On May 14, 2024, the King County Council adopted a minimum wage higher than the state minimum wage (and some of the cities inside King County) for all employees working anywhere in unincorporated King County.
As of January 1, 2025, the minimum wage for unincorporated King County will be $20.29 per hour, with phase-in periods for some employers. Each year, the minimum wage will be increased by a percentage reflecting inflation, with the hourly rate for the following January 1 being announced in October of each year.
This new minimum wage will be phased in for certain employers based on the number of employees and annual gross revenues of the employer. Both the number of employees and gross revenues are determined by looking at the employer’s operations worldwide, not just those within unincorporated King County.
Small Employers
- Employers with 0-15 employees and gross revenues less than $2 million.
- For small employers, the new minimum wage will be phased in from 2025 through 2030. In 2025, small employers must pay at least $17.29 per hour, a $3.00 reduction from the basic minimum wage. Each year thereafter, the amount of the reduction will decrease by $0.50, until by 2031, small employers will be required to pay the basic King County minimum wage.
Medium Employers
- Employers with either 16-499 employees (regardless of the amount of gross revenues) or gross revenues in excess of $2 million (regardless of having fewer than 16 employees).
- In 2025, medium employers must pay at least $18.29 per hour. In 2026, they will be allowed a $1.00 hour reduction from the King County minimum wage rate. By 2027, they will be required to pay at least the King County minimum wage rate.
Large Employers
- Employers with 500 or more employees worldwide.
- Also includes all franchisees associated with a franchisor or franchise network that in the aggregate employs 15 or more employees.
- No reductions. Effective January 1, 2025, large employers in unincorporated King County will be required to pay $20.29 per hour, and that figure will go up each year for inflation.
Determining the number of employees for the purpose of ascertaining employer size during the phase-in period will be based on the average number of employees the employer had worldwide in the previous 12 months.
Unlike some city ordinances, there is no tip credit or benefits credit offsetting the King County minimum wage rate.
An open question for many employers will be how to pay employees who work in multiple jurisdictions with different minimum wages. For example, an equipment repair technician could fix equipment in Seattle, Tukwila, and unincorporated King County all in one week. Technically, the employer could track the time spent in each jurisdiction and pay that rate for that time. As a practical matter, just for ease of administration if no other reason the employer may just decide to pay such employee the highest minimum wage of the possible jurisdiction. Each city and the unincorporated county area have different means for determining which rate applies to the work, presenting a heavy administrative burden on employers. Additionally, other cities and regions are expected to continue adopting their own minimum wages, adding to this administrative burden.
The ordinance also provides that employees can file a lawsuit if they believe that they have not been paid the correct hourly rate. Before filing suit, however, the employee or the employee’s representative must provide notice to the employer of the wages claimed plus interest due (12 percent from the date the wages should have been paid or were underpaid) via certified mail or similar service. The employer then has 14 days to pay the claimed wages plus interest. If the employer does not pay the claimed wages plus interest, the employee may proceed to filing a lawsuit.
In a lawsuit, the employee can seek the following in damages:
- Wages owed;
- Interest at 12 percent (or higher if Washington law later allows a higher rate);
- Liquidated damages of up to twice the amount of wages owed, with no requirement of showing willful failure to pay on the part of the employer;
- Penalty of up to $5,000 if the court determines that the failure to pay was willful; and
- An award of attorney fees and costs.
Finally, the new ordinance prohibits retaliation for asserting any rights under the ordinance.
Key Takeaways
Employers not already paying at least $20.29 per hour to all their employees in unincorporated King County should begin now to prepare for the new minimum wage rate that starts January 1, 2025, including determining whether they will be able to take advantage of the lower phase-in amounts based on the number of employees and annual gross revenues worldwide.
Likewise, employers should determine whether their payroll system is able to make an hourly rate change mid-payroll period, as January 1, 2025, is a Wednesday and is for most employers mid-pay period. If the system cannot do so, then either the employer should increase rates at the beginning of the applicable pay period or put in place some mechanism to include with that paycheck any additional pay due as of January 1.
Employers should also designate someone to be responsible for reviewing and responding to any employee notices of failure to pay the proper rate and ensure that any employee who could receive certified mail notices immediately transmit such notices to the designated person.
The legal issues impacting this topic are and will continue to be ever-changing (Employment Law in Motion!), and since publication of this blog post, new or additional information not referenced in this blog post may be available.
This article is provided for informational purposes only—it does not constitute legal advice and does not create an attorney-client relationship between the firm and the reader. Readers should consult legal counsel before taking action relating to the subject matter of this article.
