- The Washington Times - Tuesday, June 3, 2014

The nation’s leading franchise trade group said Tuesday it is preparing to challenge in court Seattle’s move this week to establish a minimum wage of $15 per hour, saying it will force franchise owners to boost wages too high and too quickly.

The Washington, D.C.-based International Franchise Association (IFA) plans to sue Seattle officials because the new wage level “illegally discriminates against franchises” by categorizing them alongside big businesses. The Seattle City Council voted unanimously in support of the hike which, when approved by Seattle’s Democratic Mayor Ed Murray, would be the highest base wage in the country.

“We believe that the City Council’s action unfairly and arbitrarily discriminates against the 600 franchisees that own 1,700 franchise locations and employs 19,000 workers,” said Steven J. Caldeira, CEO of the IFA. “It’s an irrational policy that flies in the face of common sense.”

The law would be phased in over time, with all workers required to earn at least $11 per hour after April 1, 2015. Complete implementation would take three or seven years, depending on employer size, with employees of large businesses and franchises earning $13 by 2016 and $15 by 2017. Non-franchises and companies with fewer than 500 employees would have up to seven years to reach the $15 hourly level.

Mr. Caldeira’s group believes franchises, facing the expedited deadline, would no longer be able to compete in the marketplace and, at some point, cease to exist.

In Seattle, supporters of the drive to hike the minimum wage showed little inclination to compromise, celebrating the City Council vote by hoisting signs that read “15 now” and chanting and cheering.

“We did it. Workers did this. We need to continue to build an even more powerful movement,” Socialist City Council Member Kshama Sawant told The Associated Press.

She described Seattle as not only being a “hippie city” where citizens wear socks with their sandals but “also a city where different progressive groups can work together to bring about change.”

More than 24 percent of Seattle’s residents earn $15 or less per hour, and roughly 13.6 percent of the population lives below the poverty level, according to the city. Seattle has a population of more than 630,000.

This law could set a precedent for other states hoping to raise the wage and follow suit with Seattle. Mr. Caldeira said his group was ready to pursue legal action in other jurisdictions as well.

“The reason we’re throwing a stake in the ground in Seattle is that this would be precedent-setting,” he said in a telephone interview. “We don’t believe it’s a healthy proposition.”

The ultimate goal of the lawsuit, Mr. Caldeira said, is to have an equal implementation time frame for all companies.

“Franchises are not seeking special treatment, just fair treatment,” he said. “Fighting this provision that discriminates against them is the most important thing we can be doing to protect our small business owners in the short term. We’re just trying to level the playing field.”

This article was based in part on wire service reports.

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