WA Policy Center: WA State Supreme Court Rules Dairy Overtime Exemption Is Unconstitutional

From the Washington Policy Center, Dairy workers could face layoffs after State Supreme Court ruling on overtime pay – court petitioned for reconsideration.

The Washington State Supreme Court ruled the overtime exemption for dairy workers was unconstitutional Nov. 5. Since then, it has been a scramble for dairy farmers and their employees to figure out what to do in the aftermath of a decision that could cost dairy farms up to $120 million for following what was the law at the time.

As previously discussed, the negative effects of this court decision will be felt most sharply by dairy workers themselves as their employers grapple with the potential costs of overtime pay moving forward, including layoffs and a reduction of hours.

The intervenors in the case, the Washington State Dairy Federation and the Washington Farm Bureau, have indicated they are petitioning the court for a reconsideration of their 5-4 ruling. The reconsideration puts the judgment on hold until that request is settled by the court.

However, dairy farmers are being advised to begin paying their employees overtime pay immediately.

Dairy farmers have been in an economic downturn for at least five years. This year was supposed to be a bright spot in an otherwise bleak market. However, with the onset of COVID restrictions and restaurant and school closures, milk prices have remained poor.

Now, dairy farmers must weigh one of three options: restrict all shifts to 40 hours or less, let some of their employees go, or cut the pay of their employees to offset the cost of paying time-and-a-half when their schedules eclipse 40 hours a week.

Dairy farmers have been advised by agriculture groups the fairest approach is to allow their employees to work their full schedule – approximately 55 hours a week on average – at an adjusted base rate. By maintaining the full work schedule, adjusting base hourly wages down (but not below the state minimum wage), and paying overtime at time-and-a-half, dairy employees will end up making slightly more money over the long-term.

The larger question mark for both dairy farmers, and the larger agricultural community, is the potential for retroactive compensation for dairy employees. Retroactive compensation opens dairy farmers up to be required to issue backpay to their employees for up to three years.

The key point of the retroactive compensation question is that it would punish dairy farmers for following the state’s constitution. The new figures for what retroactive compensation would look like in dollars is approximately $120 million, if assessed for three years, according to the Washington Dairy Federation. You can hear more from the Washington Dairy Federation here.

The bottom line is dairy workers and dairy farmers are put at risk by this lawsuit. Dairy farmers are being asked to make late-in-the-year budget shifts to cover the cost of overtime pay and, as a result, some dairy employees may find themselves looking for work as the holidays begin.

WA Policy Center: WA State L&I Thinks Lockdowns Will Extend to June 30, 2021

From the Washington Policy Center, Washington State Labor & Industries thinks the COVID-19 lockdowns will last until June 30, 2021

In a recent request for proposal (login required), Washington State Labor & Industries (L&I) has asked for companies to submit bids for an new L&I Education and Communication Outreach program. The plan is to educate and make sure Washington employers remain in compliance for the continuing COVID-19 business restrictions. All bids are due September 21, 2020 and L&I plans on spending $250,000 on the effort.

The end date of the contract is June 30, 2021, 10 months from now.

Apparently, L&I is planning for an extended COVID-19 lockdown and believes that it will be continuing well into 2021. For many small businesses, being locked down that long will put them out of business.

Some of the compliance program goals include:

  • Increase knowledge of, and compliance with, L&I’s COVID-19 related requirements, particularly among small businesses and nonprofits.
  • Develop new partnerships statewide among organizations serving the employer community and increase the capacity of such organizations to serve as ongoing resources for information and compliance assistance.
  • Foster increased collaboration between L&I, employer-trusted groups, and business and nonprofit communities, and with other public agencies and organizations with regard to pandemic recovery.
  • Strengthen trust between employers and L&I and increase use of L&I’s many tools, resources and services, which can help employers meet their obligations effectively and efficiently.
  • Positively impact the health and well-being of business customers, nonprofit constituents, and others who come into contact with employers and employees.

The justification for the program is that not all businesses know what L&I requires of them, including compliance assistance, during COVID-19. It is yet another example of government overreach.

Washington Policy Center believes the correct course of action is not to require a business to be the enforcement arm of any government agency. The business, may of course, at their own discretion, refuse service to those who don’t follow the rules.

The safety of Washington residents is, of course, important but both residents and businesses have been sensible in their approach to the COVID-19 crisis and can self-regulate themselves to keep our communities safe. The vast majority of business owners will continue doing everything they can do to keep their customers safe.

WPC: State law requires Governor to issue across the board budget cuts if cash deficit projected

From the Washington Policy Center, State law requires Governor to issue across the board budget cuts if cash deficit projected, addressing tax shortfalls from COVID lockdowns in Washington State.

There are two legal options to respond to a state budget deficit: 1) The Governor orders across the board budget cuts, or 2) A special session of the legislature occurs liquidating the deficit. The first is a blunt instrument allowing no thoughtful response. The second provides the people’s legislative branch of government the opportunity to deliberate a more surgical response. The Governor, however, has made it clear he doesn’t plan to call a special session to allow lawmakers to meet to balance the budget. No special session leaves the obligation for the Governor required under RCW 43.88.110(7):

“If at any time during the fiscal period the governor projects a cash deficit in a particular fund or account as defined by RCW 43.88.050, the governor shall make across-the-board reductions in allotments for that particular fund or account so as to prevent a cash deficit, unless the legislature has directed the liquidation of the cash deficit over one or more fiscal periods.”

According to RCW 43.88.270:

“Penalty for violations. Any officer or employee violating, or wilfully refusing or failing to comply with, any provision of this chapter shall be guilty of a misdemeanor.”

Unless the Governor is now saying a cash deficit isn’t currently projected in the general fund, it is unclear why he believes this budget law doesn’t apply to him. Here is what Governor Gregoire did in 2010 when complying with this same legal requirement:

“ . . . WHEREAS, the anticipated revenues combined with the beginning cash balance of the general fund are insufficient to meet anticipated expenditures from this fund for the remainder of the current fiscal period; and . . .

WHEREAS, state law authorizes and directs the Governor to implement across-the-board reductions of allotments of appropriations to avoid a projected cash deficit . . .

NOW, THEREFORE, I, Christine O. Gregoire, Governor of the state of Washington, pursuant to chapter 43.88 RCW do hereby order: The allotment of each appropriation from the State General Fund will be reduced effective October 1, 2010, by an amount necessary to avoid a cash deficit in the State General Fund.”

The requirements of RCW 43.88.110(7) are based on the cash projection in a single account. This means when evaluating if a cash deficit is projected, you can’t assume balances in other accounts or the state’s emergency reserves. Accessing fund balances in other accounts, including the emergency reserves, requires an appropriation from the legislature.

If the Governor is not going to call a special session to allow the legislature to act, there is one simple question he needs to answer: Is a cash deficit currently projected for the general fund?

WA Policy Center: In Seattle, Failure in Leadership Produces Failure in Governance

From the Washington Policy Center, an article about recent activity in the city of Seattle – In Seattle, failure in leadership produces failure in governance

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Seattle’s elected officials allow widespread law-breaking by some, while imposing full enforcement on the rest of us

We often hear that it is important to lead by example. Lately, the example set by Seattle’s elected leaders has been one of lawlessness, civic breakdown and broken governance. City leaders ordered police to evacuate a police station and abandon a six-block neighborhood to radical left-wing groups, who set up a Capitol Hill Autonomous Zone (CHAZ), since re-labeled an Occupied Protest (CHOP). Authorities retreated after they had failed to stop widespread looting and arson in Seattle’s once-prestigious downtown core.

At the same time, Seattle leaders fully expect everyone else to behave responsibly, respect their authority, and follow the vast web of rules that regulate every aspect of life in the city. For Seattle leaders, one person robbing one store is a crime, but mass looting an entire shopping district is accepted as “protest”.

Conditions in the CHOP deteriorated quickly. In the short time the no-police zone existed, one man and a teen boy were killed and others were seriously wounded in shootings . Medics responding to 911 calls could not enter the zone, but had to respond to a staging area nearby. Violence inside CHOP became so politically sensitive that The Seattle Times shut down its online comment section on the shootings.

Of course it’s easy to accept civic violence when it is happening to someone else. The mayor of Olympia learned that dramatically when politically-motivated property damage, so attractive at a distance, arrived on her own doorstep.

Earlier she had expressed support for the protests, lamented her shortcomings, noting she “was not without sin…” and that she needed to be “more welcoming and nurturing…” Her mood changed swiftly, however, when rioters vandalized her house the evening of June 12th, damaging the front door and porch with spray-painted political slogans. She likened the attack on her home to “domestic terrorism,” adding, “It’s unfair.”

Journalist Chris Martin Palmer had a similar experience, cheerleading for burning buildings and looting in Minneapolis, until groups of rioters approached his neighborhood, at which point he angrily tweeted that protesters should “Go back to where you live.”

The ongoing disfunction in Seattle is representative of the breakdown of civility and peace in cities long governed by one-party rule. The last Republican mayor of Seattle was James Braman, elected in 1964. The last arguably centrist mayor was Wes Uhlman, who left office in 1978. Today the city council is neatly divided into two camps, those on the left and those on the far left.  The latter faction is aggressively led by avowed socialist Kshama Sawant.

Secure in the knowledge that voters have no real alternatives, the party in power naturally becomes increasingly radical as time passes. Interest groups become more strident in their demands. In Seattle’s case key interests include powerful city unions, militant environmental activists and, oddly, the local bicycle club.

The result is that while looting, arson and physical assault are forgiven, laws imposed on average families are strictly enforced. For example, failure to pay property taxes to the city in full and on time include a 3% penalty on the first payment due, and an additional 8% penalty on the second payment, followed by foreclosure and confiscation. Parking, permitting, and red-light traffic camera rules are all strictly enforced. City officials threaten business owners who don’t follow rules with closure and loss of livelihood.

Civic life is not possible without widespread goodwill and cooperation from citizens. Seattle officials rely on voluntary compliance to govern for everything from traffic rules, to re-modeling permits, to paying taxes. Yet the Mayor and city are setting an example that rewards widespread cheating. Why should the average home or business owner live “by the book” when Seattle lets others break any law they like. People may reason, “Sure I cheat on my taxes, but at least I didn’t set a police car on fire.”

If people follow the example of street activists and simply ignore rules they don’t like the city would quickly become marked by commonplace fraud and deception, which is why the mayor’s decision to allow mass lawlessness is so problematic.

Expecting people to obey the rules while accepting widespread law-breaking cannot lead to respect, peace or justice. The Mayor called it a summer of love, but what she really created is a culture of distrust and evasion in community life.

Her belated clean-up of the CHAZ zone does little to mitigate the damage done in terms of the messages already sent. Anarchists and activists know the city can be broken and will want to test it again.  Seattle’s residents and business owners know they cannot have confidence that they will get the protections they pay for and that rules only strictly apply to them.  It will take time to undo that damage.

Only fair and firm administration, civic pride and a sincere respect for order can make and keep Seattle a great place to live for everyone.

WA Policy Center: Bills Introduced to Ban Initiatives and Referendums in Odd Years

Politicians in Washington State have been so angered by the people’s approval of I-976, limiting one small section of taxation on vehicles, that they have introduced house and senate bills to limit voting on initiatives and referendums to only even numbered years. The bills in question are HB 2529 and SB 6503.

The Washington Policy Center sums up the bills:

Key Findings

  1. House Bill 2529 and Senate Bill 6503 would ban the people’s right to vote on initiatives and referendums in odd-numbered years.
  2. Bill sponsors say they want to ban the people’s right to vote on initiatives and referendums in odd-numbered years because of lower voter turnout.
  3. The bills, however, would still allow local government officials to hold special elections to raise taxes without restriction in all years.
  4. It is difficult to see why it would be acceptable to allow tax increases to appear on the ballot in odd-numbered years while denying Washingtonians their constitutional right to vote on initiatives and referendums in those same years.
  5. Testifying on the proposal, Secretary Wyman noted the bills would limit the people’s right of initiative and referendum and could add to voter fatigue by causing exceedingly long ballots.

Introduction

Two bills have been proposed that would prohibit the right of the people to vote on initiatives and referendums in odd-numbered years. Although House Bill 2529 and Senate Bill 6503 would ban the people’s right to vote on initiatives and referendums in odd-numbered years, they still would allow local government officials to hold special elections to raise taxes without restriction in all years.

Download file Download the full legislative memo here.

Related:

The Lens: Lawmakers propose to limit elections

WA Policy Center: King County Judge Upholds Most of I-976

From Washington Policy Center on the present fate of I-976 which passed in voting, but which state administration officials are fighting tooth and nail. I-976 put limits on motor vehicle taxes and fees and was supposed to take effect on Dec. 5, 2019, but has been on hold pending legal challenges.

King County Judge Marshall Ferguson dismissed all but two constitutional challenges to Initiative 976 today.

Notably, he declared that the plaintiffs did not satisfy the burden of providing beyond a reasonable doubt that I-976 violates single-subject rule or subject-in-title rule, both in Article II Section 19 of the Washington Constitution.

The court noted the ballot title is “general, not restrictive.” The initiative broadly addresses motor vehicle taxes and fees in the title, and the court agrees that Sections 2-11 and 13 of the initiative directly address motor vehicle excise taxes.

The arguments given by plaintiffs that the initiative violates the subject-in-title rule also failed to establish a violation. The court asserted that per previous case law, an initiative ballot title “need not be an index to the contents, nor must it provide details of the measure.” The initiative’s ballot title provided “sufficient notice that the initiative repealed vehicle-related taxes and fees.”

Other constitutional violation claims that were thrown out include:

The two that remain, and are why the initiative remains on hold, are claims under Article I Section 12 and Article I section 23 of the state Constitution, “regarding [Kelley Blue Book] and Burien bonds.”

The first claim has to do with government using the private company Kelley Blue Book valuations, which are a proprietary product, to determine vehicle-related taxes. Plaintiffs argued that calculating car tabs based on Kelley Blue Book values would require the state to contract with the company and would “grant…special contractual privilege to a corporation,” which would violate Article I Section 12. Whether that is true requires additional discovery.

Interestingly, the state already uses Price Digests, as well as Kelley Blue Book and National Auto Dealers Association values for vehicles and boats to establish if they are worth less than the average fair market value. Surely this doesn’t require a contract between DOL and these various companies?

The second claim regarding the City of Burien pertains to whether I-976 could impair their municipal bond contracts, which may or may not depend on revenue from the city’s Transportation Benefit District vehicle fees. Additional discovery has to be conducted to determine if bond contracts would, in fact, be impaired.

While these two issues remain outstanding, the initiative remains on hold and people will continue to be charged high car tab taxes and fees. We anticipate there will be appeals and will continue to track this issue and its impact on the state transportation budget now being developed at the legislature.