Five Key Things to Know About Washington’s New Sick Leave Law

By Larry Dickinson, PrimePay

In 2006, the City of San Francisco passed the first mandatory sick leave law in the country. Since then, many other states and municipalities have adopted similar statutes. In fact, 47 states and the District of Columbia have considered establishing such ordinances to help protect the wages of employees affected by illness, injury, or domestic violence.

1. Washington law—the basics

   In November 2016, voters in Washington state voted to establish a mandatory sick leave law for workers in their state. Starting in January of 2018, all employees covered under the Washington State Minimum Wage law must accrue one hour of paid sick leave for every 40 hours worked.

   This law applies to all employers, even if they only have one employee. The problem is that many large cities in Washington such as Seattle and Tacoma have also adopted their own sick leave measures, and these measures are not always in sync with the state law.

   What is the employer to do? We will attempt to highlight some of the differences between state law and those of the municipalities. Note that we are using Washington state as the example here; the same scenarios are playing out in other states around the nation.

2. Allowable uses of sick leave

   According to the Washington State Department of Labor & Industries, employees will be allowed to use sick leave for themselves or a family member for these reasons:

• To care for themselves or family members.
• When the employees’ workplace or their child’s school (or place of care) has been closed by a public official for health-related reasons.
• Absences that qualify under the Domestic Violence Leave Act.

Note that employers may allow employees to use paid sick leave for additional purposes.

Unlike the laws adopted in Tacoma and Spokane, the Washington state regulation does not cover bereavement due to the death of family members.

3. Family member definition

Washington allows the usage of paid sick leave for personal illness or injury as well as for family members defined below:

• Child
• Parent
• Spouse
• Grandparent
• Grandchild
• Sibling
• Registered domestic partner

The big difference here is that Washington state allows that the child relationship is enforced regardless of the age of the child, while the city regulations only cover children up to the age of 18.

4. Accrual of sick time

   In general, employees must earn a minimum of one hour of paid sick leave for every 40 hours worked. This covers all non-exempt employees covered by the Washington State Minimum Wage Law. There is currently no coverage for exempt workers, including white collar workers, outside salespeople or other professionals.

   In many of the local regulations, white collar workers are covered with the assumption of a flat 40-hour work week. Seattle law, as an example, covers all workers who work in the City of Seattle. While the new state law applies to all employers with even one employee, local laws can be applied differently depending on the size of the company. There is currently no cap on the number of hours earned each year by an employee. There is a cap on the number of hours that can carry over into the next year.

   Read a full list of FAQs.

5. What should your business do?

   In today’s business climate, employers are often confronted with conflicting city and state ordinances regarding sick leave accrual and usage. These laws and their differences can provide today’s small business owner with a nightmare.

   How do you apply different laws to different groups of employees with different job descriptions, working in different jurisdictions? An automated time and attendance system is a great option.

   PrimePay offers a variety of systems to meet any employer’s needs. These programs can define almost any type of accrual policy imaginable and apply those policies to different groups of employees based on geography, employee type, or job description. Let the professionals at PrimePay build a system that will keep you in compliance for years to come.

Learn more at primepay.com.

This article originally appeared on primepay.com.

By MBAKS Content Strategist James Slone

What happens when inclusionary zoning works against affordability? Just ask Seattle.

Like many urban areas in the United States, the Puget Sound region has become unaffordable for many new and existing residents, especially in Seattle, where high land value, lack of supply, cumbersome permitting, and restrictive zoning have sent prices skyrocketing.

One approach some U.S. cities have pursued to address affordability issues is inclusionary zoning (IZ). IZ policies utilize municipal or county planning ordinances to mandate that a given portion of new construction be affordable for low- to moderate-income households.

These mandated units are generally paid for with subsidies. For example, the builder can subsidize affordable housing by eating the building cost, or the government can subsidize it by providing an incentive to the builder in the form of an offset or by setting up an affordable housing fund.

MBAKS does not advocate for IZ policies, having long argued that the additional costs to the builder will ultimately be passed on to the new homeowner or renter, driving up the cost of market-rate housing. Despite these concerns, inclusionary zoning has become a popular approach in cities across the West Coast—including Los Angeles, Portland, and Auburn, Washington.

In 2006, Washington state passed House Bill 2984, opening the door for jurisdictions to “enact affordable housing incentive programs… for the development of low-income housing units.” This cleared the way for Seattle to pass its own IZ program, Mandatory Housing Affordability (MHA), in spring 2019.

The MHA imposed affordable housing requirements in 27 urban villages—neighborhoods across the city designated to absorb the bulk of Seattle’s population and job growth—with the goal of creating 6,000 homes affordable to households making 60% of area median income (AMI). The MHA is just one part of Seattle’s Housing Affordability and Living Agenda (HALA), which aims to create 20,000 affordable homes by 2025.

Overpromising and Underdelivering

In a 2007 report on inclusionary zoning by the Housing Partnership, the authors point out that IZ is politically attractive because it offers a one-size-fits-all solution to affordability with little up-front cost to voters. But it’s only a partial solution. Subsidies alone are insufficient to build enough housing for everyone, especially in hot markets and space-constrained cities.

Supporters of IZ say these policies can play a useful supplemental role provided they strike the right balance. But when poorly designed, IZ leads to fewer affordable homes. Take Portland. After establishing an IZ program in 2017, housing permits plummeted. By exempting projects with 20 or fewer units, they perversely incentivized smaller projects.

The result was a mind-bending 43% drop-off in new home permitting in 2020, with just 2,000 new units coming online. With so few new homes in the pipeline, Portland is underproducing the housing they need to meet demand.

Portland’s woes are a cautionary tale of what happens when an IZ program is designed without carefully considering how different types of housing may be affected or what kinds of builder incentives can balance out the cost of including affordable units.

Seattle’s own MHA is a case study of both the potential and pitfalls of IZ. Zoning requirements were lifted in all 27 urban villages with the proviso that developers either include affordable units in their own projects or pay in-lieu fees. (It’s worth noting here that the MHA only affects 6% of single-family zones, which still comprise about 75% of residential land in Seattle.)

If developers choose to provide the affordable units onsite, 2% to 11% of their projects’ square footage must meet the AMI criteria. Those who choose not to provide the units must pay a fee—ranging between $5.00 and $32.75 per square foot—to the Seattle Office of Housing’s affordable housing fund.

Thus far, the Urbanist has reported, “developers have overwhelmingly chosen the in-lieu fee option,” netting the program $68 million that could fund 850 affordable units. While these are considerable sums, the MHA’s one-size-fits-all design has discouraged certain types of more affordable “missing middle” housing by constraining supply and driving up costs.

The Trouble With Townhomes

A relatively affordable, market-rate family housing option, townhomes fill a vital niche in healthy housing markets. But the MHA’s square footage requirements and in-lieu fees have added significant costs to townhomes, making them less attractive to homebuilders.

In April 2019, 60 townhome projects were fast-tracked to beat the MHA deadline, a record number of permits in a single month. After the rush, townhome permits dropped to 33 per month. In October 2021, townhomes hit their nadir with just one application for the entire 31-day period.

The problem is that the majority of townhome projects average just three to four units. Because builders can’t subdivide square footage in a single unit, they have to round up to one or two AMI-restricted units to avoid the in-lieu fee—potentially half or more of their total units. The result is an effective 25–66% affordability requirement imposed on townhomes even though the MHA calls for just 2.1–11%.

Faced with this, builders end up paying the fee. According to a member survey conducted by MBAKS in 2021, the average fee per four-unit project is now $130,972, essentially doubling predevelopment costs. And because the fees are due early in development, construction loans won’t cover the added expense.

The MHA does provide development incentives like increased floor area ratio (FAR), modified density limits, or an extra story intended to offset MHA fees, but they don’t pencil out in practice. Townhomes usually have three floors and adding a fourth is a liability for both buyers and builders. An extra floor means higher square footage fees, stricter codes, and a four-story home buyers don’t want.

Because of all this, it’s now simply too expensive to build townhomes, and many developers have pulled back from initiating such projects. In 2018, townhome permit applications were set to accommodate 4,647 residents; in 2021, townhome projects had dropped to accommodating just 1,437.

It’s difficult to make housing more affordable when mandates and fees make it more expensive. As Alan Durning of the Sightline Institute put it, “The very notion of imposing fees on homebuilding to pay for affordable housing is facepalmingly wrongheaded.”

Escaping the Twilight Zone

A poorly designed inclusionary zoning program that doesn’t take all types of housing options into full consideration will not only fail to deliver significant affordable housing but will actively discourage the construction of proven housing types that more families can afford.

While MBAKS would prefer to exempt townhomes from MHA altogether, the association and other housing advocates have proposed a few reforms that could make a significant difference. These include allowing MHA fees to be paid in installments and letting builders of small infill projects pay fees only on floor area that exceeds pre-MHA FAR limits.

For MHA housing in general, there are incentive carrots that would balance out the stick of fees, including multifamily tax exemptions for MHA projects, a 50% waiver in costly off-street parking requirements, and opening the door to micro units that offer naturally affordable market-rate rents.

Of course, the real solution to our housing shortage is building a lot more homes. Most of the city is still restricted to single-family zones.

We must open the door to more housing types, lower construction hurdles like onerous permit timelines, and let homebuilders build. With significant zoning changes, Seattle could encourage more missing middle housing—such as townhomes, rowhouses, duplexes, and fourplexes—across the entire city.

Without incentivizing these housing options, inclusionary zoning will simply become exclusionary zoning by another name. We need a lot less stick, and a lot more carrot.

We encourage you to invite your staff, subcontractors, homeowner clients, as well as friends and business partners to enjoy the evening with you. We especially encourage you to make sure your T-REX recipients attend. This is an opportunity for all to show their appreciation and support for the exceptional group of remodelers who are part of the oldest Remodelers Council in the nation.

I look forward to celebrating with you on May 13!

Your 2017 REX/T-REX Chair,

Luellen Smith
Rhino Wine Cellars & Cooling Systems