SEATTLE — A controversial bill to address Seattle's expiring minimum wage tip credit was pulled from consideration on Friday, in favor of further discussions with stakeholders.
The announcement was made by councilmember Joy Hollingsworth, who represents District 3.
"Seattle's small, neighborhood restaurants help define our diverse communities, provide critical jobs and offer opportunities for career advancement for workers and entrepreneurs. It is in the spirit of helping these restaurants survive lingering pandemic disruption and increased costs that I began this conversation—equal with the commitment to advance wages and the rights of all workers in our city," Hollingsworth said in a statement.
The current minimum wage tip credit, which went into effect in 2015, expires at the end of this year.
Hollingsworth recently introduced legislation that would extend the tip credit, but it was met with criticism from council colleagues and hourly wage workers.
The current minimum wage is $19.97 per hour in Seattle, but businesses with fewer than 500 employees are allowed to pay $17.25 per hour as long as they contribute $2.72 per hour toward medical benefits, or if the employee makes the same amount in tips per hour.
Without the tip credit, smaller employers would have to pay $2.72 more per hour to comply with the city's minimum wage requirement — the same amount paid by larger businesses.
"My primary goal has always been to help create an environment to put the most money in workers pockets," said Hollingsworth. "The well-being of our workforce is paramount to our city. My initial proposal was never an end, but the beginning of a process. I look forward to the next few weeks to focus on working with stakeholders, including small business owners, labor unions, and our Mayor's Office to find a balanced solution. I'm eager for the work that lies ahead."
The Seattle Restaurant Alliance reacted to Friday's announcement swiftly, releasing the following statement:
"Far from keeping faith with the 2014 agreement to raise Seattle's minimum wage, the failure of leadership to address the unsustainable impacts of the ordinance (Friday) represents a betrayal of that agreement. The goal of the employer community's participation in the deal was to avoid running small business owners off a fiscal cliff and to avoid forcing massive cost-cutting decisions onto their businesses, including cutting employee hours. Increasing labor costs by 20 percent overnight – which was not part of the agreement but will happen if no action is taken by the City – will do exactly that."