August 24, 2024. The Magnolia Chamber is working in coalition with the Seattle Metro Chamber, neighborhood chambers including Fremont, Ballard, West Seattle, and others to ask the Seattle City Council to continue what is working for employers and employees alike and protect small businesses by eliminating the sunset of total compensation affecting small business, particularly local restaurants.
We have joined many other business advocates in signing the following letter to the Seattle City Council for their consideration.
Background. Since the 2020 pandemic, restaurants in Seattle have faced increased costs due to inflation and decreased flexibility. The Seattle City Council can act this year to support small businesses and a workforce with jobs and benefits.
Currently, small businesses may count $2.72 per hour in tips or medical benefits toward their wages based on the 2015 law requiring a $15 per hour minimum wage for workers. In addition, the law requires the minimum wage in Seattle to increase every year on January 1 and is based on the Consumer Price Index (CPI) for the Seattle Tacoma Bellevue area. Seattle’s minimum wage is now $19.97 per hour for large employers with 501 or more employees. Small employers, like most restaurants in neighborhoods like Magnolia, with 500 or fewer employees, can pay $17.25 per hour if they pay $2.72 per hour toward medical benefits or if the employee earns $2.72 per hour in tips. Otherwise, small employers must pay $19.97 per hour.
This system has worked as intended for a decade.
However, in 2025, all employers will pay the same minimum wage, regardless of size.
Without council action, the total compensation credit will sunset on Jan 1, 2025. That means every small restaurant operator faces a 20% increase in labor costs.
We encourage our Chamber members to stay up to date on Council action and to contact your Seattle City Council representative. We will continue to post articles that share more information about the issue and represent various points of view, including the three articles below.
Why Seattle restaurant owners are sounding alarms ahead of wage hike | The Seattle Times
Seattle’s hair salons are expensive to visit and to run. Here’s why | The Seattle Times
Seattle’s 2025 Restaurant Minimum Wage Increase Could Upend the Industry – Eater Seattle
