The Supreme Court has announced that it will not be hearing a challenge posed by business groups in Seattle against the city's minimum wage law.
This is good news for labor groups that have been lobbying for higher rates as not hearing the challenge is tantamount to the high court supporting the law mandating a $15-an-hour minimum wage in Seattle. The law took effect in April 2015 and requires companies with at least 500 employees to raise their minimum wage rate to $15 by 2018. Smaller companies in the city have until 2021 to comply.
The International Franchise Association (IFA), as well as five franchises, sued Seattle, citing discrimination from the new law, as they are being treated as large businesses just because they are included in multistate networks. They aren't necessarily against the new minimum wage law, but they are arguing that franchises are essentially small businesses and so must be treated as such.
"Seattle's ordinance is blatantly discriminatory and affirmatively harms hard-working franchise small business owners every day since it has gone into effect," said Robert Cresanti, IFA president.
The Service Employees International Union and Seattle officials, however, countered that franchises cannot be considered as typical small businesses because franchising arrangements offer numerous advantages such as bulk purchasing, brand recognition and access to loans.
According to a National Employment Law Project official, several cases against minimum wage laws enacted in various localities are already before state courts. However, Seattle's was the first to reach the Supreme Court.
With the high court rejecting the challenge from Seattle's business groups, it is also likely to dismiss other challenges that will come its way related to minimum wage laws.
Earlier in April, thousands marched to protest low minimum wages in the name of the $15 movement. It's definitely gaining traction, but the movement has also received criticisms from business groups touting "real-world consequences" when wages are increased, such as employing robot workers instead.
The federal minimum wage is set at $7.25 per hour, less than half of what the $15 movement is pushing for. Seattle is the first major city in the United States to commit to higher basic wages, while other cities such as Los Angeles and San Francisco have followed with varying terms. As for states, New York and California have followed suit.
