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Scales of justiceCharles Hausberg is a guest author and a member of GSB’s Labor and Employment practice group. You can reach Charles at chausberg@gsblaw.com or at 206.816.1525. 

In December 2015, the City of Seattle passed the “Wage Theft Prevention and Harmonization Ordinance,” which made changes to all four of Seattle’s labor standards ordinances—Paid Sick and Safe Time (PSST), Minimum Wage, Wage Theft, and Fair Chance Employment.

Across the board, the new law provides harsher penalties for noncompliance than in the past. For example, there is now a rebuttable presumption that an employer has retaliated if it takes adverse action within 90 days of the employee’s exercise of protected rights. An employer in this situation must demonstrate by clear and convincing evidence that the protected activity was not a factor in the decision to take adverse action. Thus, it is essential to carefully document all responses to concerns about employees’ protected rights as well as reasons for adverse employment actions.

Sea-Tac airportFourteen lawsuits were filed last week against employers at the Seattle-Tacoma International Airport for paying less than the $15 minimum wage approved by Sea-Tac voters in 2013. Defendants include baggage handling firms, rental car agencies, food-service establishments and logistics firms. These lawsuits have been filed by defendants represented by Attorney Duncan Turner of Badgley Mullins Turner and seek class action status. The lawsuits currently cover about 40 plaintiffs, although Mr. Turner estimates this could grow to 1,500 plaintiffs and that total back-pay sought could be $14 to $21 million.

Alaska Airlines and three other plaintiffs had filed a lawsuit arguing that the Sea-Tac minimum wage should not apply to the airport. The State Supreme Court ruled against them in August, 2015, and in December, 2015 rejected a request to review the case.

If you have any questions about these lawsuits, would like to review a copy of one of the complaints, or would like to discuss applicable wage & hour issues, please feel free to contact Greg Duff at gduff@gsblaw.com or 206.816.1470.

TipsIn a recent blog post, we highlighted the trend amongst hoteliers and restaurateurs toward adopting service charge models to meet the rise in state and local minimum wage requirements. Although “no-tip” and “service charge” policies are receiving their fair share of attention in the news, employers with improperly designed tip pools are garnering their own headlines—and lawsuits. For example, Red Robin recently agreed to a $1.3 million settlement in response to class action claims against the company that it impermissibly included back of house kitchen staff in the servers’ tip pool. If your company requires employees to pool their tips, or is considering doing so, it will want to avoid some common and costly pitfalls that have beleaguered others. For starters: 

As fast food workers across the country stage walkouts in a push for a $15 hourly wage and the Obama administration renews its call to boost the federal minimum wage, states on the left coast have already embraced employee-friendly increases.

Oregon, the state with the second-highest minimum wage in the country, announced last week that it will raise its minimum wage to $9.10 in 2014.  It’s in good company: Oregon’s neighbor to the north just announced that Washington will raise its state minimum wage to $9.32 (the highest in the nation), and Oregon’s neighbor to the south just enacted a law that will hike California’s minimum wage to $10 per hour over the next three years in one dollar increments – from $8 to $9 on July 1, 2014, then to $10 on January 1, 2016.

American Flag Piggy Bank

The current federal minimum wage is just $7.25 per hour, but at least 19 states and the District have set a higher wage for workers.  Nine of these states (Oregon and Washington among them) have indexed their rates to inflation, such that the rate is revisited every year to keep pace with changes to the economy.

Certain cities have set minimum wage even higher than the state minimum wage.  San Francisco, for example, currently has the nation’s highest minimum wage of $10.50 per hour.  Meanwhile, the City of SeaTac, Washington will have a unique $15 minimum wage initiative on its ballot this November.  Known as Proposition 1, this union-sponsored initiative singles out hospitality and transportation employers within the City of SeaTac (home of Sea-Tac Airport).

Numerous state legislatures across the country have also been introducing bills to raise their minimum wages.  These wage hikes come amid a national debate over whether minimum wage workers should be paid more – what advocates have called a “living wage.”  There’s little consensus: economists disagree on the effects of raising a minimum wage and the issue is politically divisive.  Some contend that increasing wages can improve the economy for everyone by increasing the demand for goods and services because those that work would spend more if they had money in their pockets.  Others argue that raising wages by government mandate leads businesses to cut jobs and reduce employees’ hours, effectively hurting the workers who were supposed to benefit from the increased wages.  As the debate continues, it is unclear what other states – or even the federal government – will do in the future. Stay tuned for updates on significant changes.

Please email me or Greg if you have any questions.

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Greg Duff, Editor
Greg Duff founded and chairs GSB’s national Hospitality, Travel & Tourism group. His practice largely focuses on operations-oriented matters faced by hospitality industry members, including sales and marketing, distribution and e-commerce, procurement and technology. Greg also serves as counsel and legal advisor to many of the hospitality industry’s associations and trade groups, including AH&LA, HFTP and HSMAI.

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