Hollingsworth with Hana Yohannes of E Pike’s Shikorina Pastries (Image: Councilmember Joy Hollingsworth)
District 3 Seattle City Council representative Joy Hollingsworth is sponsoring a bill that would extend the tip credit put in place to protect the city’s small businesses during Seattle’s decade-long phase-in of a higher minimum wage tied to inflation.
The effort comes as a credit for tips and benefits for companies with fewer than 500 employees is set to expire. Industry advocates say wages could jump nearly $3 an hour for some small restaurants and bars.
“Due to higher than usual inflation resulting from the COVID-19 pandemic, the gap between the large and small employer minimum wages grew farther apart in recent years, making the transition to a single minimum wage a more significant change than anticipated,” a council staff analysis of the bill reads. “As a result, some small employers, particularly those with tipped employees such as restaurants and other food service establishments, may need to increase wages by a substantial amount in 2025.”
The credit was part of the political maneuverings around the 2014 passage of the new higher wage law that tied the city’s minimum wage to the rate of inflation in the Consumer Price Index for the Seattle Tacoma Bellevue area.
Ten years ago, the city imposed the new higher wage law championed by then-District 3 leader Kshama Sawant which called for increasing pay rates through phases with different levels for large and small employers, and for employers who provide some other kinds of compensation for their workers. In 2015, CHS looked at the first wave of large employers reaching the $15 minimum wage mark.
To start 2024 as the wage reached the $20 milestone for the city’s largest employers, small employers with 500 or fewer employees that pay at least $2.72/hour toward the employee’s medical benefits and/or where the employee does not earn at least $2.72/ hour in tips had their minimum wage set at $17.25 an hour. CORRECTION: We have fixed an error that mistakenly described which businesses are currently subject to the tip credit. Sorry for the error.
Under the proposed legislation from Hollingsworth, the credit would be made permanent for the small business category companies by lowering the amount at which inflation would increase wages for the small category than the rate for large companies. The legislation would also allow employers to include “piece-rate payments, commissions, and bonuses toward the total wages.”
We have asked Hollingsworth’s office for more information about her sponsorship of the bill.
UPDATE 7/31/2024 3:55 PM: “Workers deserve to make Seattle’s minimum wage without relying on a tip credit in a safe, secure, and healthy working environment. We also want to make sure that those working environments exists,” Hollingsworth said about the proposal in a statement to CHS.
Hollingsworth warns of “a catastrophic financial cliff” on January 1st if the tip credit is allowed to expire.
The first-year council member says the bill will raise “everyone’s minimum wages by inflation” and will keep the large and small business tiers in place. She points out it also will require the Office of Labor Standards and Office of Economic Development to “work with all stakeholders to provide a report and policy recommendations.”
“Our method will be open, transparent, educational, and honest about our current economic landscape for restaurants and food service,” Hollingsworth says. “Over the next month, I will pour my energy into working with workers, small business owners and Labor Union Organization to hopefully find a sustainable and scalable solution.”
“We will not focus on politics or political stances, but actual good policy that will encourage job growth, increase wages to address affordability, and keep small businesses open,” Hollingsworth said.
Anthony Derrick, her office’s Chief of Staff, cut his teeth in politics with Working Washington doing outreach for the $15 minimum wage campaign ten years ago.
Sawant, who has mostly been focused on national and international issues since her decision to step aside after leading District 3 for a decade, is blasting the Hollingsworth proposal as an attack on “the landmark $15/hour minimum wage law that has lifted hundreds of thousands workers out of poverty, benefiting women and people of color in particular.”
The Seattle Times reports the bill is likely to be introduced this week with the council facing a narrow window to pass the change before the fall’s budget process begins.
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Why are we ok with some businesses paying lower wages than others? If you want to penalize big business vs small business, do it through taxes rather than on the backs of workers.
I be fine with that – as long as it also accompanies an end to tipping. It’s a weird system that exists pretty much no where else in the world at all…
Simply do not tip?
Problem solved
clarification – I’d be fine with an end to lower wage floors for certain professions.
Yes, I agree with that, but my point was more about different wage floors depending on the size of the business. That is just anti-worker.
Smile and body type based earnings.
Thank you Joy! Please ignore Kshama’s rants. She is out of touch with small business and the importance of their success. If it wasn’t for small business the City of Seattle would have e much more serious budget crisis.
Naw…Businesses under 500 employees. That’s Joy Hollingsworth!
You my friend are out of touch.
Funny how not long ago labor was “essential” and got raises to come to work. Then quickly snatched away when they were no longer deemed essential.
Low wages gets dumped on the backs of every single tax payer.
Business first!!!
This really should make sense to everybody. A $3/hr increase might be a lot of fun for the average bartender, but that is a massive load to bear for a small business. If you’ve ever been privy to seeing the books on a restaurant, it’s a no-brainer.
Raise prices.
Stay in your lane.
What lane?
We’ve raised prices 4 times since the start of Covid. We continue to try and find ways to accommodate the demands of Seattle’s novel progressive ideas without driving inflation (worsening the problem), and it is extremely difficult to do. An uninformed, simplistic “raise prices” comment tells me a commenter is out of their league and flippantly trying to shut down a debate, not find a solution. By “stay in your lane”, I mean “don’t talk about things you don’t understand”.
“A lot of fun.” I think you overestimate the buying power of $3 these days. Amazing how people complaining about the struggles of small business owners always blame the employees for needing a living rather than looking at rent or other costs.
I’m not blaming employees, I’m saying that when you make $17.25 plus $25+ (pretty f&cking common) an hour and work full time, you can pull in $90k a year. THIS IS NOT A BAD INCOME. I’m saying “do you really need to make another $6k a year in exchange for a mass die-off of service establishments in Seattle? I say no. And you can afford a $2k a month rent without any trouble at all. No need to get a roommate, no need to leave the city. Rent problems solved. Just go tend bar somewhere. All you need to do is show up for the interview, then show up to work and apply yourself. Keep going to work. Be nice to people. Problem solved. You think I’m blaming, but these are very difficult people to find in this city, so it’s really hard to sympathize with these arguments that employers are just being greedy when the uneducated perspective persists in this town that $90k a year is just too damn little and the rent is too damn high, so let’s destroy all the employers by demanding more More MORE! Meanwhile, blame everything except the minimum wage for causing inflation (typically the largest cost category of any for a small business). All I’m saying is that if you make $20+ an hour in tips like a majority of service workers do, you definitely make a living wage in this town.
90k? someone owes me money.
Maybe, maybe not, but as an industry vet for over 20 years, this is what you can easily make in Seattle. In fact my employees do.
“pretty common” is not EVERYONE.
A guaranteed wage is basic.
I am guessing you are a business owner?
Yes, is that a problem? In 25 years of working the industry, I’ve been a barista, a line cook, a busser, a server, a barback, and a bartender. Are you suggesting that by owning a business, I have forgotten decades of experience? Gimme a break.
Yeah, being able to pay rent is pretty fun.
Barry clearly is a waitress. Knows EXACTLY what service industry workers make…Barry is an expert…lol
He’s a business owner and wants welfare like Joy Hollingsworth.
Yes, I am in fact an expert on the service industry. I have a comprehensive and thorough knowledge of all aspects of the industry. You can disagree with my conclusions all you want, but let’s not resort to mockery unless I bring a faithless argument. I’m speaking about these things because I have the experience to do so. By the way, I don’t talk about this in my daily life. I say this not to brag, but to defend myself against your toothless sarcasm. Grow up.
Hollingsworth and Logan Bowers hiding under the veil of urbanism to screw over workers is not that unexpected.
Begone, Sawantist. The grown ups are running the store now. Go smash some windows at a bank in Bellevue.
Right…because self dealing is okay right?
You may not care, but at my restaurant, a bartender working full time, making minimum wage is going home with just shy of $95k a year after tips. Many of these folks had no skills when they started the job. How much is enough, and how do you define getting “screwed”? Does a bartender really need to make $100k, when they can make $95k in Seattle on minimum wage? Accounting for tips makes sense. Tipped workers have benefited far more than non-tipped individuals, sometimes to an absurd degree. It is often not spoken of, because power to the people, but it all comes with an outsized burden on small businesses. If you make $100k running a bar and your 10 full time employees get a $3 an hour raise, it costs you $62,400. How is this even reasonable?
You think those bartender’s expenses (rent, food, insurance, etc) have been pretty “reasonable” over the past few years?
The costs are what they are. You are deflecting and not addressing my previous comment, which presents some hard to argue details. Do math please.
Explain flat wages for 40 years? I think you are out of touch. Low information and simply have a personal interest.
Just like Joy Hollingsworth and the rest of them. If they had no personal businesses I would not care as much. But low wages are on ALL taxpayers backs.
What are you talking about? The minimum wage has increased annually since 1999, and after years of accelerated growth, it is now tied to inflation. Wages are not flat, neither in an absolute nor relative sense. Everyone here is arguing their personal interest. You are arguing your personal interest. Don’t talk about that like it’s a sin. Why do you hate businesses so inherently? Imagine a world without them and describe your life, please.
the gross amount reflected on paystubs doesn’t accurately reflect what workers take home at the end of the day. the total amount of tips made for the shift is reported, but we all know tips are split amongst multiple people. so we’re also consistently getting taxed on money we’re not getting, in addition to our tips ALSO subsidizing our own wages.
we’re not asking for 90k. We’re asking for the minimum wage. Still, in that scenario, someone working 40 hours a week at 20/hr makes 38,400 before taxes. that’s not that much. The extra tip income, if customers decide to tip us, is frankly our earned bonus income. we would probably have more luck collaborating on getting cheaper rent for small businesses or other credits the city can give you on operating costs. It should’t come out of the money workers generate by showing up for so many hours of our lives to run these establishments.
also this talk about skills—no matter what, there is a lot of physical labor involved in this industry. restaurant workers’ time has the same value as business owners’ time. I’d also love to hear what these businesses are making in comparison to their costs. That would provide a better picture of things.
At $38,400, a 30% allocation for rent is $960/month. Get a roommate and that’s $1920 a mo for a 2 bed. Bottom of the barrel, but there are plenty of these apartments on the market, and we are talking about minimums here. It should be bottom of the barrel. In fact, it should be tied to the bottom of the barrel rent price.
Labor is whatever, marz. I’ll tell you what some of these small businesses make (I can speak for my own) and you tell me what you think. I’ve had mine for 15 years. For the first decade, I worked 70-80 hours a week and took home between $45k and $60k (yeah, that’s before taxes, which is how the world talks about income). This is between $10.82 and $16.48 an hour. What’s more, there were two years in there that I had to live off of savings (money I made working as a bartender at ~$8/hr minimum wage). This took a lot of discipline. Now I make $120,000, and next year’s change in minimum wage if the tip allocation goes away will cost me about half my income. Literally all of my employees will make more than me. Even some of the part time ones.
It is not hard to argue that the owner of a business deserves a higher wage, when you account for the up front risks, sacrifice, inability to walk away, leases, loans, experience necessary and hours worked. In my case, I think my hours are worth way more than my employees, being that I wear about ten hats – the maintenance person, the bookkeeper, the HR department, the amateur lawyer, the permitting specialist, the designer, the contractor, etc… PLUS I can do every one of their jobs, so I am the fill in when someone calls in sick and nobody feels like covering. Not one of them can fix a toilet.
OF COURSE my time is worth more, but more importantly, ask yourself who the fuck would go through all the anguish and suffering of starting a business and managing people, especially in a city like this that doesn’t understand the difference between a corner restaurant and Microsoft. Me? No. I’m sick of being demonized all the time in this city as someone who ostensibly adds jobs and tax revenue and culture and value to this city and perpetually has to justify wanting to get compensated a reasonable amount of money for that. I, for one, would not continue to do this for $60k a year. It’s way too much work and it’s way too stressful. I would much rather go be someone else’s bartender at the point.
Figure out how to tax the ultra rich and stop trying to wring out small business just because we’re more visible.
I’d LOVE to know where this magical 6 figure salary is.
No word where it is though. It’s just werdz and numburz.
I’m saying that tipped workers are making decent money at the current minimum wage, so businesses shouldn’t be required to compensate as much, considering the outsized actual cost of an increase of $3/hr per employee. Additionally, I don’t know too many tipped jobs where you only make $3/hr in tips (never heard of one), so the majority of tipped jobs at minimum wage make a whole lot more than $40k. The vast majority of the time, you should be able to make at least $10/hr, which puts you around $56k a year.
Good for them…That’s not everyone…A tiny business where prices are low? Good for your people.
Well, that takes courage. Good for her for getting out in front on this controversial issue.
To admit a little self dealing is good as long as it’s YOUR business?
No idea what you’re talking about there Butch.
Meaning Joy Hollingsworth has less than 500 employees herself. If you are in office and vote for welfare for businesses it is on all taxpayers backs to make up that wage so people can eat and stuff.
Also I’ll probably just stop tipping. Basically they are shifting this cost from business owners to consumers, but if you don’t tip they still have to pay it.
Ah, now the true colors show. Have fun with being the person everyone sneers at when you walk in.
how are they shifting the cost to consumers? consumers are currently tipping towards the minimum wage. the cost would be put on the business profits. raising prices is just one solution. cheaper rent is another.
Sawant has no right to speak against anyone since she declined to run, but since she did, I will point out if she’s against it, that means it’s likely a good idea.
No way tipped employees should make full minimum wage.
I can with 100% certainty say that all these bootlickers in the comments are also terrible tippers.
Wish I could say I was surprised that Hollingsworth is so intent on seeing her constituents wages decrease.
It’s fun how she talks about fighting displacement but then doesn’t support people being paid enough to afford to rent here.
Between this and her pro-cop views she is not doing a great job of supporting our LGBTQ+ communities’ needs.
You’d be very wrong there A.J.
I know you are but what am I?
A bootlicker, by your description, who tips very well. Any other questions?
Yeah, go f yourself. Start by checking your comrade Cdresident up there, and then go grab a calculator. Your tropes are tired, and poorly characterizing people instead of addressing an actual argument makes you a thoughtless troll. You do realize that when you just call names and slander people engaged in good faith arguments, it devalues your entire school of thought, right? You are saying, “you’ve got a great point, and it makes me mad.”
Y’all are hilarious, acting like I’m the one not making valid arguments while neither of you make any attempt whatsoever to actually address the issues. As I very clearly stated:
– Hollingsworth has very publicly claimed to be against gentrification and wants to improve homelessness
– increasing pay helps people stay in their homes and not be displaced; opposing increased pay is not compatible with her stated platform that she ran on
– LGBTQ+ communities are over represented in low wage jobs and also have a well documented and justified distrust of the police. Hollingsworth’s anti-wage and pro-police votes are in direct conflict with community interests.
– you wouldn’t be so upset about being called terrible tippers if you were not terrible tippers. Please, prove me wrong and give good tips.
Now to address the issues brought up by you two:
You: I’m a thoughtless troll poorly characterizing people instead of addressing an actual argument.
Me: My previous response still stands: I know you are but what am I?
Poverty is the price of low wages. Remember that every time you shake your fist at encampments, open drug use, crime and violence. Social services are a subsidy to businesses that can’t afford employees.
They do not care. It’s about THEM and THEIR wallet. Nothing more. Same with sweeping homeless etc. It’s all for businesses to be free of an friction as we pay for their poor management etc. Or simply greed.
Flat wages 40+ years is not enough. They are spoiled.
stfu up about “flat wages” and go Google “historical minimum wage Seattle”.
I thought I should point out an error in the 6th paragraph. The small businesses allowed to pay the lower minimum wage are the ones that DO pay at least $2.72/hr in health costs (or whose employees DO make at least that much in tips), not the reverse.
Thank you for catching that
I see a correction has been made, but Chris on Denny’s version makes more intuitive sense to me than the corrected article, which says in connection with the lower minimum wage:
“small employers . . . that pay . . . medical benefits and/or where the employee does not earn . . . tips”
The word “not” here is what makes this not make sense IMO. I don’t know which one is true, I’m just trying to understand this.
Thanks for CHS <3