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Minimum Wage and Paid Leave Laws Affect Washington State Cannabis Businesses

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New cannabis businesses face a myriad of challenges. The state of Washington’s fragmented and expanding approach to minimum wage and paid leave is only becoming more difficult. Law and legislation in this area already impacts cannabis businesses in Seattle, Tacoma and Spokane, and may soon affect all cannabis businesses statewide.

As of this update written on March 7, 2016, the Legislature appears unlikely to pass a measure that addresses statewide minimum wage or paid sick and safe leave. These issues are, however, far from over. On March 5, labor-backed Raise Up Washington kicked off its campaign to qualify Initiative Measure No. 1433 for the November 2016 ballot. Now is a good time to take stock of your existing local paid leave obligations and consider the paid leave and minimum wage requirements that would be imposed statewide if I-1433 were approved.

The laws differ in a number of important ways – including accrual rate, accrual caps, use caps, carry over, minimum increments of leave, the benefit “year,” treatment of “occasional” employees, exemptions of certain employees, rehire requirements, and applicability to bereavement leave. Uniformity across more than one location is challenging.

In December 2015, Seattle significantly amended all of its labor standards ordinances, including paid sick and safe leave. These amendments strengthen penalties, allow civil suits by employees, and establish a rebuttable presumption that an adverse action within 90 days of an employee exercising his or her rights is retaliation.

If you have employees who work in Seattle only occasionally, the rules for “occasional basis” employees have also changed. If such employees work 240 hours in Seattle during a benefit year, they will now accrue paid leave for those first 240 hours as well as for future Seattle hours. They will also now be considered covered by Seattle paid leave for the duration of their future employment.

If your payroll system allows for leave to be accounted for in 15-minute increments, you must do so for non-exempt employees who use paid leave, which may also require reevaluation of the minimum increment used to track FMLA leave.

Seattle employers may now choose any 12-month benefit year to administer paid leave, not just the calendar year. The amendments impose a number of other administrative requirements, including keeping paid leave records for three years and providing a written policy notice to employees by April 1, 2016. If you are a Seattle employer you should review your policies and practices in light of these amendments.

Initiative 1433, if ballot qualified and approved in November, would not supersede these local rules (unless they are less favorable to employees) and would not, therefore, bring statewide uniformity. It would, however, create minimum statewide paid sick and safe leave while increasing the minimum wage to $13.50 by 2020.

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