On May 24, 2014, the Seattle City Council passed an ordinance requiring a phase in over a number of years to a minimum wage of $15 per hour. The prior minimum wage was $9.32. This would make the minimum wage in Seattle amongst the highest in the US.
Clearly, this effects all independent franchised businesses. But there is another aspect to the law which further concerns franchisees. In the ordinance, a franchisee is treated like a big business if it is part of a franchise system with over 500 employees – and the ordinance counts employees of all franchisees in the system. So, even if a franchisee has 10 employees, if franchisees in the system have 500 or more employees, the individual franchisee will have to comply with a substantially faster phase in of the requirement by 2017 – or by 2018 if they pay towards an employee’s medical benefits plan.
A coalition of Seattle businesses called “Forward Seattle” attempted to gather petition signature to put the general issues relating to the minimum wage increase to voters on the November ballot. Despite announcements that the signatures were submitted, the group announced on July 23 that the attempt had failed.
The International Franchise Association filed a lawsuit in US District Court on June 11 to invalidate the ordinance claiming in part that it violates the Constitution by treating independent franchised businesses and other small businesses unequally. For more information about this suit and issues concerning franchisees in this ordinance, see www.SeattleFranchiseFairness.com.