On June 2, 2014, the Seattle City Council unanimously voted to increase the city minimum wage to $15 an hour over the next several years, more than twice the current federal minimum wage of $7.25. The ordinance will go into effect April 1, 2015, with employers being phased in over three to seven years based on their size and benefits provided to their employees. For example, employers with 500 or more employees that do not provide health insurance will be required to reach the minimum by 2017, while those businesses that do provide health insurance will have until 2018 to comply. Smaller businesses may not be required to meet the minimum until 2021. In the early stages of transition, employers will be allowed to include tips as part of compensation in reaching the minimum.
Seattle’s significant step forward is not a complete surprise as Washington State currently has the highest minimum wage rate in the country, set at $9.32. Eight states and the District of Columbia have increased their minimum wage in 2014 as well, but Seattle’s decision may push cities like San Diego and San Francisco that have been discussing minimum wages of $13 and $15, respectively, to take the leap.
New York State passed legislation in 2013 that would increase the minimum wage to $9.00 an hour by 2016. While this was a significant step in the right direction, hopefully the standard that a major city like Seattle has set, will bring similar progress in New York City, where the cost of living has become increasingly difficult to keep up with in recent years. The lawyers at Fitapelli & Schaffer ardently support efforts to address income inequality and the increase of the minimum wage.