HOUSE BILL REPORT

EHB 1544

BYRepresentatives Belcher, Allen, Wang, Ebersole, Appelwick, Cole, Unsoeld, Fisher, Locke, Jacobsen, K. Wilson, Lux, Anderson, Scott, Vekich, Grimm, Brekke, Rust, Basich, Wineberry, Sayan, Braddock, Leonard, H. Sommers,R. King, Nelson, Jones, Heavey and Nutley

Increasing the state minimum wage.

House Committe on Commerce & Labor

Majority Report:  Do pass.  (7)

      Signed by Representatives Wang, Chair; Cole, Vice Chair; Fisher, Jones, R. King, O'Brien and Sayan.

Minority Report:  Do not pass.  (2)

      Signed by Representatives Patrick and Walker.

House Staff:Chris Cordes (786-7117)

AS PASSED HOUSE FEBRUARY 9, 1988

BACKGROUND:

The Washington Minimum Wage Act shares concurrent jurisdiction with federal minimum wage laws.  Where both federal and state law apply to the same employment, the employer must comply with the higher standard.  The federal minimum wage of $3.35 an hour does not apply to certain small employers and employers not engaged in interstate commerce. 

Washington state's minimum wage applies to all employees who are at least eighteen years of age, except for specified classes of employment.  Exclusions from the state minimum wage law include agricultural workers, workers engaged in domestic service in a private home, and newspaper carriers, among others.  Since 1977, the state minimum wage has been $2.30 an hour.

SUMMARY:

Beginning on January 1, 1989, the new state minimum wage will be calculated based on the annual dollar figure for the poverty income guideline for family of three persons, as issued in 1987 by the United States Department of Health and Human Services (as $9,300) divided by 2080 hours and multiplied by 95 percent ($4.24).  Beginning on January 1, 1990, the state minimum wage will be recalculated based on the same formula, but using a multiplier of 105 percent and with adjustment based on the previous year's change in the consumer price index.  Thereafter, each year on January 1, the state minimum wage will be recalculated to make the adjustment for the change in the consumer price index.  Employees under the age of 18 must be paid 75 percent of the state minimum wage for persons 18 or older.

The agricultural worker exemption from the state minimum wage is deleted.  The exemption from state minimum wage and overtime provisions for persons in domestic service is deleted.  Special provisions relating to the minimum wage of employees of state and local governments, nursing homes, hospitals and restaurants are deleted.  An exemption is added for persons employed in casual labor in or about a private home, unless services are performed in the course of the employer's business.

The director of the Department of Labor and Industries is authorized to assess a civil penalty against an employer who pays or agrees to pay less than the applicable state minimum wage.  The penalty is the greater of:  (1)  $1,000; or (2) twice the full amount of the applicable wage rate less the amount actually paid to the employee.  Penalties assessed will be deposited in the general fund to be used for administration of the state minimum wage law.

Fiscal Note:      Requested January 15, 1988.

Effective Date:The bill takes effect on January 1, 1989.

House Committee ‑ Testified For:    Representative Jennifer Belcher, prime sponsor; Archbishop Raymond Hunthausen;  Professor Herbert Perry;  Susan Johnson, Service Employees International Union;  Rose Kiourkas;  Debbie Hart; Jeff Johnson, Washington State Labor Council;  and George Finch, United Farmworkers Union.

(Neutral):  Dan Hainline, Department of Labor and Industries.

House Committee - Testified Against:      Robert Hass;  Jan Gee and Shirley Boggess, Washington Retail Association;  Pat Newbury;  Bob Seeber, Restaurant Association of Washington and Washington State Lodging Association;  Clif Finch, Association of Washington Business.

House Committee - Testimony For:    Washington fulltime workers should be assured of an income that at least meets the poverty level.  In recent years, the state minimum wage has not kept pace with inflation.  At the present state minimum wage, there is no incentive for many persons receiving state assistance to work at jobs paying the state minimum wage.  The state is subsidizing marginally profitable businesses through its welfare grants.

House Committee - Testimony Against:      Although the state minimum wage is too low, the large increase required in the bill will result in further economic distress to the state.  Many small businesses will be forced to close.  The high minimum wage will also act as a wage inflator for the wages of higher paid employees.  The working poor will not be helped because jobs will be lost.