Washington Business 2017 AWBI Small Business Report | Page 8

Minimum Wage: Initiative 1433 was passed by voters in the November 2016 election. The initiative increased minimum wage to $ 13.50 per hour by 2020( 4 years) for anyone 18 and over. The wage increase applies to all employers in Washington state.

The minimum wage will increase as follows:

Starting in January 2021, the minimum wage will be adjusted up according to the consumer price index( CPI). The CPI adjustment is consistent with the current law.

What does regulatory reform look like to you?

“ The combination of wages and sale tax discounts on purchasing out of state makes doing business in Washington questionable.”

— Pullman Business Owner

Paid Sick Leave: An additional component to I-1433 requires employers to pay sick leave at a rate of one hour for every 40 hours worked, beginning in January 2018. The initiative requires that an employer allow an employee to carry over a minimum of 40 hours per year of unused sick leave and does not contain a cap on how much sick leave can be earned in a year.

I-1433 will have a severe impact on small business in Washington state. It fails to provide any teen wage, training wage, or recognition of the additional cost, beyond wages, that employers pay. While it does apply statewide, it does not prevent local jurisdictions from setting a more stringent rate as Seattle and SeaTac have already done. The patchwork of different wages will continue.

Washington’ s manufacturing sector, which includes several small firms, will be particularly hard hit by this arbitrary increase. Manufacturers compete globally and must price their products and services accordingly. We have seen manufacturers decide to not expand or move out-of-state to remain competitive.

Further, Washington businesses that border Idaho are competing with the federal minimum wage of $ 7.25 per hour. This hurts the small-business owner who cannot absorb the higher coast for labor. As employers are required to provide a higher minimum wage, they are driven to cut other benefits to survive. The increase will also result in wage compression. Those who have worked hard and received wage increases are now earning the same as those who are newly hired.