Information for Small Employers

(500 or fewer employees - also known as Schedule 2 employers)

For Small Employers, the City of Seattle’s $15.00/hour wage will be phased in over the next 5–7 years.

Minimum Compensation

All small employers are required to pay minimum compensation. Small employers can meet this requirement in two ways:
  • Pay hourly minimum compensation rate; or
  • Pay hourly minimum wage and make up the balance with employee tips reported to the IRS and/or payments toward an employee’s medical benefits plan.

1. Hourly Rate


Small employers pay hourly minimum compensation rate based on the following schedule:

Minimum Compensation
2016 (January 1) $12.00/hour
2017 (January 1) $13.00/hour
2018 (January 1) $14.00/hour
2019 (January 1) $15.00/hour

2. Tips and/or Medical Benefits


Small employers pay an hourly minimum wage and reach the minimum compensation rate through employee tips reported to the IRS and/or payments toward an employee’s medical benefits plan. If the tips and/or payments toward medical benefits do not add-up to the minimum compensation rate, the small employer makes up the difference.

Minimum CompensationMinimum Wage
2016 (January 1) $12.00/hour $10.50/hour
2017 (January 1) $13.00/hour $11.00/hour
2018 (January 1) $14.00/hour $11.50/hour
2019 (January 1) $15.00/hour $12.00/hour
2020 (January 1) TBD $13.50/hour
2021 (January 1) TBD $15.00/hour
In 2025, small employers will pay the same minimum wage rate as large employers and will no longer count employee tips and/or payments toward an employee’s medical benefit plan toward minimum compensation. The City of Seattle will calculate percentage changes to the minimum wage based on the Consumer Price Index (CPI).

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Information for Large Employers
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Key Terms

Employees
Seattle’s Minimum Wage Ordinance applies to employees working in Seattle, regardless of employees’ immigration status.


Employer Size
To calculate employer size, count the employer's total number of individual employees worldwide. For franchises, count all employees in the franchise network.


Wage
A wage includes salary, hourly pay, commissions, piece-rate, and non-discretionary bonuses. Wages do not include tips or payments towards medical benefits. However, payment toward medical benefits can reduce employers’ minimum wage requirements temporarily until 2018.


Medical Benefits
For an employee’s medical benefits to qualify toward the minimum wage, the plan must be the equivalent of a “silver” level or higher as defined in the federal Affordable Care Act. An employer cannot pay a reduced minimum wage if the employee declines medical benefits or is not eligible for medical benefits.

Other Requirements

Notice to Employees
Employers must provide employees with notice of their rights under the Ordinance. The notice must be in English, Spanish, and any other language that is commonly spoken by employees in the workplace.

Download Workplace Poster

Record Keeping
Employers must keep payroll records for three years.

Retaliation Prohibited
An employer cannot retaliate against an employee for:

  • Requesting to be paid the minimum wage.
  • Filing a complaint with the Office of Labor Standards concerning a potential minimum wage violation.
  • Telling a person about a potential violation or about their rights.

Enforcement
The Office of Labor Standards (OLS) began enforcing the Minimum Wage Ordinance on April 1, 2015.