On Thursday Oct. 4, The Seattle Office of Labor Standards (OLS) announced an increase to the Seattle minimum wage, effective Jan. 1, 2025. An annual increase to the minimum wage is required by the Minimum Wage Ordinance. The minimum wage applies regardless of the employee's immigration status. The minimum wage increase will reflect the rate of inflation based on the Consumer Price Index (CPI-W) for the Seattle Tacoma Bellevue area.

Starting in the new year, ALL businesses both large and small will pay employees $20.76 per hour.

"Seattle has one of the highest minimum wages in the country - this is a good thing for workers, a good thing for our overall economy, and something we should take pride in," Seattle Mayor Bruce Harrell said in a press release. "As one of the leading members of the original team who developed Seattle's groundbreaking minimum wage legislation, my mission is the same now as it was then - ensuring Seattle is both a great place for workers and a great place for small businesses."

Small businesses will no longer be able to make up any part of the minimum wage with tips or medical benefits paid to their employees.

"On January 1, the temporary tip credit for small businesses will expire, as determined by the law passed in 2014," Harrell continued in his release. "While this is the right thing for wage fairness, we recognize it will present a significant change for many small businesses who are still recovering from the impacts of the pandemic and the resulting record inflation. Our office convened discussions to help address the concerns of all stakeholders. As the tip credit expires, we are committed to aggressively addressing many of the pressures facing small restaurants moving forward - from public safety to inflation, insurance, and a wide array of other cost pressures, including best practices in addressing the absence of a tip credit."

According to the OLS, the Minimum Wage Ordinance sets the minimum wage for employees working within city limits. Seattle's current 2024 minimum wage is $19.97/hour for large employers and for small employers who do not pay at least $2.72/hour toward the employee's medical benefits and/or where the employee does not earn at least $2.72/ hour in tips. Small employers who do pay $2.72/hour in medical benefits and/or where the employee earns at least $2.72/hour in tips currently pay $17.25/hour.

"I will be continuing our conversations with small businesses to identify tangible and actionable ways we can help make Seattle more affordable," said Harrell. "We want successful, prosperous, and vibrant small businesses and entrepreneurs in our city, and we are committed to addressing these challenges, keeping existing small businesses here in Seattle, and ensuring this is a place where anyone has the opportunity to start a small business and succeed."

Mayor Bruce Harrell released the following statement after the Office of Labor Standards announced the 2025 minimum wage increase and structure:

"Our office convened discussions to help address the concerns of all stakeholders. As the tip credit expires, we are committed to aggressively addressing many of the pressures facing small restaurants moving forward - from public safety to inflation, insurance, and a wide array of other cost pressures, including best practices in addressing the absence of a tip credit.