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US Supreme Court lets stand Seattle's $15 minimum wage

The nation's high court on Monday declined to hear an appeal from business groups that alleged the ordinance decision was unfair to franchises.

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Ted S. Warren/AP/File
A sign that reads '15 Good Work Seattle' is displayed below Seattle City Hall after the Seattle City Council passed a $15 minimum wage measure. The US Supreme Court on Monday declined to take up a challenge to the measure.

The Unites States Supreme Court on Monday declined to hear an appeal by business groups against a lower court's decision to uphold Seattle's $15 minimum wage.

The law passed by Seattle in April last year was the first of its kind, requiring businesses with more than 500 employees nationwide to lift the minimum wages of Seattle workers to $15 an hour by 2018 and smaller companies to do so by 2021.

The International Franchise Association's (IFA) 2014 lawsuit focused on Seattle law's treatment of local franchises as subsidiaries of brands like McDonald's or Burger King rather than independent businesses, meaning they had to comply by the earlier deadline.

A federal judge in Seattle and the San Francisco-based Ninth US Circuit Court of Appeals earlier rejected claims that the ordinance was discriminatory.

Seattle officials and the Service Employees International Union (SEIU), which were supportive of the city in the case, said franchises are not the same as small businesses because franchising offers inherent advantages such as access to loans, brand recognition and bulk purchasing. However, the IFA countered that those benefits still cost them due to royalties, fees, and rent.

Under pressure from unions and workers right groups, Seattle paved the way for other West Coast cities of Los Angeles and San Francisco, as well as the California and New York state legislatures who have followed in some form.

As divisions in Congress have made substantial worker rights reforms unlikely at the federal level, a number of cities and states have taken such efforts upon themselves. Earlier this year San Francisco became the first city to offer fully paid parental leave. New York State has mandated a partial paid leave scheme that fell in line with other states, California, New Jersey, and Rhode Island.

The IFA expressed disappointment with the court's decision, saying the lawsuit was an attempt "to level the playing field" for the 600 franchise businesses that employ 19,000 people in Seattle.

"Seattle's ordinance is blatantly discriminatory and affirmatively harms hard-working franchise small business owners every day since it has gone into effect," the group's president, Robert Cresanti, said in a statement.

The case is International Franchise Association v. City of Seattle, US Supreme Court, No. 15-958.

This report contains material from Reuters.

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