Seattle’s minimum wage ordinance goes into effect on April 1, 2015

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Minimum Wage

The Seattle Office of Labor Standards (SOLS), a division of the Seattle Office for Civil Rights, released proposed administrative rules last month to implement the city’s $15 minimum wage.

Seattle’s minimum wage ordinance goes into effect on April 1, 2015. On that date, all employers, regardless of size, must pay employees working in Seattle $11 per hour. Employers with 501 or more employees must pay a “minimum wage” of $11 per hour, while employers with 500 or fewer employees must pay a “minimum compensation” rate of $11 per hour.

Number of employees irrelevant

The number of employees is not location-specific; this means that even employees who work outside Seattle count. Employees are covered if they work in Seattle for more than two hours in two consecutive weeks. Covered employees must be paid the minimum wage or minimum compensation rate for all hours worked in Seattle during the two-week period.

Employers have the discretion to determine how the two-week period will run (e.g., by pay period or calendar period), but the method must be applied consistently. If employers meet the ordinance’s notice requirements and provide employees a reasonable system for tracking time, they may delegate the responsibility for tracking time worked in Seattle to employees.

Differences between “minimum wage” vs. “minimum compensation”

The definition of “minimum wage” includes wages, commissions, piece-rate pay, and bonuses received by employees. On the other hand, “minimum compensation” includes wages, tips, and money paid by an employer toward employees’ medical benefits. Thus, small employers are able to count tips and medical benefit payments to help them reach the $11 minimum compensation rate. The minimum wage and minimum compensation requirements will increase over time and on different schedules based on employer size and contributions toward employee medical benefits until the $15 minimum wage takes effect on January 1, 2018, for large employers and January 1, 2021, for small employers.

Must maintain proper payroll records

The proposed rules require employers to retain covered employees’ payroll records for three years. Payroll records include, among other things, (1) the time of day and the day of the week on which an employee’s workweek begins, (2) hours worked each workday, (3) hours worked’ each workweek, and (4) information regarding medical benefits and tips that demonstrates that an employee was paid the minimum wage or minimum compensation rate.

The ordinance requires employers to notify employees of their rights under the law, including (1) the right to be paid minimum wage or minimum compensation, (2) protection from retaliation, and (3) the right to file a complaint for violations. Notice must be given in English, Spanish, and “any-other language commonly spoken by employees at [a] particular workplace.”

Implementing Seattle’s minimum wage

Here are some tips to help you comply with Seattle’s minimum wage ordinance:

  • Review the ordinance and the administrative rules to ensure compliance.
  • Determine your total number of employees, including joint employees and employees who work outside Seattle.
  • Notify employees of their rights under the ordinance in English, Spanish, and any other applicable language.

Make sure you have evidence that you provided notice.

  • If you have employees who work in Seattle periodically, notify them of their rights under the ordinance, and develop a reasonable system for tracking each employee’s time worked in Seattle.
  • Review your payroll and record-keeping procedures to ensure compliance with the ordinance and its regulations.
  • Consider consulting legal counsel to ensure compliance with the ordinance.

The ordinance takes effect on April 1!

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