Seattle City Council Reduces Minimum Wage for App-Based Workers

Seattle City Council passes bill to reduce gig workers' minimum wage from $26.40 to $19.97 per hour and 35 cents per mile. Final vote on May 28 will determine fate of proposed changes to App-Based Worker Minimum Payment Ordinance.

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Aqsa Younas Rana
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Seattle City Council Reduces Minimum Wage for App-Based Workers

Seattle City Council Reduces Minimum Wage for App-Based Workers

The Seattle City Council has passed a proposed bill, Council Bill 120775, to amend the App-Based Worker Minimum Payment Ordinance, which would reduce the minimum wage for gig workers to $19.97 per hour and 35 cents per mile for engaged time while driving. The bill, sponsored by Councilmember Sara Nelson, aims to reverse the negative outcomes of the original "PayUp" ordinance, which set the minimum wage for delivery drivers at $26.40 per hour without tips.

Why this matters: This decision has significant implications for the gig economy and the livelihoods of thousands of app-based workers in Seattle. The outcome of this bill may set a precedent for other cities to reevaluate their own minimum wage laws for gig workers, potentially affecting the broader labor market.

The current ordinance requires a minimum network company payment of 44 cents per minute and 74 cents per mile for time spent and miles traveled. The proposed bill would remove minimum wage adjustments, reduce the per-mile rate, and remove the mileage factor from the current minimum wage law. Tips would not be included in the minimum payment. The bill would not repeal the minimum wage for gig workers, which is set at a guaranteed gross minimum wage of $19.97 per hour.

Councilmember Sara Nelson, who sponsored the bill, stated, "This law is clearly not working. Council Bill 120775 is an effort to reverse the bad outcomes caused by a flawed law and catalyzed by network companies imposing a new so-called regulatory fee, which caused a drop in customer orders." The Governance, Accountability, and Economic Development Committee approved the bill with four votes in favor and one abstention. A final city council vote is scheduled for May 28.

The original "PayUp" ordinance was enacted on January 13, but app-based delivery services enforced regulatory fees, causing a significant increase in the cost of orders and a subsequent drop in orders placed with these services. Data from DoorDash revealed that city retailers earned roughly $7 million less than expected in a six-week period after the law took effect earlier this year.

During a public comment period that lasted over an hour and a half, drivers spoke both for and against the proposed changes to the App-Based Worker Minimum Payment Ordinance. The Seattle City Council's decision to amend the ordinance and reduce the minimum wage for gig workers has sparked a heated debate among stakeholders. The final vote on May 28 will determine the fate of the proposed changes and their impact on app-based workers in Seattle.

Key Takeaways

  • Seattle City Council passes bill to reduce gig worker minimum wage to $19.97/hour and 35 cents/mile.
  • Original "PayUp" ordinance set minimum wage at $26.40/hour without tips, causing negative outcomes.
  • Proposed bill aims to reverse negative outcomes, including drop in customer orders and revenue.
  • Final city council vote scheduled for May 28 to determine fate of proposed changes.
  • Decision has significant implications for gig economy and livelihoods of thousands of app-based workers.