The Seattle Times
By David Kroman
July 26, 2024 at 4:17 pm
The Seattle City Council will soon begin discussing legislation that would scale back next year’s planned minimum wage hike for workers in Seattle’s small businesses and rewrite the 10-year phase-in plan negotiated a decade ago.
The proposed bill from Councilmember Joy Hollingsworth comes in response to alarm from restaurants over an upcoming increase next year of more than $3 an hour for many businesses and will likely anger labor advocates who say there was more than enough time to plan for the jump.
The bill, transmitted Friday afternoon, would maintain Seattle’s current, two-tiered system: One for businesses with more than 500 employees, another for those with fewer.
Seattle law states that any business with fewer than 500 employees can partially credit tips and benefits toward the minimum wage. In practice, that means most small businesses are currently bound to a $17.25 an hour minimum wage, while larger businesses are required to pay $19.97.
Under the 2015 law, which was negotiated by business and labor leaders over many weeks, that credit for tips and benefits is set to expire next year, making the city’s minimum wage the same for all businesses regardless of size. The proposed legislation strikes that expiration date, making the credit permanent and enshrining the differing wages.
The annual increase under the new bill would be a certain percentage based on inflation, meaning small businesses would see less of an increase each year than large businesses because their base wage is smaller.
Lobbyists for local restaurant and hospitality groups have been pushing for an extension of the credit for several months, arguing to council members that the pandemic and inflation have hobbled restaurants and that a significant jump in the minimum wage could be a death blow to many.
Council members have generally expressed sympathy for the argument, though a protracted orientation for the supermajority of new members coupled with pressure to act on public safety priorities have meant their focus has been elsewhere.
More recently, Hollingsworth made clear she was interested in advancing legislation.
Labor has been muted on the issue up to this point, though some involved in the original negotiations — including Nick Hanauer, the wealthy backer of progressive initiatives — argued the city should not go back on its original deal. As housing in Seattle becomes increasingly more expensive, workers should receive the pay they were promised, he and others argue.
“Seattle restaurants have had a decade to plan for this,” Hanauer wrote on the social media platform X.
Some restaurants and industry groups, meanwhile, say a $3 increase would represent the most dramatic jump since the new minimum wage went into effect and could upend the industry in Seattle. Amy Fair Gunnar, co-owner of Portage Bay Cafe, said it would likely cost her an additional $50,000 a month in payroll.
The city’s decision to make the two-tiered system temporary “did not contemplate or account for such a pandemic nor such levels of inflation,” the bill reads. The hardship that could follow requires “immediate intervention” from policymakers.
One question mark is how many council members will be eligible to vote. Family of Councilmember Tanya Woo own Kau Kau BBQ and Council President Sara Nelson co-founded Fremont Brewing with her husband. Woo has already been asked by the city’s head of ethics to recuse herself from one restaurant-related legislation.
The bill will likely be introduced next week. The window for passing the legislation is narrow: Members are scheduled to go on recess at the end of August before turning to budget discussions this fall.
Read the original article here.
