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A new horizon for Washington’s minimum wage

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On Nov. 8, Washington voters passed Initiative 1433, which set, among other things, a new minimum wage for Washington employees of $11 per hour effective Jan. 1, 2017. 

The Initiative applies to all employers in the state of Washington regardless of size. Technically, the election results are unofficial until officially certified on Nov. 29. However, to meet the publication deadlines for this article, we are anticipating the results will be certified and Washington employers will need to start preparing to implement the new minimum wage.

There is also the possibility the Initiative will be legally challenged, which could preclude or delay implementation. Thus, while you should start preparing to pay the new minimum wage, at the same time you should be alert for any potential legal challenges.

The Washington State Department of Labor and Industries (L&I) will be issuing implementation guidance after the election results are certified. 

You can get immediate updates from L&I by signing up for their Wage and Hour List Serv. Go to www.Ini.wa.gov/Main/WorkplaceRights/default and click on the list serv link to sign up for email updates. With the coming holidays, employers are going to have a very short window of time to be in compliance by Jan. 1. 

The initial guidance from L&I on Nov. 17 indicates that L&I expects the Initiative to be certified on Nov. 29 and that employers will be expected to raise the minimum wage to $11 per hour on Jan. 1, with no grace period for implementation.

Assuming the Initiative election results are certified and that the Initiative is not successfully challenged in the courts, employers should be aware of other several other aspects of the Initiative.

In addition to the minimum wage increasing to $11 per hour on Jan.1, it is also scheduled to increase to $11.50 per hour on Jan. 1, 2018, to $12 per hour on Jan. 1, 2019, and then to $13.50 per hour on Jan. 1, 2020. Increases beginning in January 2021 will be adjusted annually in accordance with the consumer price index.

The Initiative stipulates these rules will apply to employees 18 years and older; however, in a call to L&I, the representative indicated the department intended to be consistent with current law and apply the minimum wage to employees 16 years old and older.

Restaurant owners and other service-based industries where gratuities are common should take particular note of the changes wrought by Initiative 1433. Under the initiative, employers must pay their employees all tips and gratuities and all services charges as further defined in RCW 46.49.160. 

All tips and service charges generated are to be paid in addition to the minimum wage and cannot be used to reduce an employer’s obligation to pay an employee the new minimum wage.

Additionally, the initiative provides that all employers, regardless of size, beginning Jan. 1, 2018, must allow employees to accrue at least one (1) hour of paid sick leave for every forty (40) hours worked by each employee. 

The initiative sets out a broad list of reasons that an employee can use the paid sick leave for qualifying absences. The employee is entitled to use the accrued sick leave beginning on the 90th day of employment.

The Initiative also provides extensive rules on the use, carryover and payment for accrued sick, which are beyond the scope of this article. If the initiative is certified and remains good law, we will provide future articles on the requirements of the new law as the state implements rules and issues guidance on compliance.

To hear more about these changes to the wage and hour laws in addition to the myriad changes in Employment Law over the past year, join Gil and Erin at the Apple Valley Human Resources Association’s annual Employment Law Summit on Dec. 8. To register for the event, please go to http://avhra.shrm.org/events/2016/12/employment-law-summit.

Gil Sparks is Of-Counsel for Ogden Murphy Wallace, and has over 28 years representing employers on employment and labor law matters. Additionally, he has over 16 years senior human resources experience and is certified as a Senior Professional in Human Resources. Erin McCool is an attorney with Ogden Murphy Wallace practicing in the areas of litigation, employment & labor law, and land use & water. She provides advice and consultation to local businesses, employers, and municipalities regarding state and federal wage and hour laws.