Seattle’s Minimum Wage: Impact, Side Effects and Looking Forward

seattleIn April 2015, Seattle raised its minimum wage to $10.00 or $11.00 an hour, depending on the size of your business and other factors. The city also phased in a plan to increase its minimum wage further in the years ahead.

On January 1, 2017, the next step in that plan takes effect. Seattle’s minimum wage will rise to $15.00 this coming year for business with 500 or more employees and certain other organizations. By 2021, all employers will be expected to pay their workers a minimum of $15.00 an hour.

What does this mean for your business? We break down some of the biggest impacts and predictions for the coming years:

  1. Minimum wages go up for everyone, not just large employers. As of January 1, 2017, employers with over 500 employees will be expected to compensate their employees at $15.00 per hour or more. But if you’re a smaller company, your minimum wage expectations go up too: you’ll be expected to pay at least $13.00 per hour, up from $12.00 per hour the previous year.
  2. “Minimum compensation” versus “minimum wage” still applies. As in the previous year, small employers can reach the $13.00 per hour minimum threshold either by paying that entire amount in wages, or by paying a minimum wage plus reported tips or medical benefits. The minimum amount that must be paid in wages is $11.00 per hour. This gives smaller employers the flexibility to include tips and medical benefits as a way to control payroll costs.
  3. By 2025, all employers will be on the same playing field. Get ready. By 2025, all Seattle employers will be expected to pay the same minimum wage rate, and no employer will be allowed to count tips or medical payments toward that compensation amount.
  4. You’re still allowed to control staffing costs in other ways. Distributing workloads more efficiently, promoting from within and working with temporary or contract talent are all excellent ways to get the work done while controlling staffing costs. Your staffing partner can help you maximize your gains from these strategies.

For many employers, navigating employment law changes can feel like navigating a minefield at times. If you are looking for HR and staffing guidance, contact Seattle’s top recruiting firm, TERRA Staffing Group.

At TERRA, our recruiters can help you find the talent you need when you need it, while still keeping your staffing costs under control.

Contact us today to learn more about our staffing services in the Pacific Northwest and Phoenix.

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