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Seattle Home Care Franchises Must Follow City’s $15 Minimum Wage Law

May 10, 2016

The Supreme Court on May 2 turned away a legal challenge filed by the International Franchise Association (IFA) over Seattle’s $15 minimum wage law, a move that has implications for some home care agencies in the city.

The IFA originally sued Seattle in 2014, shortly after it became the first major city to pass a $15/hour minimum wage law. The group argued that the law incorrectly classified small franchise locations as “large businesses” — a business with 500 or more employees — therefore obligating them to pay their workers at least $15/hour as early as 2017.

The IFA argued that many franchise locations in Seattle had far fewer workers, and therefore should not have to fully comply with the $15/hour minimum until as late as 2021, according to the terms of the law.

Home Care Agency Fights Back

Joining the IFA’s lawsuit were the owners of BrightStar Care of North Seattle, a home care agency affiliated with the Illinois-based BrightStar Franchising.

BrightStar Care employs just 22 people directly, the IFA’s lawsuit says, yet they are still recognized by Seattle law as a “large business” because of their association with BrightStar Franchising.

Last year, lawyers representing the city of Seattle argued successfully before the U.S. Ninth Circuit Court of Appeals that franchise locations, even small ones like BrightStar Care, should be classified as large businesses.

Their franchisee status gives them certain business advantages — such as brand recognition and access to loans from their parent company — that allow them to pay higher wages sooner than true mom-and-pop small businesses can, Seattle’s lawyers argued.

The Ninth Circuit agreed. The IFA then appealed the court’s decision to the Supreme Court, which rejected its challenge without comment.

— by Matthew Ozga

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