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Seattle looks at fee on businesses to fund minimum wage and labor law enforcement

The office responsible for enforcing Seattle’s expanding labor laws needs $6 million in 2017 to cover its operations. On Wednesday, Seattle City Council members will be considering a new fee on businesses to fund it.

Under a proposal by City Council member Lisa Herbold, the city would levy a new annual fee on businesses specifically for funding the Office of Labor Standards — currently paid for through the city’s general fund. City Council’s District 3 rep Kshama Sawant and others have repeatedly called for OLS to receive more funding to better enforce and educate the public on Seattle’s minimum wage law.

Under the proposal, the fee would be applied to businesses with five or more employees. In order to generate the office’s estimated $6 million operating budget in 2017, the city would need to levy a fee of $22.47 per employee. City Council staff drew up three possible scenarios for how to spread out those costs among the businesses.

Two options would divide businesses into three tiers and levy the same fee across the tier.Screen Shot 2016-06-13 at 5.29.43 PMScreen Shot 2016-06-13 at 5.29.54 PM

A third option would consider the number of employees at each individual business.

Screen Shot 2016-06-13 at 5.30.13 PM

Members of the Civil Rights, Utilities, Economic Development, and Arts Committee will discuss the proposals Wednesday at 9:30 AM. City Council staff had drawn up four other options for raising the money, but they have since been sidelined:

  • Increase the Business License Fee (BLF) from $55 to $95 per year on businesses with gross incomes of $20,000 or less, and from $110 to $190 per year for businesses earning more than that — a 70% increase in the fee.
  • Increase the Business and Occupation (B&O) Tax by 2.1%.
  • Create an employee-hours tax at an annual rate of $16.50/full-time employee, or roughly $0.0086/employee-hour
  • Increase the Business License Fee by $0.01/employee-hour — the “head tax” ballot measure proposed by the Service Employees International Union.

The first two options have been complicated by Mayor Ed Murray’s plans to use those funding sources to expand the police department and Herbold wanted alternatives to the latter two options.

A 2015 study found that increased labor law education and enforcement was especially needed in Seattle’s restaurant industry. Among the most concerning findings: only 37% of restaurant workers were aware of the city’s paid sick leave law and 74% reported that they don’t have access to it. Nearly a third said they were concerned they would be fired be if they called in sick. Moreover, a fifth of those surveyed reported working off the clock without getting paid.

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7 years ago

Not that I was thinking about hiring employees again, but holy cow. So on top of all the extra costs, you get another if you have more than x number of employees in Seattle.

7 years ago

This is ridiculous. So you create a policy you cannot enforce correctly and then want to have the employers pay to help you enforce it?
Time to pull the rest of my employees out of the city.

7 years ago

They should just set the fines for violators high enough to cover the costs of enforcing this.