Owners of Subways, McDonald’s restaurants and other franchises in Seattle will have to raise their minimum wages on the same schedule as big businesses, after the U.S. Supreme Court rejected their challenge to city’s $15 minimum wage law.
Seattle gives businesses with 500 or fewer employees until 2019 or 2021 to reach the $15 minimum wage. Businesses with more than 500 employees must pay at least $15 by 2017 or 2018.
The International Franchise Association says that Seattle’s $15 minimum wage ordinance is unfair because it groups franchises with businesses that have more than 500 employees. The association argues that most franchise owners should be considered small business owners, instead of part of multinational corporations.
The organization sued the city of Seattle shortly after passage of the minimum wage law in 2014 on behalf of about 600 franchise owners within the city limits. The International Franchise Association says it is evaluating its next steps in the appeal.
Mayor Ed Murray noted that the courts have sided with Seattle throughout this court fight.
“Our phased-in approach to raising wages, developed by labor and business working together, minimizes disruptions — especially to our small businesses which are the backbone of Seattle’s vibrant economy,” he said in a statement.
Seattle was one of the first cities in the country to adopt a gradual hike to $15 minimum wage when the city passed the ordinance in 2014. San Francisco voters that same year also passed a similar gradual increase to $15 minimum wage by 2018.
Others are following suit. The states of New York and California this year passed laws that gradually raise the minimum wage to $15 over a number of years.
Editor’s note: this story has been updated to add reaction from Seattle Mayor Ed Murray’s office.