Is your small business prepared?
Updated August 15, 2019
The state Legislature may not be in session, but the bills and budget provisos it adopted earlier this year have a number of state agencies scrambling to create or update rules affecting your small business.
New Requirements In Effect
Sales tax now applies to Oregon residents and others
Washington businesses must now collect sales tax on purchases made by customers from Alaska, Oregon, Montana, Colorado, Delaware, New Hampshire, American Samoa, and several Canadian provinces who previously were not charged sales tax.
Those customers may later apply for a refund of the state portion of the sales tax (6.5% of the purchase price) if their Washington state sales tax payments for the year total $25 or more. The local portion of the sales tax is excluded from this calculation.
Washington retailers may want to provide nonresident customers a copy of the Department of Revenue’s Special Notice about this change.
Job applications/compensation history
Employers may no longer ask job applicants to provide wage or salary (compensation) history. This includes internal applicants for new positions, transfers, or promotions. In addition, employers cannot require that an applicant’s prior wage or salary history meet certain criteria.
Applicants may voluntarily provide compensation history. A prospective employer may verify an applicant’s compensation history only after a job offer, including compensation package, is extended to the applicant.
Moreover, upon request of a job applicant, businesses employing 15 or more workers must provide the applicant information about the minimum wage or salary of the position they applied for, if a job offer is made.
Current employees who are offered an internal transfer, a new position, or a promotion must now be shown the new job’s wage scale or salary range if they request it.
Employers should review their job application forms to remove any requests for or references to job applicants’ salary history. More information is available from the Department of Labor & Industries (L&I) here.
Breastfeeding accommodation
Businesses employing 15 or more workers must provide reasonable break time and a private area, that is not a bathroom, for mothers to pump breast milk. This applies for two years following the birth of the child.
If the job site or place of business does not have a suitable private space, the employer and worker must cooperatively identify a convenient location and work schedule to accommodate the worker’s needs.
The Office of the Attorney General has more information (see Item #8) and an updated downloadable workplace poster available online.
Paid Family and Medical Leave reports and payments
The deadline for reporting hours worked and wages paid, as well as paying premiums due for the first and second quarters of 2019 is fast approaching. For this year only, reports and premium payments for the first two quarters are due August 31.
Detailed directions and additional information are available from the Employment Security Department (ESD) here.
Workers’ compensation coverage for LLCs and corporate officers
The Department of Labor & Industries recently updated its administrative policy regarding workers’ compensation coverage requirements and eligibility for corporate officers and for limited liability company members and managers.
While administrative policies do not have the force of law themselves, they are used by department staff to determine compliance with relevant state statutes and rules.
NFIB has electronic copies of these documents available in PDF format.
Rulemaking in Progress
Overtime rule
The Department of Labor & Industries has proposed sweeping new changes to state overtime rules that will likely impact every business employing salaried workers.
Basically, the proposed rule, if adopted in its current form, would require salaried workers meeting the executive, administrative, professional, or outside sales “duties test” to be paid the equivalent of at least 2.5 times the state’s minimum wage – or nearly $80,000 – to be exempt from overtime and paid sick-and-safe leave requirements when the rule takes full effect in 2026. Qualifying computer professionals would need to be paid 3.5 times the state minimum wage by 2022. These minimum salary thresholds would increase with inflation beginning in 2027.
NFIB’s summary and salary chart are available here. More information is available from the department here.
The public hearing phase has ended, but the department is accepting written comments until 5 p.m., Sept. 6, 2019. Comments can be emailed, faxed, or mailed. See L&I’s link above for details.
Paid Family and Medical Leave
In addition, Phase 5 and Phase 6 rulemaking for Washington’s Paid Family and Medical Leave program is still underway. The topics covered in these phases include:
- Collective bargaining agreements
- Employer reporting
- Overpayment of benefits
- Collection and recovery of overpayments
- Employment restoration
- Employer differentiation
- Employee guidance
- Appeals
- Any necessary changes related to the 2019 Legislative Session
More information is available here.
Lead Rule
The Department of Labor & Industries is updating its rule related to occupational lead exposure. This project has been underway since 2016. The current draft rule, released June 2019, is available for review.
The department is still soliciting feedback, and has scheduled two more stakeholder meetings: September 13 and September 20. Both will be held from 9 a.m. to noon at L&I’s Tukwila office located at 12806 Gateway Dr. South, Tukwila, 98168. Conference call and online participation options are available. See link below for additional information.
NFIB and other business organizations have expressed concern about signage, and employee blood testing and monitoring, that may be required for small retailers selling ammunition, fishing sinkers, lead shot, solder, grout, wallpaper, or other items containing lead that workers may come into contact with only occasionally.
More information is available here.
Paid Sick Leave
L&I has also released a draft administrative policy entitled “Paid Sick Leave – Frequently Asked Questions.” NFIB is reviewing the document in advance of a September 25 stakeholder meeting. Comments will be due in mid-October 2019.
Since this is an administrative policy, it is unlikely that hearings or other comment opportunities will be available to the general public.
NFIB will update members about this administrative policy as we participate in the stakeholder process this fall.
Unemployment benefits/hours of availability
The Employment Security Department is still soliciting stakeholder feedback on potential new rules regarding what hours an individual must be available to work as one of the requirements for obtaining unemployment benefits.
In what appears to be a response to legislation introduced earlier this year, the department is interested in addressing concerns that certain unemployed workers, primarily those in occupations typically requiring around-the-clock availability, may not be able to accept a position with similar availability requirements due to child- or elder-care obligations. We suspect this may be situations where an unemployed worker would be at risk of losing benefits for refusing to accept a job offering only a graveyard shift, for example, when they are unable to arrange childcare during those hours.
House Bill 1445 and Senate Bill 5473 sought to allow unemployment benefits for workers who voluntarily quit due to schedule changes or who refuse job offers with a work schedule that would interfere with the worker’s ability to obtain or provide care for children or vulnerable adult relatives during the proposed work hours.
NFIB will update members if this stakeholder process results in a proposed rule.
Other Items of Interest
NFIB is also engaged in other activities that may result in new rulemaking or reports to the Legislature recommending new laws, such as:
Small Business Bill of Rights
The new state operating budget includes an appropriation for the Governor’s Office of Regulatory Innovation and Assistance (ORIA) to coordinate negotiations between NFIB and as many as 27 state agencies that have regulatory authority over small businesses in our state. These negotiations are intended to result in agreement on a Small Business Bill of Rights, along the lines of that proposed by NFIB in House and Senate bills this year. ORIA met with NFIB’s Washington Leadership Council in June to begin this process. A report to the Legislature is due in November.
Standard benefit health insurance policy
NFIB is the only non-medical business member of a workgroup appointed by the state Health Benefit Exchange and Health Care Authority to assist in the design of a so-called “standard benefit” health plan. These policies would be available for purchase as early as the 2021 plan year. NFIB’s goal is the adoption of a plan design that shifts cost-sharing requirements, like deductibles, copayments, and coinsurance, into the monthly premium. This would make it easier for individuals and families whose members have chronic, high-cost medical conditions (like cancer or autoimmune diseases) to budget and afford health insurance and treatment or medication costs.
The workgroup also includes the state medical and hospital associations, as well as health insurers and patient advocate organizations. It meets monthly through December 2018.
Universal health-care coverage
NFIB has been appointed to a workgroup exploring options for providing universal health-care coverage to Washington residents. The workgroup was authorized in the state operating budget. NFIB is skeptical about the cost and regulatory requirements of any such proposal, particularly given a recent presentation to a legislative committee that indicated $28 billion annually may be necessary to operate such as system – that would be in addition to similar amounts paid in private-sector health insurance premiums converted into taxes, and money from the federal government equal to its current spending for Medicare and Medicaid in this state.
The initial meeting will take place from 1 p.m. to 5 p.m. September 20.
The other workgroup members are listed here. In addition to State Director Patrick Connor, the workgroup includes NFIB members Sen. John Braun and Rep. Joe Schmick.
Residential contractor liability
L&I has appointed NFIB to a task force that will explore potential new or enhanced consumer safeguards including increased contractor bond amounts, additional criteria for contractors, changes to options for consumer recovery, and other proposals to address concerns in the residential construction sector. This task force was authorized in Senate Bill 5795. NFIB’s opposition to the initial draft of the bill, work to amend the bill to an acceptable version, and our longtime membership on the department’s Construction Underground Economy Advisory Committee were factors in this appointment. The task force must issue a report to the Legislature by June 30, 2020.
The other workgroup members have not yet been announced. The initial meeting will be on August 29.
Department of Revenue Business Advisory Council
NFIB’s state director and three Leadership Council members are among the 15 appointees serving on the Department of Revenue’s Business Advisory Council. This group provides feedback and suggestions about departmental activities, rulemaking, and draft legislation. The department has indicated that this group will be instrumental as it develops rules and policies for implementing the new B&O tax surcharge on services, and other recent changes to the state’s tax laws. The council meets quarterly.
For more information about any of these rules, proposals, or workgroups, please contact NFIB’s Washington State Director Patrick Connor at 360-786-8675 or by email here.
