Seattle passes $15 minimum wage; franchisees sue

June 3, 2014

Seattle’s City Council unanimously approved a minimum wage increase Monday, to $15 an hour. Mayor Ed Murray is expected to sign its passage today, which would give Seattle the highest minimum wage in the U.S.

The pay scale will be implemented throughout several years, with specific timeframes to be determined based on business size.

According to CNN, the first increase will come April 1, 2015, bringing the wage to $10 for some and $11 for others.

Washington already has the highest minimum wage in the U.S., at $9.32. The federal wage is $7.25. President Obama has called for a minimum wage of $10.10.

As expected, restaurant industry workers called Monday’s news a “major victory” in their nearly-two-year quest to get the federal limit up to $15 through growing strikes and protests.

"Fast-food workers have been paving the way for a better future for workers across Seattle — and are sending a strong message to cities across the country," Seattle Domino’s employee Crystal Thompson said in a news release. "When I see $15, I'll be able to afford my own place in a safe neighborhood where my kids can ride their bikes, and I'll finally be able to go back to school."

Labor union group SEIU also applauded Seattle’s move, calling it “historic” and predicting its positive effect on more than 100,000 workers. David Rolf, president of SEIU 775, vice president of SEIU, and co-chair of Mayor Ed Murray’s Income Inequality Advisory Committee, issued a statement that read in part:

“One year ago, fast food workers in Seattle went on strike for $15/hour and the right to organize. They were joined by retail workers, hotel workers, health care workers, janitors, and many others … Now, we stand on the precipice of the most important win for workers this century. There is a new dawn rising from the upper left hand corner of America that will bring hope, relief and prosperity to the entire nation.

“Today we celebrate the courage of fast food workers and others who took to the streets of Seattle and demanded dignity and fair wages for their hard work …

“More than 100,000 workers’ lives will be transformed by the historic City Council ordinance. And the entire Pacific Northwest will prosper as a result of the expected $3 billion that will be pumped into the Seattle economy. Workers in Seattle today have demonstrated to doubters nationwide that middle-out economics benefits all.”

IFA files lawsuit

Not everyone, however, is popping the champagne. The International Franchise Association said it plans to file a lawsuit to overturn Seattle’s plan, calling it “unfair and discriminatory.”

IFA CEO Steve Caldeira said the plan would force the 600 franchisees in Seattle, which own 1,700 locations and employ 19,000 workers, to adopt the full $15 wage in three years, while other small businesses have seven years to do the same.

“These hundreds of franchise small business owners are being punished simply because they chose to operate as franchisees. Decades of legal precedent have held that franchise businesses are independently-owned businesses and are not operated by the brand’s corporate headquarters," he said. “The City Council’s action today is unfair, discriminatory and a deliberate attempt to achieve a political agenda at the expense of small franchise business owners. By picking winners and losers among Seattle businesses, this policy flies in the face of all legal precedent and defies common sense.”

Topics: Franchising & Growth, Operations Management, Staffing & Training, Workforce Management

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