guide: Crash Course

Feeling a little overwhelmed?  We thought we’d finish off our “Minimum Wage Survival Guide” series with a bare-bones guide of all the most important points we’ve covered so far.  This edition is intended to get you started in the right direction on any of the topics below.  This guide and all of the affiliated materials is intended as just that – a guide – and should not be considered as a substitute for contacting SOCR or consulting a wage lawyer.

Schedule 1 or Schedule 2

The designations “Schedule 1” and “Schedule 2” are assigned to you depending on the size of your business, which is determined by how many people you employ.  If you employ over 500 people, you’re schedule 1.  If you employ 500 people or less, you’re schedule 2.

For most businesses this is pretty straightforward, but for franchisees this can get a little tricky since you must include all employees who work for other franchisees of the franchisor. You’ll also want to check and see if you’re impacted by the “joint employer” rule.  To get specifics, review our post on this topic and look at pages 2-5 in our

Feeling a little overwhelmed?  We thought we’d finish off our “Minimum Wage Survival Guide” series with a bare-bones guide of all the most important points we’ve covered so far.  This edition is intended to get you started in the right direction on any of the topics below.  This guide and all of the affiliated materials is intended as just that – a guide – and should not be considered as a substitute for contacting SOCR or consulting a wage lawyer.

Schedule 1 or Schedule 2

The designations “Schedule 1” and “Schedule 2” are assigned to you depending on the size of your business, which is determined by how many people you employ.  If you employ over 500 people, you’re schedule 1.  If you employ 500 people or less, you’re schedule 2.

For most businesses this is pretty straightforward, but for franchisees this can get a little tricky since you must include all employees who work for other franchisees of the franchisor. You’ll also want to check and see if you’re impacted by the “joint employer” rule.  To get specifics, review our post on this topic and look at pages 2-5 in our Minimum Wage Guide (MWG).

Wage Increase Schedule

The wage you’re expected to pay, and the rate at which it increases, depends on whether you’re a Schedule 1 or 2 employer.  Schedule 1 employers can view their schedule here.  Schedule two employees can view their schedule here.

Tips

Schedule 1 employers are NOT allowed to apply tips towards their minimum wage obligations.  Small employers (Schedule 2) ARE allowed to use tips towards meeting the difference between minimum wage and minimum compensation.  What’s the difference?  Read our post here, or check out page 16 of the MWG.

Tips are tricky, so read through some of our other resources to make sure you’re in compliance: Page 21 of the MWG, Edition 1, and Edition 5.

Service Charges

Both Schedule 1 and Schedule 2 employers can factor service charges into wages, applying them towards paying the difference between the state minimum wage and the city’s ordinance requirements. Service charges can meet the definition of a “commission” or a “bonus”, which is what allows for them to be counted towards wage requirements.

The rules and definitions regarding service charges are complicated, so make sure you read further into this topic.  Consult our original post on service charges and page 29 of the MWG.

Health Care

To factor medical benefits into an employee’s wages, the plan must be “a silver or higher level essential health benefits package, as defined in [the Affordable Care Act], or an equivalent plan that is designed to provide benefits that are actuarially equivalent to 70 percent of the full actuarial value of the benefits provided under the plan, whichever is greater.”  For more detailed information about considering health care as compensation read our original post here and consult page 11 (schedule 1) or page 18 (schedule 2) of our MWG.

Schedule 1 (large) and Schedule 2 (small) employers have different annual schedules for health insurance credits. For a chart outlining the annual schedule of the health insurance credit for Schedule 1 employers, and when it expires, see Exhibit 4.  Schedule 2 employers, see Exhibit 5.

Posting Requirements

You are required to give notice to your employees in English, Spanish and any other language commonly spoken by employees at the particular workplace.  The notice must include that: (a) Employees are entitled to minimum wage and/or minimum compensation; (b) Retaliation is illegal; and (c) Employees have the right to file a complaint with the Office of Labor Standards if their employer does not pay them minimum wage and/or minimum compensation or if they employees are retaliated against for exercising their rights under the ordinance.

There is a poster that the city has made available to meet their requirements that you can find here (EnglishSpanishAmharic).  If you have any questions, read our original post here, or check page 9 of the MWG.

Resources
  • All of our posts, charts, sample poster/letters, and guides are available here.
  • Seattle.gov’s minimum wage FAQ.
  • Our Minimum Wage Ordinance Guide, which represents our full interpretation of the ordinance.
  • The WRA is here to be your resource too. You can call us anytime: (360) 956-7279.
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