$15 Minimum Wage: Seattle Sued As San Francisco Puts It To A Vote

$15 minimum wage has been passed by Seattle, Washington and Richmond, California (a suburb of San Francisco). The City of San Francisco is putting the issue to voters this Novembers, with a plan that will raise minimum wage in the city incrementally from the current San Francisco minimum wage of $10.74 – already among the highest in the nation – to a $15 minimum by 2018, according to an AP report. Meanwhile, the Seattle $15 minimum wage is in the midst of a legal challenge.

San Francisco city supervisor Jane Kim had this to say about the proposed $15 minimum wage hike:

“I can’t tell you how happy I am. San Francisco is yet again setting the bar on workers’ rights. All San Francisco employers will be paying $15 an hour by 2018. There will be no tip credit, no health care credit. These are pure wages workers will be bringing home to their families.”

You read that right. The wage increase in San Francisco – if it is passes as proposed – will include waitstaff and other tipped workers. Not everyone is a fan of the proposal. Business owners in those industries have expressed concerns.

Gwyneth Border, a representative of the Golden Gate Restaurant Association, who is seeking an exemption for employers with tipped workers and credit for employers that offer medical insurance benefits, had this to say about the San Francisco proposal:

“We (in the restaurant industry) are a very different type of industry. Hospitality is the backbone of the city and a very labor-intensive endeavor. For businesses with tight margins and low prices, it’s going to be hard.”

Opponents of the Seattle $15 minimum wage have suggested the same thing, though they’ve taken their fight to the next level by suing the city in federal court over the new law, which would raise the minimum wage to $15 in seven years.

According to an AP report, the lawsuit opposing the Seattle law says this:

“(The Seattle $15 minimum wage law) unfairly and irrationally discriminates against interstate commerce generally, and small businesses that operate under the franchise business model specifically.”

Part of the reasoning in the lawsuit stems from the fact that small businesses – defined for purposes of the Seattle $15 minimum wage law – have seven years to implement the wage increases, while businesses with 500 or more employees must implement them within three years if they don’t offer health insurance and within four years if they do offer health insurance. Franchise owners, such as a person who owns a single McDonald’s or Subway restaurant – would fall under the stiffer guidelines because McDonald’s and other franchises have considerably more than 500 employees nationwide, even tough the individual franchisee otherwise meets the criteria of a small business.

The lawsuit further states:

“The ordinance will impose significantly higher labor costs on small franchisees than on their non-franchised competitors. It is foreseeable that some small franchisees in Seattle will not survive this prolonged period of unfair competition.”

What do you think? Will the Seattle $15 minimum wage withstand the lawsuit? Should it? Will San Francisco beat Seattle to the punch by raising their minimum wage to $15 first – and if they do, will it (and should it) include tipped workers?