Late yesterday, the Office of Labor Standards released the required increases to Seattle’s minimum wage. This included moving Schedule 2 employers (those with 500 or fewer employees, or small businesses) to the same minimum wage compensation as Schedule 1 employers (those with more than 500 employees, or large businesses) – meaning that Schedule 2 employers will see a $3.51 per hour, per employee increase in compensation paid to employees (tipped and not tipped).

This change was included in city of Seattle legislation passed 10 years ago, the 2014 minimum wage law. At that time, the calculation estimated a .45 cent difference between Schedule 2 (small) and Schedule 1 (large) employers by 2024, but the underlying legislation ties to CPI, and because of unexpected inflation increases in 2021 and 2022, that differential is now $3.51. For the owner of an average 2023 Washington State restaurant with sales of $1.1 million, that will be a $68,100 increase to operating costs.

Over the course of the last few months, there have been many conversations with city leaders – including legislation that was introduced that would allow for more time for small businesses to meet the new standard. Those did not result in legislation passing or a different approach being embraced.

We know that while, as a business operator, you stay up on the changing laws and regulations that impact your business, the significance of this change may still come as a surprise. We know that for many employers, this change could undercut your ability to continue to operate your business in the slower months that are nearly upon us. And we know that, as business leaders who share the values of this community, you believe in, and provide good benefits and wages; many of your tipped employees make far more than minimum wage, and many of you were able to provide health care to part-time employees due to the total compensation component of the 2014 minimum wage law.

We are disappointed that city leaders have not recognized the significant change in circumstances since 2014 and are not taking action to address this issue.

Moving forward, there are three things we will do for you, and with you:

  • Meet, convene, and have forums where we can talk about the challenges, brainstorm ideas to address them, and get those in front of policymakers.
  • Develop a small business resiliency action agenda to advocate for relief and support from local, regional, and state leaders. We look forward to Mayor Harrell’s proposals to address the pressures small businesses are facing.
  • Support each other on this highly charged political topic; doxing small business owners to make a political point does not align with our community values and harms our economy. It should be condemned, always.

If you would like to talk more about this issue, please email Lars Erickson, Senior Vice President of Public Affairs and Communications.