If you are a small business employer (500 or fewer employees) in the city of Seattle, you should note that starting January 1st 2016, the minimum compensation rate will increase to $12.00/hour or $10.50 minimum wage assuming the balance to get to $12.00 will be made up with employee tips reported to the IRS and/or payments toward an employee's medical benefits plan.
Small employers pay hourly minimum compensation rate based on the following schedule:
|2015 (April 1)||$11.00/hour|
|2016 (January 1)||$12.00/hour|
|2017 (January 1)||$13.00/hour|
|2018 (January 1)||$14.00/hour|
|2019 (January 1)||$15.00/hour|
Small employers pay an hourly minimum wage and reach the minimum compensation rate through employee tips reported to the IRS and/or payments toward an employee’s medical benefits plan. If the tips and/or payments toward medical benefits do not add-up to the minimum compensation rate, the small employer makes up the difference.
|Minimum Compensation||Minimum Wage|
|2015 (April 1)||$11.00/hour||$10.00/hour|
|2016 (January 1)||$12.00/hour||$10.50/hour|
|2017 (January 1)||$13.00/hour||$11.00/hour|
|2018 (January 1)||$14.00/hour||$11.50/hour|
|2019 (January 1)||$15.00/hour||$12.00/hour|
In 2025, small employers will pay the same minimum wage rate as large employers and will no longer count employee tips and/or payments toward an employee’s medical benefit plan toward minimum compensation. The City of Seattle will calculate percentage changes to the minimum wage based on the Consumer Price Index (CPI).
Café 123 is a restaurant with 25 employees. It does not pay toward employee medical benefits. Servers earn tips; kitchen employees do not earn tips.
Starting January 2016, Café 123 will pay a minimum compensation of $12.00/hour.
To meet this requirement:
Café 123 will pay kitchen employees $12.00/hour.
If servers report at least $1.50/hour in tips to the IRS in a pay period, Café 123 will pay them $10.50/hour for a total minimum compensation of $12.00/hour.
If servers average less than $1.50/hour in tips in a pay period, Café 123 must pay the difference. For example, if a server averages $.75/hour in tips in a pay period, Café 123 will pay the difference of $.75/hour. The server will receive a total wage of $11.25/hour and a total minimum compensation of $12.00/hour.
At Caro & Associates, we understand the importance of taking action with a small business and that even smallest measures, like our optometry bookkeeping services, can impact your business’ bottom line and contribute to its success.
Managing your optometric practice with modern electronic health record (EHR) and point of sale (POS) systems is one of the most critical parts of running a successful and efficient practice.
Whether you have just opened an optometry practice, or you are looking to improve the efficiency and financial health of your existing practice, using metrics to improve your bottom line is the best strategy to track noticeable growth.