Seattle’s New Minimum Wage Increase

Last week, after months of debate and speculation, the Seattle City Council voted unanimously to gradually increase the minimum wage to $15/hour, the highest minimum wage in the country. This new plan gives businesses with more than 500 employees nationally at least three years to phase in the increase — four if they provide health insurance. Smaller employers get seven years, which is the category into which we fall.

This certainly presents many challenges for numerous Seattle businesses. If these changes were to be implemented today, it would be a $700k increase in wages for our two Seattle restaurants. Certainly the phased-in approach helps, but now that a path has been clearly laid out for us, it’s time to get to work and integrate many of the new mandates. We’ve already solicited feedback from Guest Advisory Boards at our Seattle-based properties, and will also have conversations with our employee teams about what is important to them, and how we can best work together.

The El Gaucho Way

Because of the core values of our company, we will not compromise on these elements as we work to navigate through the challenges ahead:

  1. Succeeding is our only option. We will continue to come up with smart and creative ways to grow the business and manage costs where it makes sense for us. We will also be a sustainable business – our employees are counting on us.
  2. We revel in celebrating lives. We will not sacrifice what we do for our guests. We will not compromise on the quality of our products, nor the services we provide.
  3. We will not sacrifice what we do for our employees. We will continue to be a great place to work, and offer great income and potential for our employees, as we have since the beginning.

We will continue to place an extremely high value on providing the best in everything we do: the best experience and level of service for our guests, and the best working environment for our team.  My dad founded this company on seven core values, one of which is that hospitality is a profession, and we’ve created over 350 jobs and well-compensated team members. Our employees are offered full health care benefits at 25 hours a week for individuals and families, a generous 401(k) match, and excellent employee development and training. We are proud that our team members can afford to buy homes, have families, and live the American dream.

Why This Matters To Us

Our concerns are that the increase in minimum wage doesn’t solve the pay inequality issues in the restaurant industry, and it doesn’t take the importance of tip income into account. The IRS, banks, mortgage companies, unemployment insurance, disability insurance, and most importantly, our team, all recognize and value tips as income.  In addition, in order to comply with the new minimum wage laws, the vast majority of raises will go to the service teams, which will widen the income gap between them and our culinary teams.

We will all be affected by this change, whether as a guest, employee, or business owner. We would love to hear from you with any ideas or recommendations you have as we face the challenges presented to us. It is the feedback from our invested community of guests and our valued employees that will help us continue to be the world-class establishment that we strive to be.

This is only the beginning of the conversation. We look forward to gathering input from you and our employees, and we will keep you posted on our decisions and progress.

Sincerely,

Chad Mackay
President and COO

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