By Brant Henshaw | Treasurer and Director of Administrative Services
A lot of publicity was generated when Seattle adopted a “living wage” minimum wage ordinance this year. It has raised a lot of questions and caused some confusion so I will try to answer as many of them as possible here. We believe churches are Schedule 2 entities, meaning that they are not franchisees, and are not an integrated enterprise and will need to comply by April 1, 2015. However, this ordinance is new and untested and there are bound to be complaints and legal challenges that may change this.
Who is covered?
All non-exempt employees (salaried or not) are covered. In most churches the only exempt employee is the Pastor. As Schedule 2 Employers, any employee that works more than 2 hours in a two week period in Seattle is covered for that period of time they are working in Seattle, regardless of whether the individual church is physically located in Seattle. The two hours must be more than driving through or getting gas, but anything else accrues. It can be the responsibility of the employee to track and submit that time, but the employer must notify the employee about tracking the time and the employer’s obligation to pay the wage for “Seattle” time.
What is the wage schedule?
There are two separate pay schedules for Schedule 2 employers:
- One is the Minimum Wage
- One is Minimum Compensation – that is, the actual wage PLUS the value of other compensation (that is, tips, medical benefits etc.).
Both of these minimums must be met for each covered employee.
The minimum Compensation column is used as the minimum salary if you don’t provide benefits. If you provide benefits you must still meet the minimum wage in the left hand column as well.
If you have a church employee that you pay $X to per month for Y number of hours. Then the hourly amount must meet the table above.
The employer is required to give notice to employees of all this through handbooks, written materials, or a poster that is being created by the City of Seattle Dept. of Finance and Administrative Services. I recommend that the poster be used to avoid any allegations of misinformation.
What are the penalties?
- Failure to provide notice – $125 for first infraction.
- Failure to pay – warning plus a potential fine of $500 for first violation.
Changes to employment law can be complicated and as I mentioned, this ordinance is both new and untested. Still, if your church is located in Seattle or has non-pastoral staff working in the city, you will need to make sure you are preparing for these changes by posting the appropriate notice and by providing the necessary room in your budgets for these increases in salary.
If you have any questions, please feel free to contact me.