By Assunta Ng
Northwest Asian Weekly
Dilemmas and misconceptions about the Seattle’s $15 wage minimum law begin since its implementation on April 1.
A big misconception for many Seattle workers caused by the minimum wage law is that, “they are going to get $15 an hour on April 1,” said Evelyn Mendoza, Uwajimaya’s Human Resources Director, who was part of the city’s panel on the new labor law on April 14 at City Hall.
Although the law was implemented on April 1, employees won’t be getting $15 until 2018. The City provides a phase-in approach from $11 to $15 in 2017, with an incremental increase year by year. (See related article.)
What strategies do companies use to deal with the new law? Some businesses can increase prices, while some businesses just can’t increase their gross revenue by law and common sense. What can they do? What about companies, which have offices in both Seattle and outside Seattle? How do they pay their people in compliance with Seattle’s wage law? What’s the penalty for not complying with the law?
Mendoza said Uwajimaya sent out letters to each employee and also set up meetings with translators, to educate them about the new law and explain how part-time workers can get $11 an hour with no benefits, while full-time ones receive $10 if they do receive benefits.
One business owner who runs a transportation service, asked how he should pay his staff who has to drive to Seattle, Tacoma, and Everett.
Karina Bull, Interim Director of the City’s Office of Labor Standards, said if the driver works more than two hours within a two-week period in Seattle here and there, he should be paid the Seattle wage like the Shuttle Express drivers. If he or she just drives through Seattle and does not stop in the city, the owner doesn’t need to follow the new law, she added.
Mendoza said Uwajimaya has set up a system for outside-Seattle employees to clock in their hours, when they are required to come into its Seattle store to work for a festival.
Dilemmas for business owners
“How are we able to increase the price for child care when their parents are in jail? Where am I going to get the money?” asked Jackie Boles, director of Health and Family Services for non-profit Tiny Tots Development Center, a childcare agency with a staff of 44.
Boles said she couldn’t afford to raise many of their teachers’ salary although they have college degrees, and now they are making less than their non-degree colleagues, who just got a raise because of the new law.
Makaylaa Powers, director/owner of Visiting Angels, echoed the same sentiment. “How can we increase our gross income when our business is taking care of seniors? Seniors have no way to increase their income.”
Powers said her Eastside workers might prefer to work in Seattle just because of a better wage. It’s unfair to pay for the same work with a different pay scale, she said, and it will make it harder for her to compete for workers on the Eastside.
Molly Moon Neitzel, owner of Molly Moon’s Ice Cream, said she has increased her workers’ wage following the new rule. She said her employees are loyal and enthusiastic about work and has low turnover.
Boles said you can increase the price of ice cream and people will still buy it, but she could not increase fees for her child care services because the agency is funded by the state and city, which won’t allow the increase.
Neitzel said her managers have a hard time in accepting that they are only paid $1.66 more an hour compared to the non-management employees with less experience and responsibilities, who received an increase in their minimum wage to $10 or $11. She said she would like her managers to get $2.50 more, but at this time, can’t afford it.
On other occasions, the Asian Weekly interviewed how the new rule has affected businesses in the International District and downtown.
“Now, we are okay about the wage increase,” said Richard Chang, owner of the Kau Kau BBQ Restaurant. “But when it gets to $15, it will be very tough.”
Another Chinatown restaurant boss who asked not to print her name, said she didn’t know anything about the new wage law. “I haven’t received any notice, no letter from the city. Nobody told me anything.”
I-Muin Liu, owner of Oasis and Eastern Cafe, said his employees might actually make less money after the new wage law. His employees’ tips go into a common pool and he records and divides them for all his staff. In the past, they might not have reported their tips; now they have to be taxed together as revenue.
In the past, Liu just charged $3.75 for a cup of coffee, including tax. Now, the price is $3.75 not including tax.
One Asian American employee who works in a popular downtown restaurant, said her manager hasn’t done anything. “I did ask him. He said, ‘We couldn’t move so fast. We need more time.’”
One Asian grocery store owner did implement the new change. She said the store is strict on new hires. “We don’t want them if they are slow.”
One nonprofit agency manager in downtown said most of its workers are currently paid minimum wage. As the result of the new law that requires businesses to pay 85% of the minimum wage, they are now considering more workers under 18 years old.
One way for restaurateurs to compensate for wage increase is to add a service charge on their menus.
Bull said employees have to be aware that employers have to disclose the percentage increase is to go toward employees or in their own pocket.
Neitzel had heard complaints that some restaurateurs have stolen tips from wait staff through the service charge excuse.
Bull said during the first year, her office receives complaints, it would send a letter of warning for violators, and follow up with investigations and interviewing witnesses. It would require businesses to show payroll records. Violators would have to pay back plus interest. There will be no penalty. But the second year, April 1, 2016, the office can go out and actively investigate, file charges in addition to the above-mentioned procedures, and then impose penalties.
Michael Chin, an attorney who is the enforcement manager for the Seattle Office for Civil rights and Office and Labor Standards, is in charge of 12 investigators.
The next increase of the wage to $13 will begin on Jan. 1, 2016, and $15 wouldn’t be implemented until April 1, 2017. (end)
Assunta Ng can be reached at email@example.com.