November 2016 was a dynamic month for laws relating to Washington State workers. At the state level, Washington voters approved Initiative Measure No. 1433 (“the Law”), which provides incremental increases of the state minimum wage beginning January 1, 2017 and paid sick leave beginning January 1, 2018. Washington was one of two states—the other being Arizona—to approve ballot measures providing for paid sick leave during the November general election. Washington and Arizona join five other states—California, Connecticut, Massachusetts, Oregon and Vermont and numerous other localities including the Washington cities of Seattle, Tacoma and Spokane— who already require employers to provide employees paid sick leave. Locally, Seattle voters also approved Initiative 124, which imposes new and significant health and safety, healthcare, and hiring requirements on the City’s hotel industry.1
Additionally, on November 14, 2016, the Spokane City Council approved amendments to the Spokane Earned Sick and Safe Leave Ordinance (“Ordinance”), which was initially passed by the City Council on January 11, 2016. The Amendments fill gaps the original ordinance created and provide for an administrative enforcement system for receiving and resolving complaints.
In this article, we will discuss important developments regarding the new statewide Law and the amendments to the Spokane Ordinance.
Washington’s Minimum Wage Increases
For those Washington adult workers who are not otherwise exempt from the state’s minimum wage requirements, the Law implements the following incremental increases to the minimum wage:
- $11.00 per hour beginning January 1, 2017
- $11.50 per hour beginning January 1, 2018
- $12.00 per hour beginning January 1, 2019
- $13.50 per hour beginning January 1, 2020
- Annual adjustment for inflation beginning January 1, 2021
The Law’s minimum wage increases apply to all employers, regardless of size.
The Law specifies that employers must pay all tips and gratuities to its employees, and they cannot be counted toward the minimum wage. These requirements are not different than the law as it existed previously, but now they are codified in the Washington Minimum Wage Act. The impact of these changes on mandatory tip pools, if any, is not clear.
The Law also states that employers must pay all automatic service charges (related to food, beverages, entertainment, and porterage) to its serving employees, unless the employer specifically discloses in an itemized receipt and on any menu the service charges that are not payable to the serving employee as defined in RCW 49.46.160. Service charges paid to employees also cannot be counted toward the minimum wage.
The Law’s minimum wage requirements will not supersede any local law providing greater minimum wage rights than the Law requires, such as the Seattle, Tacoma, and SeaTac minimum wage ordinances. The Law requires the Washington State Department of Labor and Industries to adopt and implement rules to carry out and enforce the provisions of the Law.
Washington’s Mandatory Paid Sick Leave
The Law’s paid sick leave requirements, which will be codified in Washington’s Minimum Wage Act, Chapter 49.46 of the Revised Code of Washington, will not supersede any local law providing greater sick leave rights than the Law requires.
Covered Employers and Employees
The Law’s requirement to provide paid sick leave applies to all employers, regardless of the size of the employer.
Because the Law will be codified within Washington’s existing Minimum Wage Act (the “Act”), it is possible that the current definition for covered employees under the Act will apply to the new paid sick leave requirements. The Act’s definition of employee excludes several categories of workers such as white collar exempt workers and carriers subject to the Interstate Commerce Act.
Accrual, Carryover and Frontloading of Sick Leave
Employers must permit employees to accrue paid sick leave at a rate of one sick leave hour for every 40 hours worked. Additionally, employees must be permitted to carry over at least 40 hours of unused, accrued leave to the next year. Employers can satisfy the law’s accrual and carryover requirements by awarding sick leave hours in advance, provided that such frontloading meets or exceeds the Law’s requirements for accrual, use and carryover.
Paid Sick Leave Usage
Leave can be used for any of the following reasons:
- The employee, or the employee’s family member is ill, injured, or is receiving medical care, treatment, diagnosis or preventative medical care;
- Closure of the employee’s place of business and/or the employee’s child’s school or place of care due to order of a public official for any health-related reason;
- Absences that qualify for leave under Washington’s Domestic Violence Leave Act, Chapter 49.76 RCW
An employee may use accrued leave on the 90th calendar day after the commencement of his or her employment. An employer must permit employees to use their accrued leave in hourly increments. For each hour of leave used, an employee must be paid the greater of the minimum hourly wage or his or her normal hourly compensation.
Paid Sick Leave Requests and Certification
Employers may 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.
For absences of more than three days, an employer may require that an employee provide verification that their use of paid sick leave is for an authorized purpose. The employer may further require that the verification be provided within a reasonable time period during or after the leave. However, an employer’s requirements for verification may not result in an unreasonable burden or expense on the employee and may not exceed privacy or verification requirements otherwise established by law.
An employer may not require, as a condition of an employee taking paid sick leave, that the employee search for or find a replacement worker to cover the hours during which the employee is using paid sick leave.
Employers must provide regular notification to employees about the amount of paid sick leave available to each employee.
Separation from Employment and Rehire
Employers are not required to provide financial or other reimbursement for accrued and unused paid sick leave to any employee when a separation of employment occurs. However, if an employer rehires a separated employee within 12 months of separation, whether at the same or a different business location, all leave that the employee had accrued at the time of his or her separation must be reinstated, and the previous period of the employee’s employment shall be counted for purposes of determining the employee’s eligibility to use paid sick leave.
Prohibitions & Enforcement
Employers are prohibited from adopting or enforcing any policy that counts paid sick leave absences as absences that may lead to or result in discipline against the employee. Additionally, employers may not discriminate or retaliate against an employee for his or her exercise of any rights provided under the Law, including the use of paid sick leave.
The Law requires the Washington State Department of Labor and Industries to adopt and implement rules to carry out and enforce the provisions of the Law, including but not limited to:
- Procedures for notifying employees about available paid sick leave;
- Protecting employees from retaliation for the lawful use of sick leave;
- Exercising other rights provided by the Law.
Amendments to Spokane Sick and Safe Leave Ordinance
The amended Ordinance includes a “sunset” provision after which the law will no longer be effective. In particular, the law will be effective until December 31, 2017, or until the implementation the Washington state mandatory paid sick leave law, whichever occurs last.
Covered Employers and Employees
While the original law applied to all employers in the City of Spokane, the amended Ordinance limits coverage to employers that have a permanent location in the City of Spokane and at least one employee working in Spokane. All employees who work in the City of Spokane are covered, except for “occasional employees” who work fewer than 240 hours per year in Spokane.
Under the amendments, the employer can determine the benefit year, as long as it is a “fixed consecutive twelve-month period established by the employer and used in the ordinary course of the employer’s business for the purpose of calculating wages and benefits.”
Accrual, Carryover and Frontloading of Sick Leave
Under the Ordinance, employees accrue at the rate of one hour of sick leave for every hour worked up to a maximum bank of either 24 hours (for employers with less than 10 employees who work in Spokane), or 40 hours (for employers with 10 or more employees who work in Spokane). In other words, employees accrue sick leave until they reach 24 or 40 hours, at which point they stop accruing more sick time until they use some of that time.
The original law did not address accrual of sick leave for exempt employees, but the amended Ordinance requires accrual of sick leave for exempt employees based on a 40-hour workweek, or the employee’s normal workweek if it is less than 40 hours. No accrual is required for hours worked beyond a 40-hour workweek.
Employers may also limit use of sick leave to 24 or 40 hours in a year, depending on the number of employees working in Spokane. While the original law required all employers to carry over 24 hours of sick leave for each employee into the next year, the amendment requires carry-over of 24 or 40 hours (again depending on the size of the employer).
Finally, employers can comply by front-loading leave hours (24 or 40 hours depending on the size of the employer) at the beginning of each year.
Earned Sick Leave Usage
The amendment specifies that the minimum increment for using earned sick leave is one hour.
Earned Sick Leave Requests
The amended Ordinance requires earned sick and safe leave to be provided upon the employee’s request. The employee’s request should include a reasonable estimate of the expected length of the absence “whenever possible.”
The original law required employers to provide notice to employees about the accrual of sick leave (including the leave balance and amount of leave used) on a quarterly basis. The amended Ordinance requires this notice to be provided each time wages are paid.
Under the amendments, an employer’s failure to maintain the required records will create a rebuttable presumption of a violation.
The Ordinance codifies the enforcement procedures to be followed by the City of Spokane Contract and Business Standards Compliance Office for receiving charges, investigating, and making determinations regarding alleged violations.
From January 1, 2017 to December 31, 2017, the enforcement posture will include informing employers and employees of their rights and obligations under this chapter and providing technical assistance to increase compliance.
Should you have any questions, please contact your HR Ideas Representative.