The Battle Over Minimum Wage Rages On
Entrepreneur|January 2016

The battle over minimum wage rages on, no more so than in the franchise world.

Jason Daley

Last April, the city of Seattle began rolling out an incremental minimum-wage increase. Employers with 500 workers or fewer would bump hourly wages up to $15 over the course of seven years; larger businesses would have to reach the mark in three years, with an immediate raise to $11 per hour. (The federal minimum wage is $7.25.) It has been a controversial law on many fronts, but no more so than in the franchise world. For the purposes of the law, any franchised business is considered a large employer even if the local franchisee has only a handful of employees because, the city argues, franchisees that are part of a larger system have the financial wherewithal to absorb the pay raise sooner than other small businesses can.

Seattle is not alone in putting pressure on franchisees. In June, the Los Angeles City Council voted to increase the minimum wage there to $15 per hour by 2020. In September, the state of New York raised the minimum wage for fast-food workers to $15 per hour, to be phased in over three years in New York City and six years in the rest of the state. Other municipalities, including Washington, D.C., and Portland, Ore., are looking at similar increases.

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