Week Three of the session leaves plenty of small-business challenges on a variety of issues
State Director Patrick Connor reports from Olympia on the legislative week ending February 1.
Week 3 of the 2019 legislative session saw the most impressive display of organic, grassroots mobilization in recent memory. More than 1,400 cosmetologists and barbers were at the Capitol Monday to oppose Senate Bill 5326.
The bill initially would have banned booth rentals, a common industry practice where multiple stylists, each a sole proprietor, rent or lease space in a salon. The bill also sought to require them to buy unemployment and workers’ compensation insurance from the state. Already facing substantial public and media outcry, Sen. Karen Keiser, the bill sponsor and committee chairwoman, announced before Monday’s hearing that she was jettisoning the booth-ban provision and broadening the scope to include barbers. The stylists were unimpressed.
Thanks to this massive turnout, which filled every Senate hearing room and both Senate galleries, impassioned testimony, and hundreds of follow-up phone calls and emails to legislators, Senator Keiser announced Thursday that she was pulling the bill from consideration. This was a tremendous win, particularly since it resulted from word-of-mouth and social media outreach from stylist to stylist.
In addition to SB 5326, hundreds of stylists also expressed their opposition Monday to House Bill 1515, which would restrict the ability of independent contractors to do business in Washington state. NFIB will publish a more detailed look at this and several related bills in a separate article. This group doesn’t appear to be going away anytime soon, in fact it looks like they may be formalizing their status with a new trade association of their own.
NFIB chronicled some of the day’s events on its Facebook and Twitter pages and provided updates during the week through social media channels as well. State Director Patrick Connor appeared on John Carlson’s KVI morning radio program Monday to explain the bills and their potential harm, and Tuesday to recount the previous day’s activities.
NFIB made its position known on several other issues of importance to small business owners this week.
Taxes
- NFIB testified in support of SB 5541, which would establish a state revenue reform task force. This allowed NFIB to repeat its objections to Gov. Jay Inslee’s proposed 67 percent B&O tax hike on services, as well as reiterate its long-standing opposition to a state income tax. Curiously, AWB testified against the bill, claiming “… our tax structure, in large measure, is working for Washington …” based on revenue growth. The bill sponsor has asked staff to draft NFIB’s proposed amendment that would permit both large and small businesses to be represented on the task force’s advisory panel.
- NFIB also testified in opposition to SB 5619, which would exempt most startups from the B&O tax for the first two years of operation, and provide a 50 percent B&O reduction if the enterprise has fewer than 25 employees in the third year. NFIB’s opposition was based on our latest state ballot where 70 percent of members responding favor reducing or eliminating tax preferences in exchange for lower overall B&O rates, as well as an older ballot where members rejected allowing a B&O exemption for new businesses. Interestingly, the chairman and ranking member of the committee hearing the bill are both NFIB members.
Labor
- NFIB went on record opposing SB 5326 and HB 1515 described above. It also objected to SB 5513, the companion to HB 1515.
- NFIB also opposed HB 1395, making general contractors directly liable for a subcontractor’s failure to pay wages and benefits.
- NFIB opposed HB 1445, a bill that would allow a worker to quit and still receive unemployment benefits if a shift or schedule change makes family- or childcare “inaccessible,” or if they were denied a shift or schedule change request and that denial makes care inaccessible. The bill would take effect after workers are eligible for 12 weeks of Paid Family and Medical Leave, making the bill all but unnecessary.
- NFIB also opposed HB 1450 and SB 5478, prohibiting noncompete agreements longer than 18 months, restricting their use to employees making more than three times the state annual average wage ($185,700 in 2017) or independent contractors earning nearly a quarter million dollars annually from other sources, requiring a laid-off employee subject to a non-compete agreement be paid their full base salary less any earnings from another job during the full term of the agreement, and barring agreements that prohibit franchisees from poaching employees from their franchisor or other franchisees.
- NFIB opposed SB 5295, which would allow the use of “card check” to unionize adult care, behavioral health, disability support, or youth services workers employed by businesses contracting with the state Department of Social & Health Services.
- NFIB participated in Sen. Keiser’s first negotiation session between employers, labor and trial attorneys, on her/their bill to change workers’ compensation wage calculations, and set wage-replacement at 70 percent when awarding an injured worker time-loss benefits.
- We did support two L&I request bills this week: HB 1486, allowing the department to contract for inspection services on factory assembled structures, and HB 1487, allowing homeowners to remove chairlifts from their residence without a permit.
Environment
- NFIB is on record opposing HB 1257, which would allow local jurisdictions to adopt a patchwork of local energy codes more restrictive than the state code. It would also require electric car charging stations at every new building.
- We are again on record opposing the governor’s proposed Low-Carbon Fuel Standard, this time in the form of SB 4212.
Health Care
- NFIB testified about its concerns with HB 1523, the governor’s proposed “public option” health plan for the Exchange. The bill does NOT create a state-run health system. Instead, it would phase-in standard benefit design health insurance plans that shift a portion of cost-sharing (deductibles, co-insurance, co-payments) into the monthly premium. These plans make sense for individuals and families who have a member with a chronic, high-cost condition like diabetes, cancer, blood disorders, autoimmune diseases, etc. NFIB noted its support for inclusion of standard benefits plans in the Exchange, but explained that not every plan should be a standard benefit plan – not all Exchange enrollees need that particular plan design. NFIB also cited other concerns with specific bill language. The governor’s health policy advisor indicated a willingness to make changes if that would lead to NFIB supporting the bill. NFIB will have further discussions with the governor’s office and bill sponsors, but will not support legislation limiting the Exchange to one plan design choice for all enrollees.
- NFIB is also continuing its negotiations with advocates of HB 1087 and SB 5331, establishing the long-term services trust. Most of our requested changes were made in the versions approved by House and Senate health care committees. More amendments are forthcoming when the bills are heard in the House Appropriations Committee and Senate Ways & Means Committee respectively. Advocates are anxious to win NFIB’s endorsement of the bills and claim AWB will support them during the fiscal committee hearings. It is hard to imagine NFIB backing a payroll tax to establish a new benefit program, even one with the projected state budget cost-savings these claim to offer.
Small Business Day at the Capitol
Attention NFIB Members—If you haven’t yet registered for our February 7 Small Business Day at the Capital, you can do so here. In addition to the speakers we’ve previously announced, we’re pleased that House Minority Floor Leader Rep. Jacquelin Maycumber has joined our terrific line up! Space is limited, so register now.
Members will have the chance to discuss the issues in this report and other legislative priorities with key legislators and the governor’s staff during next week’s Small Business Day. Speaking of which, weather forecasts are calling for snow next Thursday through the weekend. Be prepared and travel safely!
Previous Reports From the State Capitol
January 25—Latest Bill Draft Still a Tangled Mess for Hairstylists
January 18—NFIB Plunges Into Thick of Legislative Action
January 11—Washington State Legislature Opens for Business
