SEATTLE (CN) – Seattle businesses can add surcharges to adjust to the city’s new $15 an hour minimum wage, but must clearly disclose them and follow the state attorney general’s guidelines.
Attorney General Bob Ferguson said the guidelines were prepared after he received reports of Seattle restaurants adding surcharges to offset the higher minimum wage.
“Businesses are legally permitted to impose surcharges related to minimum wage increases. But if they choose to do so, my office will ensure that workers get the benefit as advertised and consumers have the information they need to understand the full price of goods and services,” Ferguson said in a statement.
The guidelines say the surcharge must be “conspicuously disclosed” in advance. For restaurants adding the charge, it must be disclosed in an itemized receipt and on menus.
Businesses may not mischaracterize the charge as a “tax” and the charge must be used as described. If the business says the charge is funding employee wages or health coverage, proceeds must not be used for any other purpose.
Surcharges are subject to state tax.
In April, Seattle increased the city’s minimum wage to $15 an hour, to reach that level in three to seven years, depending on the size of the business.
Voters in the city of SeaTac approved a $15 an hour minimum wage last year.
“The attorney general’s guidelines are an important reminder that surcharges described as helping cover employee wages or benefits should be going to that purpose,” said David Rolf, who was co-chair of the City of Seattle’s Income Inequality Advisory Committee, and is President of SEIU 775.
Los Angeles recently increased its minimum wage to $15 an hour, to take effect in steps over several years. Los Angeles County is considering a similar minimum wage hike .
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