Restrictive Scheduling, Independent Contractor Bills Dead for Year

NFIB also succeeds at amending bad-for-small-business bills to make them less onerous

State Director Patrick Connor reports from Olympia on legislative activities up to March 5

Week 7 marked the deadline for bills with a cost of $50,000 or more to be approved by a budget-writing committee. This fiscal cut-off brought to 39 the number of bills we were tracking that are now likely dead for the year. We say “likely dead” since bills included in either chamber’s forthcoming budget proposal are deemed “necessary to implement the budget” (NTIB), and are thus exempt from the deadlines.

Victories

Several bills NFIB opposed died as a result of recent committee deadlines. Others were amended, affecting our position on the legislation.

Independent contractor bills. As we reported last week, the “Universal Worker Protections Act,” companions House Bill 1601 and Senate Bill 5690 are dead. So, too, is Senate Bill 5513, the “Employee Fair Classification Act,” which sought to classify more independent contractors and self-employed sole proprietors as someone else’s employees. It’s House counterpart, House Bill 1515, has been watered down to a task force; however, NFIB still opposes the bill since there’s no guarantee actual independent contractors or other self-employed individuals or their representatives will be appointed to the panel. With the Association of Washington Business (AWB) selecting employer representatives, we’re more likely to see Uber, Amazon, Microsoft, and large construction contractors – the very same organizations whose use of “independent contractors” is largely responsible for raising Labor’s ire and these bills being introduced – tabbed for the negotiating team. Thousands of hair stylists and barbers, whose amazing, organic, grassroots efforts took the legislature by surprise, defeated these bills. Let’s hope AWB appoints some of them to the HB 1515 task force.

Restrictive scheduling. More surprising was the demise of House Bill 1491 and Senate Bill 5717, companion bills seeking to require certain employers, primarily larger restaurants, hotels, and retailers, to provide two week’s advance notice of work schedules, and pay penalties for shift changes once the schedules are posted. The House Labor Committee amended its version, raising the threshold to employers in those industries with 250 or more workers, and excluding all but the nine most populous counties in the state. Those amendments likely sank the House vehicle. Both bills died in their respective fiscal committee.

Working families tax rebate. Washington state already has a “Working Families Tax Exemption Program” on its books that would send checks to lower-income households based on an assumed level of purchases subject to sales tax. The goal is to reduce the regressivity of that tax. However, the program has never been funded. House Bill 1527 and Senate Bill 5810 would rename the program the “Working Families Tax Credit,” and greatly expand the number of eligible residents and significantly increase the amount of money recipients would receive from the state treasury.

Amendments

NFIB secured amendments to several bills already this session allowing us to move from opposed to neutral, or even to support in some cases.

HB 1059, B&O Annual Return Filing Deadline – We, along with AWB and the retail association, reached agreement with the Association of Washington Cities on an amendment delaying the effective date of a proposed B&O deadline change for annual filers. NFIB supports the bill.

HB 1696 and SB 5090, Wage and Salary History – While not officially companions, these bills are near identical in language and effect. NFIB secured amendments to each, eliminating penalty clauses that would have subjected employers to double-jeopardy of both administrative and judicial investigation and sanctions for the same alleged offense. We are now neutral on the bills, but prefer the House version, since it eliminates the administrative remedy and corresponding diversion of workers’ compensation trust funds to pay for it.

HB 1930, Breast Pumping Accommodation – NFIB convinced the bill sponsor to remove the requirement of providing a private area for workers to pump breastmilk if the office, job shack, or other workplace does not have a separate area or space to do so. Instead, employers would be directed to work with employees to identify other suitable arrangements. The requirement applies to businesses with 15 or more employees. NFIB is neutral on the bill.

HB 2117, Tax Structure Task Force – The bill sponsor agreed to clarify that the mandatory stakeholders include in-state startup and low-margin small businesses. The original language could have been construed to give preference to large national (or multinational) retail and grocery chains. NFIB supports the bill, which would establish a four-year process to thoroughly review the state’s tax structure and suggest changes to modernize it. We pointed out in testimony that the dreaded B&O tax was enacted as a temporary revenue measure in the wake of the Great Depression, some 84 years ago. It’s time to look at alternatives to this gross receipts tax.

SB 5526, Standard Benefit Design Health Plans – SB 5526, and companion HB 1523, would direct the state Health Benefit Exchange to require insurers to offer “standard benefit design plans” that shift a portion of cost-sharing, like deductibles, co-payments, and co-insurance, into the monthly premium of a health insurance policy. This would help individuals and families with members having costly medical treatment or pharmaceutical needs. The bills, as introduced, would replace traditional health plans with these standard plans in the Exchange. We’ve explained that while standard benefit plans should be added to the market, not every person or family needs a standard benefit plan. More choices, not fewer, should be available to consumers. NFIB’s testimony led to an amendment in the Senate bill that would allow traditional health plans to continue being offered in the Exchange past 2024. NFIB supports SB 5526, but remains concerned about HB 1523. The House bill would still eliminate traditional health plans in the Exchange by 2025, if enacted.

Small Business Bill of Rights

HB 2093, NFIB’s Small Business Bill of Rights, prime sponsored by former Leadership Council member Rep. Andrew Barkis and Rep. Mike Chapman, drew an impressive 39 co-sponsors, including 11 Democrats. The bill is scheduled for a public hearing March 7 in the House State Government & Tribal Relations Committee. However, since the bill was not approved by committee prior to the policy cut-off, this hearing appears to be a courtesy extended by Rep. Mia Gregerson, the committee chairwoman, to the bill sponsors. It is possible, but unlikely, the bill could appear in the House budget, making it NTIB, but that is more wishful thinking than a realistic expectation.

The companion, SB 5948, died without a vote in the Senate Ways & Means Committee. The bill was heard and scheduled for executive session on Friday, March 1, the fiscal cut-off. Despite weeks of negotiations, state agencies continued to raise new concerns. The Department of Revenue released an eye-popping $2.2 million over four years fiscal note. Amendments were made in policy committee to cut that number in half. Additional amendments proposed to the Ways & Means Committee should have all but eliminated the rest of the hypothetical costs. The same was true for most other agencies that had submitted a fiscal note in advance of Friday’s hearing. We even met with the Department of Social and Health Services (DSHS) between the public hearing and executive session to resolve concerns they raised with the bill. DSHS was poised to produce a $4 million fiscal note, but most of the agency’s objections appeared based on interpretations of the bill that differed from ours. We’re told NFIB member and prime sponsor Sen. Guy Palumbo made an impassioned argument to his fellow committee Democrats during their closed-door caucus urging them to keep the bill moving, so negotiations could be finalized. While the bill was not approved, Senator Palumbo received assurances from his caucus to move a bill next year. Our lead co-sponsor, and former Leadership Council member, Sen. Lynda Wilson was a tremendous help as well. She is the lead Republican on the Senate Financial Institutions, Economic Development & Trade Committee, which first heard and approved the bill, and is a member of the Senate Ways & Means Committee. Finally, a special thank you is owed to Sen. Christine Rolfes, Ways & Means Committee chairwoman, who co-sponsored the bill and scheduled it for both public hearing and possible executive action Friday.

Gov. Jay Inslee’s office contacted us Monday, again offering to continue working with us over the interim to develop some version of a Small Business Bill of Rights. We appreciate their ongoing efforts to reach consensus with us and the 27 agencies with licensing, registration, or other enforcement power over small businesses.

Tax and Fiscal

NFIB testified in support of HB 1059 to extend the B&O deadline for filing annual returns to April 15, as discussed above.

We testified twice this week in support of HB 2117, establishing a legislative task force to review the state’s outdated tax system. Our nearly 85-year-old gross receipts tax was first enacted as a stop-gap revenue measure in the wake of the Great Depression. It’s time to explore meaningful tax modernization efforts in our state.

We testified against SB 5066 and SJR 8201, allowing school district property tax levies to pass with a simple majority of the vote. Current law requires a 60 percent vote to approve these levies. Not all voters are property owners, and many small-business owners live in a different school district than where their business is located. The 60 percent requirement helps protect property owners from higher taxes imposed by others who may never pay the tax. SJR 8201 authorizes a vote on the constitutional amendment that would be required to make this change.

NFIB also went on record opposing the transportation funding proposal, SB 5971. It includes a carbon tax, low-carbon fuel standard, and six-cent per gallon gas tax increase, as well as raising vehicle weight fees and other assessments.

Labor

We again showed our opposition to HB 1395, making general contractors liable for the wage and benefit payments owed to workers by sub-contractors. The state’s Wage Payment Act already has a mechanism to resolve these claims. This bill would further complicate and confuse the process.

NFIB is also opposed to HB 1514, allowing wage liens on real and personal property, for the same reasons as HB 1395. Moreover, wage liens could cloud title to property or equipment an employer may need to liquidate to pay these claims.

As described above, we won an amendment to HB 1696, prohibiting employer inquiries about wage and salary history, by testifying against it in the House Appropriations Committee. We are now neutral on the bill.

We are again on record opposing HB 1965, allowing bounty-hunting trial attorneys to file suit on behalf of workers alleging workplace violations even when the agency with enforcement power has declined to take action. These are called “qui tam” lawsuits.

Environment

* We are again on record opposing HB 1205, banning plastic bags, this time before House Appropriations.

Health Care

We testified before the House Appropriations Committee about our concerns with HB 1523, making all health insurance plans in the state’s Health Benefit Exchange standard benefit design plans. We support adding these plans to the exchange, but oppose eliminating traditional health insurance policies as this bill envisions. Instead, we support the companion, SB 5526, which would allow both plan types to be sold in the Exchange. We signed in supporting SB 5526 at the Senate Ways & Means Committee.

We showed our support of HB 1776 and SB 5741, moving oversight of the state’s All-Payer Claims Database from the Office of Financial Management to the Health Care Authority. Both bills were heard in their respective fiscal committees this week.