Washington Business 2017 AWBI Small Business Report | Page 8

Minimum Wage : Initiative 1433 was passed by voters in the November 2016 election . The initiative increased minimum wage to $ 13.50 per hour by 2020 ( 4 years ) for anyone 18 and over . The wage increase applies to all employers in Washington state .

The minimum wage will increase as follows :

Starting in January 2021 , the minimum wage will be adjusted up according to the consumer price index ( CPI ). The CPI adjustment is consistent with the current law .

What does regulatory reform look like to you ?

“ The combination of wages and sale tax discounts on purchasing out of state makes doing business in Washington questionable .”

— Pullman Business Owner

Paid Sick Leave : An additional component to I-1433 requires employers to pay sick leave at a rate of one hour for every 40 hours worked , beginning in January 2018 . The initiative requires that an employer allow an employee to carry over a minimum of 40 hours per year of unused sick leave and does not contain a cap on how much sick leave can be earned in a year .

I-1433 will have a severe impact on small business in Washington state . It fails to provide any teen wage , training wage , or recognition of the additional cost , beyond wages , that employers pay . While it does apply statewide , it does not prevent local jurisdictions from setting a more stringent rate as Seattle and SeaTac have already done . The patchwork of different wages will continue .

Washington ’ s manufacturing sector , which includes several small firms , will be particularly hard hit by this arbitrary increase . Manufacturers compete globally and must price their products and services accordingly . We have seen manufacturers decide to not expand or move out-of-state to remain competitive .

Further , Washington businesses that border Idaho are competing with the federal minimum wage of $ 7.25 per hour . This hurts the small-business owner who cannot absorb the higher coast for labor . As employers are required to provide a higher minimum wage , they are driven to cut other benefits to survive . The increase will also result in wage compression . Those who have worked hard and received wage increases are now earning the same as those who are newly hired .