New Seattle Labor Laws in Effect for Small Businesses
Most employers know they have a financial interest in their workers’ well-being. Employers who have been employees, especially those at small businesses, are likely to have a personal interest in their workers, as well. Most employers want to comply with labor laws. However, being an employer means managing a complex machine with a lot of moving parts that, despite our best intentions, can sometimes break down. When communication breaks down between employer and employee about current employment laws and regulations, particularly as they pertain to the rights of employees, a lot of otherwise unnecessary trouble—some of it very costly—can follow.
This issue has recently become the focus of attention in Seattle, Washington, where 2016 amendments to current labor law have been enacted. There’s a lot of information and legalese for small business owners to process. Unlike a large corporation that has an HR or Payroll Specialist on hand to decipher legal changes, small business owners are themselves responsible for understanding and following these ordinances or face penalties for any failure to implement properly. The Seattle labor laws are put in place with employee rights in mind, and employers need to make sure they understand their implications as they conduct their day-to-day operations. (If you’re looking for information on possible paid family leave in Washington, check out “Paid Family Leave: New Labor Standard for Washington?” by labor expert Wendy Gillihan, of Gryffin Consulting.)
To ensure that these new laws are understood and being implemented properly, Seattle’s Office of Labor Standards, a division of the Office for Civil Rights, is embarking on an education and outreach campaign to Seattle businesses. Although the information is available on various city government sites, navigating and interpreting the changes so as to avoid any infractions or liability that might lead to a lawsuit still presents a challenge.
Fines and lawsuits are a real possibility. In April, US News & World Report wrote that Seattle has “investigated 106 businesses and completed cases against 23 others, levying fines and payment of back wages totaling more than $172,000” in the past year. Large and small businesses were investigated, including restaurants and retail stores.
Townsquared Seattle’s Washington labor law expert and recent appointee to Seattle’s Labor Standards Advisory Commission, Wendy Gillihan of Gryffin Consulting, has been working tirelessly to educate small businesses about the new Seattle labor laws and answer questions that arise as a result. Knowing there was a lot of uncertainty about how to comply with the law in the Seattle small business community, we asked Wendy to host an educational workshop on labor laws. The free workshop was so successful, we’ve planned another, for Tuesday, May 24, starting at 8:30 am, at Fred’s Wildlife Refuge (128 Belmont Ave East). RSVP here to save your spot.
For those employers who can’t make it to the Seattle labor laws workshop, we’re sharing the four main points that any Seattle employer should be aware of in regards to the new labor laws:
- Minimum Wage
- Wage Theft
- Fair Chance Employment
- Paid Sick and Safe Time
While these are not all new ordinances, the fact that they are all in effect as of 2016 means that it’s essential to know, understand, and follow them.
For businesses with fewer than 500 employees (so pretty much all small business!) as of April 1, 2016, Seattle labor laws require pay of $12.00 per hour unless you contribute at least $1.50 per hour towards the individual employee’s medical benefits and/or if the employee earns at least $1.50 per hour in tips. If you do pay $1.50 per hour towards an individual employee’s medical benefits and/or the employee earns at least $1.50 per hour in tips, then you are required to pay $10.50 per hour.
Among the Seattle labor laws, this is an especially tricky one and, of course, something no employer wants to be accused of. Unfortunately, wage theft isn’t just the obviously criminal practice of intentionally withholding pay. Wage theft could be you not providing your employees the details of the businesses tip policy in writing or forgetting the time they may have taken to come in a little earlier than their scheduled shift to take the trash out. These oversights constitute wage theftand can be a serious blow to any business. It’s crucial that an employer make the following information available to all employees.
Written information must include:
- Employer’s name and contact information
- Employer’s rate of pay, eligibility to earn overtime, pay basis (hour, shift, day, week, commission), and regular pay day
- Explanation of employer’s tip and expense reimbursement policy
- Itemized statement of pay information on pay days
As an employer, you’re also expected to meet pay requirements such as:
- Paying minimum wage
- Paying overtime—do not misclassify employees as exempt
- Providing work breaks
- Paying amount promised
- Paying for work off the clock
- Paying employees tips earned
- Reimbursing employee expenses
- Classifying employees correctly—do not misclassify employees as independent contractors
Fair Chance Employment
The Fair Chance Employment ordinance was devised to ensure that job applicants were not being unnecessarily denied employment based on conviction and arrests records. To comply with Seattle labor laws, employers must ensure that they follow these guidelines when hiring for a position:
- Job ads cannot exclude a category of applicants (felons, pregnant women, etc.)
- Job applications cannot include questions about conviction or arrest records, unless the employer has already screened the applicant for minimum qualifications
- Employer cannot deny job or engage in other adverse employment action based solely on an applicant’s arrest record
Of course, there are some exceptions to these rules—particularly around children and other vulnerable populations—and any questions should be directed to the Office of Labor Standards for clarification around these rules. Regardless, employers should bear in mind the following guidelines throughout the hiring process.
Delay criminal background checks until after applicants have been screened for minimum qualifications. Then follow procedures before taking an adverse action based solely on a criminal background check. These procedures include:
- Providing the applicant an opportunity to explain or correct criminal background check information
- Holding the position open for at least two business days
- Having a legitimate business reason that employing the person will harm the business
Paid Sick and Safe Time
Paid Sick Time and Safe Time (PSST) is a new term that many employers may not yet be fully acquainted with. New Seattle labor laws require paid leave for both sick time and safe time. “Sick” is understood as a physical or mental health condition, including a medical appointment. Safe time may be related to situations including domestic violence, sexual assault, stalking, and other public safety issues. This paid time accrues and is contingent upon a tier system, which is based on the business’s number of Full-Time Employees (FTEs). For small businesses, those from 4-49 FTEs, this means that employees accrue 1 hour of PSST per 40 hours worked. Employees can carry over up to 40 hours of accrued PSST in a given benefit year. More information on PSST and the differences in tiers based on your number of FTEs can be found here.
Questions? Always ask!
Any challenges to or aspects of these ordinances, including anything related to your rights as an employer or the rights of your employees, should be directed to Seattle’s Office of Labor Standards. The material here is for informational purposes only and not for the purpose of providing legal advice! You should contact your attorney or the Office of Labor Standards to obtain advice with respect to any particular issue or problem.
If you’re not sure of what questions you might need to ask or how these ordinances may affect your business, then save your spot at our free upcoming workshop on Labor Law Standards, on May 24, hosted by Townsquared and led by Wendy Gillihan of Gryffin Consulting.
Townsquared is excited to be in Seattle neighborhoods! Listen to cofounder Nipul Patel talk about why Seattle was a natural choice on KKOL’s business show, Sound Advice.