Call to Action--Member Help Needed Now

Date: March 30, 2015

UPDATE: The $12 minimum wage, paid leave mandate, and “equal pay” bills described below died in the Senate Commerce & Labor Committee at the April 1 policy committee cut-off. NFIB/Washington thanks committee chair Sen. Michael Baumgartner and the Majority Coalition Caucus for protecting small business by defeating these bills.

The House of Representatives will debate its budget bill on April 2. As described below, the bill relies on roughly $1.5 billion in new or increased taxes, including a 20 percent surcharge on the B&O tax on services, increasing that rate to 1.8 percent of gross earnings. The bill is expected to pass the House on a party-line vote.

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Can you afford a $12 minimum wage, a paid leave mandate, or a 20 percent B&O tax increase?  
The Legislature thinks you can.
On March 30, Senate and House committees started considering several issues crucial to your operations as a small-business owner.  
Please make your voice heard by calling lawmakers at 800-562-6000, or by sending them an email at the addresses below.
$12 Minimum Wage, Paid Sick & Save Leave Mandate, Equal Pay Act
Senate Republicans, yes Republicans, are considering boosting Washington’s already highest-in-the-nation minimum wage to $12 per hour over four years.  They’re afraid if the Legislature doesn’t pass a wage hike this year, Nick Hanauer and his union allies will make good on their threat to run a “$16 in ‘16” minimum wage initiative during the 2016 election that will harm the Republicans’ chances of maintaining control of the Senate.
Senators, particularly the Republican Majority, need to hear from you about how these bills will impact your small business. Call or email these senators directly:
  • Sen. Mark Schoesler, Republican Majority Leader, [email protected], 360-786-7620 direct
  • Sen. Michael Baumgartner, Senate Commerce & Labor Committee chairman, [email protected], (360) 786-7610 direct
The Senate Commerce & Labor Committee has begun hearing these priority bills:
  • House Bill 1355 – $12 minimum wage phased in over four years:  $10 in 2016, $10.50 in 2017, $11 in 2018, and $12 in 2019. The minimum wage would again increase with inflation beginning in 2020. The NFIB Research Foundation’s economic analysis shows as many as 16,000 jobs could be lost over a ten-year period, with 60 percent of those losses occurring in small businesses. Retail stores and restaurants would be hardest hit.
  • House Bill 1356 – Mandatory paid sick and safe leave: Basically, employers with four to 49 workers must allow 40 hours of paid leave, those with 50 to 249 workers must allow 56 hours paid leave, and employers with 250 or more workers must allow 72 hours of paid leave annually. Workers can bank unused leave to use the following year along. Detailed record-keeping is required and employers can be sued by workers, the Dept. of Labor and Industries, unions, or other organizations “acting on behalf of the public health and welfare” for alleged violations of these leave requirements.
  • House Bill 1646 – Equal Pay Act: The bill seeks to update existing law by prohibiting employers from “providing less favorable employment opportunities based on gender.” In reality, the bill expands the opportunities to sue employers, imposing a $5,000 minimum penalty plus attorney and court costs. NFIB supported a compromise in the House that the Democrat sponsor rejected at the last minute, demanding triple damages in lawsuits, rather than double damages. NFIB and others in the business community are again seeking a compromise that protects workers while limiting nuisance lawsuits.
The restaurant association and the state’s chamber of commerce are pushing Republicans to agree to a “grand compromise” to increase the minimum wage to $12 per hour in exchange for a tip credit, statewide preemption of local wage and benefit ordinances (like the Seattle and Seatac $15 minimum wage and mandatory leave laws, which would be grandfathered in), and some type of training wage.  They hope this “less bad” alternative will protect against a “$16 in ‘16” initiative during the next election.
Can your small business afford a “deal” like this?
20 Percent B&O Tax Increase on Services
Over in the House, the Appropriations Committee started holding public hearings on House Bill 1106, its budget proposal. That budget relies on nearly $1.5 billion in tax increases, including a 20-percent surcharge on the B&O services tax rate, taking it back up to 1.8 percent of your gross earnings. That surcharge affects more than 144,000 businesses in our state. On March 31, the House Finance Committee will consider the tax bill, House Bill 2224.  
Contact these committee chairs, tell them what a 20 percent increase in the B&O rate for services would cost your firm:

  • Rep. Ross Hunter, House Appropriations Committee chairman, [email protected], 360-786-7936 direct
In addition to the B&O service tax increase, the tax package also:

  • Imposes a 5 percent capital gains tax
  • Reinstates the 0.3 percent business and occupation (B&O) surtax on service businesses
  • Increases the small business credit for service businesses
  • Eliminates the preferential B&O tax rate of 0.275 percent for travel agents and tour operators
  • Eliminates the preferential B&O tax rate of 0.138 percent for resellers of prescription drugs
  • Repeals the sales and use tax exemption for bottled water
  • Changes the nonresident sales and use tax exemption for tangible personal property into remittance program
  • Narrows the use tax exemption for extracted fuel
  • Eliminates the preferential B&O tax rate of 0.484 percent for royalty income
  • Authorizes additional methods of establishing nexus for purposes of business and occupation and sales taxes
  • Limits the availability of a real estate foreclosure exemption.

Related Content: Small Business News | Washington

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