Clock is ticking for Seattle businesses to bump up minimum wage

Seattle business owners have some major decisions to make before April.

The $15 minimum wage ordinance goes into effect April 1. Though small businesses have options for how they can pay higher wages, questions remain.

Business owners want to find out what is expected of them before the ordinance goes into effect because they are “eager to comply,” said Karina Bull, senior policy analyst for the Seattle Office for Civil Rights.

Related: Businesses seek to block portion of Seattle minimum wage law

“The primary concern is: what does it all mean?” she said.

A higher minimum wage will be phased in over a period of time. The law gives businesses with more than 500 employees nationally at least three years to phase in the increase. If health insurance is provided, they have four years.

Smaller business owners – 500 or less employees – will have seven years to phase in the higher minimum wage. There are phase-in options for owners to choose from, which is what some owners seem to be struggling with.

The ordinance is also the focus of a lawsuit that goes to US District Court Tuesday. The International Franchise Association is suing, saying the ordinance is discriminatory because it requires franchise owners to raise their minimum wage as quickly as big business. There are approximately 600 franchisees in Seattle who together own 1,700 franchise locations and employ 19,000 workers.

The bulk of employers is made up of small businesses, even though most people work for larger companies, Bull said.

“Small business owners are aware that the structure gives them options on how to reach the minimum wage and minimum compensation rate,” said Bull. They are “trying to figure out what, for their business, makes the most sense.”

The question for small businesses is: do they take advantage of phase-in options, or pay employees higher wages right out of the gate?

An independent cafe, for example, might feel the need to pay higher wages to compete with other employers, Bull said.

Business owners will be allowed to pay lower wages if they also pay for medical benefits. Some owners feel uncomfortable giving full-time employees $10 an hour with medical benefits, while part-time employees are making $11 without those benefits, Bull said.

“Some employers find that inequitable,” she said.

Washington’s minimum wage is $9.32 an hour, the highest wage of any state. The federal minimum wage is $7.25 an hour.

Though businesses are still figuring out how to deal with the higher wages, Bull believes it will be a benefit to the local economy.

“Overall, the higher wages will lead to more money pumped into the economy and increased spending power of the people in Seattle,” she said.

Bull said a higher minimum wage will lead to less employee turnover, increased moral and tenure and better job satisfaction. And, “certainly helping people get a livable wage.”