The Goldendale Sentinel - Headlines & History since 1879

By Max Erikson

Rising pay scale causes ripples


April 18, 2018

The start of 2018 brought big changes to worker laws in Washington State with the passage of the voter-approved Initiative 1433. Initiative 1433—passed in 2016—will steadily increase the minimum wage over the next two years and requires all businesses to provide paid sick leave to employees. The new law also addresses standards for the fair distribution of tips and service charges in the hospitality industries and gives protection to employees from retaliation by employers under the Labor Standards Act.

In January 2018, the minimum wage increased to $11.50 per hour and will increase again next year to $12 for 2019. In 2020, the minimum wage will jump up to $13.50. By 2021, the State will evaluate future minimum wage increases based on inflation and will be adjusted annually by the Washington State Department of Labor and Industries.

Employers will be facing a big challenge with the steady increase of the minimum wage and some will struggle to find ways to compensate employees and still turn a profit. For businesses in Goldendale, the impact of the new law has already forced them to make adjustments.

Dan McCredy, owner of the The McCredy Company in Goldendale, says that he has already had to cut the work hours of his current employees. That approach is becoming common in many businesses.

“Even if the increase in wages goes up, my budget for salaries stays the same,” McCredy says. “There is only a certain amount that I can pay, so they [employees] have to work less. There is only so much I can afford for labor.”

Klickitat Valley Health (KVH) Human Resources Director Charis Weis says KVH is already feeling the impact of the changes. KVH is in negotiations with the Service Employees International Union (SEIU), Local 1199 NW, which represents some KVH employees, in anticipation of the wage increases.

“It doesn’t just impact low wage earners when the minimum wage makes such a big jump,” Weis says. “We have to address the compression of salaries for all employees. If a less skilled worker gets a wage increase, we also have to consider a wage increase to our more skilled workers. And we are trying to find creative ways to do that.”

Compression is when wages between employees are similar regardless of experience, skill level, or seniority. Weis says adjustments need to be made to pay fair-Market value when the salary of an entry level, or less skilled worker, is comparable to more skilled workers.

“We recognize that this is an issue,” Weis says. “We are looking at Market data and compensation data, and we are comparing our efforts with what other hospitals our size are doing to address the issue of compression.”

Initiative 1433 also requires businesses to compensate employees with the accrual of one hour of paid sick leave for every 40 hours worked. For workers already in the labor force, that accrual started on January 1 of this year. For those just staring a job, accrual of sick-leave begins on the 90th calendar day of being hired. Employee sick leave can be used for more than just the individual’s health concerns. Sick leave can be used for the care of a family member, a health emergency, or if person is in a domestic violence situation that is recognized by the Domestic Violence Leave Act.

Additionally, Initiative 1433 requires employers to notify each employee in writing of their right to paid sick leave. Employers must also notify each employee monthly the amount of accrued sick leave, leave used since last notification, and available hours of sick leave. Including this information on the employee’s paystub is the most common way to comply with this requirement. Employers will need to track all accrued sick leave hours for their employees and report it to their current payroll record keeping system.

“At KVH, our paid time off (PTO) was all lumped into one accrual system and could be used as sick leave or vacation,” Weis says. “Now all employees must have 40 of those hours allotted for sick leave only, and for those workers who rarely call in sick, it limits their use of PTO.”


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