Washington’s statewide and local minimum wages will substantially increase in 2017. While most employers are aware that Initiative 1433 raises the state minimum wage to $11.00/hour on January 1, 2017, the Initiative’s mandatory paid sick leave requirements (set to take effect in 2018) are not as well known. This advisory summarizes the main requirements that Initiative 1433 imposes on all Washington employers and compares the new state law changes to parallel requirements in local laws for Seattle, Spokane, Tacoma, and the city of SeaTac.

Initiative 1433: Minimum Wage

Washington voters passed Initiative 1433 in November, electing to raise the minimum wage statewide from $9.47/hour in 2016 to $13.50 by 2020:

  • January 1, 2017: $11.00/hour
  • January 1, 2018: $11.50/hour
  • January 1, 2019: $12.00/hour
  • January 1, 2020: $13.50/hour

The new Washington minimum wage law does not supplant local wage laws enacted in various cities, so many employers will still need to ensure compliance with federal, state and local requirements.

Local Minimum Wage Updates

Seattle:

Seattle’s Minimum Wage officially climbs to $15/hour for large employers. Effective January 1, 2017, the minimum wage rates and minimum compensation scheme in Seattle will be as follows:

To view the image click here.

As a reminder, employers must post information in English and Spanish (and possibly additional languages) about the Seattle minimum wage, paid sick and safe leave, wage theft, and fair chance employment ordinances.

Other Cities:

Effective January 1, 2017, the minimum wage in Tacoma and SeaTac will rise as follows:

  • Tacoma: $11.15/hour
  • City of SeaTac: $15.34/hour (for certain hospitality and transportation employers)

Initiative 1433: State Paid Sick Leave (and Comparison to Local Ordinances)

Effective January 1, 2018, Initiative 1433 requires all Washington employers to provide paid sick leave, regardless of the employer’s size. Here is a summary of the key components of the sick leave law, and how it compares to requirements in other Washington cities with paid sick leave laws:

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As with the minimum wage, many Washington employers will find themselves subject to overlapping paid sick leave laws that are confusingly similar yet not completely identical. For example, while most paid sick leave ordinances cap annual accrual and use, Initiative I-1433 caps neither (but does cap maximum rollover). Similarly, many employers familiar with the Washington Family Care Act (WFCA) will observe that Initiative I-1433 defines “family” much more broadly than the WFCA, meaning employees will be able to use sick leave for paid family care in a wider range of circumstances (including care for the employee’s adult children and siblings).

One of the concerns about passing employment laws by initiative is that Initiative 1433 predictably contains many gaps and ambiguities, which will hopefully be addressed when the Department of Labor and Industries issues interpretive rules. For instance, Initiative 1433 completely ignores the fact that many employers offer Paid Time Off (PTO) programs rather than dedicated sick leave. The law contains not a single reference to PTO, and accordingly fails to address how employers with PTO programs should ensure compliance with the new requirements. In addition, unlike local ordinances, Initiative 1433 lacks an express exception to the three-consecutive-day rule for verification in cases of suspected sick leave abuse.

A note for employers with no-fault attendance policies: Employers with no-fault attendance policies will need to consider how to adapt given the law’s prohibition on policies that count use of paid sick leave as absences for disciplinary purposes.

A note about payout at separation: While the Initiative does not require payout of accrued but unused sick leave upon separation, be sure that your written policies could not be interpreted otherwise to avoid the risk of potential contract issues.

A note for employers with employees represented by labor organizations: Initiative 1433 does not permit its wage or sick leave provisions to be waived in a collective bargaining agreement.

Practice Tips: What Should Employers Do Now

  • Ensure payroll has made any necessary changes to implement new minimum wage rates for 2017.
  • Employers with employees in Seattle, Tacoma, or Spokane must ensure they have sick leave policies in place for 2017 that comply with the applicable local ordinance(s).
  • Later this year, employers should revise any employee handbooks or sick leave policies to ensure compliance with the new sick leave law. Employers may choose to have one policy for all of Washington – providing the most generous aspects of the sick leave requirements that apply to their workforce – or have separate policies for each City with its own requirements.
  • Employers with multi-state or statewide workforces are encouraged to contact legal counsel to ensure sick leave policies are compliant with applicable local and state requirements.