More than a Wage Increase: What Washington’s Ballot Initiative 1433 Means for Small Businesses

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Going Concerns  12.22.2016
by Nick Oglesby

As this election cycle (finally) draws to a close, it’s time to look at what the newest ballot initiatives will mean for your business. The most notable change from an employer’s perspective was the passage of the “Washington Minimum Wage Increase, Initiative 1433.”

Title aside, 1433 does more than increase the minimum wage. It also requires employers to offer paid sick leave, a mandate that previously applied only to businesses in certain cities (Seattle, SeaTac). Here is how 1433 will work:

Minimum Wage

The text of the initiative mandates incremental wage increases from January 1, 2017 through January 1, 2020 according to the following schedule:

Jan. 1, 2017: $11.00/hour minimum.
Jan. 1, 2018: $11.50/hour minimum.
Jan. 1, 2019: $12.00/hour minimum.
Jan. 1, 2020: $13.50/hour minimum.

In September of each year thereafter, the Department of Labor and Industries will calculate a new minimum based on the rate of inflation, that will take effect the following January 1.

Of note to you restaurateurs, tips and service charges do not count toward the minimum hourly wage.

Paid Sick Leave

Put simply, as of January 1, 2018 employers statewide will be required to provide paid sick leave to employees. This leave will accrue at the rate of 1 hour of paid sick leave for every 40 hours worked, and can be used beginning the 19th calendar day after commencing employment.

The Department of Labor and Industries is developing “… procedures for notification to employees and reporting regarding sick leave, and protecting employees from retaliation for the lawful use of sick leave and exercising other rights under [the] chapter”, but here are some of the other details that we know so far:

  • It’s not just for surprise sicknesses. Leave can be used for:
    • Diagnoses, treatment, recovery, etc. And not just for the employee, but for family members as well;
    • Instances where the employee’s place of business (an employee’s child’s school or place of care) has been closed by order of a public official for any health-related reason; and
    • Absences that qualify for leave under the domestic violence leave act, chapter 49.76 RCW.
  • Employers may not require that the employee find coverage for their shift.
  • Up to 40 hours of accrued, unused paid sick leave will carry over year to year.
  • Employers will retain discretion in certain areas. Employers may:
    • Decide whether or not to allow “front loading,” where an employee wants to use time that they have not yet accrued (one can imagine myriad scenarios where an employee wanted/needed time off for expected, long term absences/recoveries);
    • Offer more generous leave policies than required;
    • Require employees to give reasonable notice of an absence from work, so long as such notice does not interfere with an employee’s lawful use of paid sick leave;
    • Require verification that an employee’s use of paid sick leave is for an authorized purpose, for absences exceeding three days (though these requirements may not result in an unreasonable burden or expense on the employee and may not exceed privacy or verification requirements otherwise established by law);
    • Choose not to reimburse for accrued, unused hours in the event of an employee’s termination, resignation, retirement, etc.

Next Steps

These changes are more than a threat to your business’ bottom line. From a legal perspective, you need to make sure that your employment processes are up to code.

  • You should already have the required notices posted for employees at your place of business, including “Your Rights as a Worker in Washington State.” Stay on the lookout for updates from L&I as the changes take effect.
  • Start to evaluate your internal hiring and employment practices to decide the issues that are within your discretion.
  • Create/Update old hiring packets, employee handbooks, etc.
  • Make sure that your record keeping processes are up to date. There is a good chance that your bookkeeping software, notebook, or excel spreadsheet does not yet include paid sick leave entries. This is especially important, since proper record keeping will be an enforceable part of the law once it takes effect.
  • When it comes to compliance, documentation and communication are your best watchwords. You should have plenty of time to update your processes, but the time is now.
  • If you have questions, ask. Government regulatory bodies would prefer to help keep your business in compliance over having to investigate a claim by one of your employees. Check out the free resources available to you.

See you all next time, have a very merry Christmas!

Nick

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