Ivar’s president is confident early $15 minimum wage rollout will work

The first phase of Seattle’s new minimum wage law starts April 1 with big businesses required to pay their employees $11 an hour.

But Bob Donegan, president and CEO of Ivar’s, is starting $15 an hour early. He told KIRO Radio’s Jason Rantz, there are some people who are questioning whether this will work. Donegan said he’s hearing that his workers are happy that they’re keeping their benefits and that the raise extends to the back of the house.

“Even if we chose the three or four-year phase-in path that the city allows, that would require us to go to $11 on April 1, $13 on January 1, 2016, $15 on January 1, 2017,” he said. “We saw this as an opportunity to make a jump in one big move.”

Donegan said they have found there’s a discrepancy in the people who talk to guests compared to people who cook and wash dishes.

“We said let’s make a big leap, let’s get everyone paid on a more similar scale and let’s find out if we can do this once, rather than three times.”

Employees at what Donegan called the “quick service” locations in Bellevue, Bellis Fair, etc. will be on the city’s schedule. They will be paid at least $11 an hour on April 1 even if they’re not in Seattle.

A typical server or bartender made about $60,000 in 2014, according to Donegan. He said with tips, they’re making about $30 an hour.

“Every one of those bartenders and servers is going to get a $6,000 annual raise. Our goal is we want to keep those people whole because they’re the ones who talk to our customers every day. We know if the servers and bartenders are happy, we’re going to have happy customers.”

Ivar’s will do away with tips and Donegan said there will be information in the menus explaining the reason to diners.

Since word got out about the new minimum wage, Donegan said the most common question is regarding tips. He said customers are worried they won’t be able to show their servers gratitude. He told Rantz the bill won’t have a tip line, but customers can write a note or leave cash on the table.

Donegan said Ivar’s has been paying its employees, minus the servers, more than minimum wage because they find they can get a better quality worker. He said employees are also eligible for benefits and a matching 401k program. Meals will also be free for employees.

“We want all of our employees to be at the same level or higher than they were the last couple of years,” Donegan said.

Customers will see a four percent increase from last year’s prices.

Donegan is confident his plan will work for Ivar’s, but he’s worried whether it will work for other restaurants.

So what keeps Donegan up at night?

“I worry about a city government that doesn’t always coordinate well what it needs to do to manage things. An example: When the mayor’s Income Equality Advisory Committee concluded last year, we agreed that the rules governing the $15 law would be completed by Jan. 31. Do you know when we got the rules? 1:50 p.m. on March 30. They go into effect in two days.”

He doesn’t know what the delay was about, but it’s things like that that worry him. He’s not confident a mom and pop restaurant will be able to quickly adapt.