Newsletter — January 4, 2024

IN THIS ISSUE

POLICY


ECONOMY


THE LOCAL FRONT


RETAIL THEFT & PUBLIC SAFETY



2024 Legislative Session Begins – January 8


The 2024 Legislature will convene on January 8 for a 60-day Session scheduled to end March 7. WR is gearing up for a sprint as several thousand bills will be in play. All bills introduced in 2023 that did not pass will be automatically reintroduced for 2024, in addition to the introduction of hundreds of new bills. WR will continue to review and take appropriate action on all bills that impact retailers.

 

The Democrats dominate the legislative makeup in both the House and Senate with wide margins, as well as the Governor’s office held by Democrat Jay Inslee, who has announced he will not be seeking re-election in 2024. Inslee is the second Governor in state history to hold the post for three terms – the first was Dan Evans.

 

WR anticipates many issues to be debated that will impact retail. In addition, new issues that have yet to appear on our bill-tracking radar will also be introduced, requiring our attention.

 

Hot issues will include packaging extended producer responsibility – this determines who pays for product packaging when it is time to recycle or properly dispose of. Previous versions of the legislation have been called the WRAP Act – Washington Recycling and Packaging Act. 

 

A new issue area that will likely be debated for several years is the use and development of artificial intelligence. There will be several bills to study AI and regulate its uses. WR will also be proactively supporting several bills and appropriations. This includes an appropriation from the state's federal funds to assist small businesses to install theft prevention measures – such as bollard barriers, cameras, fencing, and bars. Another bill WR is leading the charge on will allow injured workers to return to work for light duty at a qualified non-profit if their employer doesn’t have a light duty position available.

 

The six qualified initiatives will be a significant wildcard for the 2024 Legislature. Four of the initiatives that WR supports include the repeal of the unconstitutional capital gains tax, another to ban once again the imposition of a state income tax, one to repeal the flawed and poorly funded long-term care tax program, and another to allow law enforcement to safely, with approval and training, pursue suspected property criminals in their vehicles. 

 

The Legislature has three choices in dealing with these six voter-qualified measures. One, they can approve them. Two, they can ignore them, in which case they will appear on the November general election ballot. Or three, they can offer an alternative to the voters, which will appear on the November ballot along with the voter-qualified initiative. This is the first time the Legislature must deal with six initiatives in one session. This signals that perhaps voters are not pleased with several of the new taxes and regulations the Legislature has approved in recent years.

 

If you are a WR member and would like to participate in our weekly Policy and Government Affairs Committee calls, receive the minutes or bill tracker, please contact Mark Johnson, Sr. VP of Policy and Government Affairs.

 

Legislature unpacks six ballot initiatives in 2024


Let’s Go Washington has turned in over 2.6 million signatures for all six landmark initiatives. The campaign has marked a notable achievement in delivering the initiatives to the Legislature before the December 29 deadline. If not addressed by lawmakers in the upcoming legislative session, these measures will automatically proceed to the ballot.


The six initiatives include:

  1. I-2117: Seeking to repeal the Climate Commitment Act.
  2. I-2109: Aiming to roll back the tax on capital gains.
  3. I-2111: Proposing a ban on state and local governments from imposing taxes on income.
  4. I-2113: Intending to relax restrictions on law enforcement officers' vehicle pursuits.
  5. I-2081: Enhancing parental rights in public schools, including the ability to review student records and opt children out of sex education.
  6. I-2124: Allowing residents to opt out of the WA Cares Act, a long-term care program.


As Washington prepares for an election year filled with pivotal decisions, including the presidential and gubernatorial elections, these initiatives add a significant dimension to the political landscape. With substantial funding expected from various interest groups, the 2024 election in Washington is shaping up to be a crucial battleground for these key issues.

Gift card bills could dampen the gift-giving spirit


Representative Emily Alvarado (D, 34th LD) is set to introduce two bills that would significantly affect how customers purchase and use gift cards.


HB 2094 has several components, but the most alarming is the requirement for establishments to "cash out" gift card balances of less than $50. California has the nation's highest "gift card cash out" at less than $10. Currently, Washington's cash-out law is $5 or less. If this bill were to pass, the new cash out would be ten times higher, increasing the risk of fraud and money laundering activities.


HB 2095 would require unused gift cards to be remitted to the state's unclaimed property fund after a period of time. Although the legislation is being framed as an additional protection for customers, this bill could require purchasers to provide their personal private information or that of the gift card recipient at the point of sale before being able to walk out the door with the gift card. Additionally, the funds being remitted to the unclaimed property fund would create a new revenue stream for the state.


WR has been working very closely with other organizations and stakeholder groups who would be deeply impacted and will be monitoring this legislation closely.

The new year brought changes to minimum wage, non-compete agreements, and more


On Monday of this week, several wage-related regulations in Washington underwent significant changes. These updates, provided by the Washington State Department of Labor & Industries (L&I), are important for employers to understand:


Updated state minimum wage: Washington's minimum wage was raised to $16.28 per hour, affecting workers aged 16 and above. For younger employees aged 14-15, employers are permitted to pay 85% of this rate, amounting to $13.84 per hour.


Changes in overtime exemption for employees: The salary benchmark for overtime exemption was revised. Now, workers must earn at least $1,302.40 weekly (equivalent to $67,724.80 annually) to be exempt from overtime. This change impacts various categories of workers, including those in executive, administrative, and professional roles, as well as computer professionals and outside sales staff. Specifically, exempt computer professionals must now earn a minimum hourly wage of $56.98, which is 3.5 times the state minimum wage.


Revised criteria for non-compete agreements: The threshold for employees subject to non-compete agreements was updated. Employees must now earn over $120,559.99 annually, and independent contractors must earn more than $301,399.98 annually to be legally bound by such agreements.


More update details from L&I

Nostalgia, mobile shopping, and early deals dominate 2023 holiday retail sales


In 2023, the retail landscape during the holiday season was influenced by various factors, including the lingering effects of the pandemic, economic uncertainties, and evolving consumer behaviors.


Retailers faced challenges like reduced holiday hiring, with notable companies like Macy’s hiring fewer seasonal workers compared to previous years. Economic pressures led to cost-cutting measures, including layoffs by companies such as Etsy, Saks, and REI. Consumers, grappling with higher prices, became more cautious with spending, particularly on discretionary items. Retailers responded by using nostalgia in their campaigns, with examples like Amazon’s “Joy Ride” ad and Walmart’s “Mean Girls” reunion spot.


Innovative marketing strategies were key, with brands employing new technologies to attract customers. J.Crew and Kohl’s introduced virtual stores and events, respectively, while TikTok Shop launched in the U.S., offering in-app purchases and luxury item authentication services. Walmart’s 23-part shoppable rom-com series on platforms like TikTok and YouTube showcased 330 products, reflecting a trend towards engaging, multi-platform marketing.


Hybrid marketing formats, combining online and in-person experiences, gained traction. Pop-up shops and markets continued to be popular, with many brands hosting notable events. Inflation remained a concern, affecting consumer spending habits and leading to a decline in sales of big-ticket items like electronics and furniture. Retailers adapted by offering earlier and deeper holiday promotions, helping customers stretch their budgets.


Despite a gloomy outlook in September, early holiday deals paid off, with Black Friday and November sales exceeding expectations. Consumers, while cautious, were responsive to discounts, leading to a surge in spending. Retailers like Amazon, Walmart, Target, and Macy’s initiated early sales, competing for consumer attention.


The National Retail Federation noted a slight decrease in early holiday sale participation, while a Shopify-Gallup survey found that many consumers planned to complete their shopping in December. Black Friday saw a shift towards mobile shopping, with Adobe Analytics reporting that mobile sales surpassed desktop, indicating a preference for the convenience of smartphone shopping.


Overall, the 2023 holiday season was marked by strategic adaptations by retailers to meet changing consumer needs, with a focus on innovative marketing, early promotions, and an emphasis on mobile and online shopping experiences.

Seattle’s political landscape transforms with new City Councilmembers


On January 2, Seattle’s political landscape experienced a significant shift as five new members joined the City Council, accompanied by the election of a new Council President, marking a new chapter in the city’s governance. Rob Saka, Joy Hollingsworth, Maritza Rivera, Cathy Moore, and Bob Kettle took their oaths alongside incumbents Tammy Morales and Dan Strauss at City Hall. Sara Nelson, already serving as a citywide Councilmember, was unanimously chosen as the Council President, pledging to focus on “simple good governance.”


This change includes the departure of the other citywide Councilmember, Teresa Mosqueda, who won election to the Metropolitan King County Council. The City Council must name a person to fill her Council position until voters choose the new Councilmember in the November 2024 election. The new Council composition suggests a shift from the activist-driven approach of previous years to more pragmatic governance.


The Council’s upcoming agenda includes tackling an updated city growth plan, a new property-tax levy for transportation, addressing a budget gap, and negotiating a police union contract. Having endorsed several new members, Mayor Bruce Harrell might find a more agreeable Council for his policies.


In their inaugural speeches, the new members emphasized a commitment to core local government functions, including public safety, vowing to rebuild public trust.  In summary, Seattle’s City Council is embarking on a transformative journey with new members and leadership, poised to address critical issues with fresh perspectives and a commitment to fundamental governance.

Shipt pauses operations in Seattle amid regulatory challenges


The recent announcement by Shipt to pause its same-day delivery service in Seattle highlights the growing challenges for gig economy platforms to operate in Seattle’s regulatory environment. This decision was the result of a series of city ordinances that will dramatically impact how app-based companies can operate in the city.


In response, Renée Sunde, CEO of WR, expressed disappointment over the need for Shipt’s decision, citing the many difficulties faced by businesses trying to operate in Seattle. Sunde highlighted the challenges in complying with laws like the App-Based Worker Minimum Payment Ordinance, known as ‘PayUp,’ which mandates complex requirements for app-based platforms. The final rules for PayUp, released in late November 2023, gave companies only 45 days to comply, an insufficient time to re-engineer apps, especially during the busy holiday season.


Shipt will continue serving the broader metropolitan area but will not make deliveries to or from Seattle. “We would not be surprised to hear that other app-based platforms make significant changes to their operations in Seattle in the coming weeks,” Sunde acknowledged.


This development in Seattle’s gig economy landscape highlights the tension between regulatory efforts to protect workers and the operational viability of app-based companies. The response from the newly-elected Seattle City Council could determine how gig economy platforms operate in the city.

There’s a new mayor in the Capital City


Olympia’s newly elected Mayor, Dontae Payne, presided over his first city council meeting on Tuesday, January 2, 2024.


Mayor Payne brings a wealth of experience to this new position. In addition to serving on Olympia City Council since being elected to Position #6 in November 2021, he also works for the Office of the Governor as a Policy Advisor for Civil Rights & Racial Justice.


An overwhelming 69% of Olympia voters cast a ballot for Dontae. “I feel such gratitude to our community for electing me,” Payne said. “I’m excited to serve as mayor at this moment where the possibility of more substantive change is on the horizon.”


Dontae, an Army Veteran, made Washington history as Olympia’s first Black Mayor. To commemorate the historic city council meeting, Congresswoman Marilyn Strickland was in attendance to ceremonially swear in Mayor Payne to his new position. Dontae previously worked for the Congresswoman as a Deputy District Director. 


Mayor Payne shared with WR, “I’m excited to get to work on our community’s priorities, including incentivizing more affordable housing development, welcoming more businesses and startups, and continuing to address public safety concerns. The City of Olympia is starting a new chapter, and I believe we’re on the right track to tackle our most pressing issues.”

WR addresses Lacey South Sound Chamber


WR Vice President of Policy and Government Affairs Mark Johnson was the keynote speaker for the January 3 luncheon of the Lacey South Sound Chamber of Commerce (LSSCC). Johnson addressed the important topics of worker and customer safety, retail theft, and organized retail crime (ORC). Renée Sunde, WR President and CEO and former LSSCC President attended the event.

 

Johnson focused on the challenges of providing a safe working environment and place to shop for customers amid rampant retail theft, often committed by ORC rings. According to the National Retail Federation, retail theft accounts for over $112 billion in losses nationwide and almost $3 billion in Washington state alone, equating to more than $300 million in uncollected taxes. Shockingly, 54% of small businesses surveyed experienced increased theft in 2022.

 

ORC rings use the “proceeds” from fencing stolen goods to fund most of their other criminal activities. These rings are becoming more and more violent and hostile, endangering the safety of shoppers and employees.

 

So what can be done? Progress is being made in this fight. The federal passage of the online transparency act, which went into effect June 2023 – making it harder to fence stolen goods is taking a toll. The “Vibrant Communities” national effort – pilot program being conducted in Seattle/King County by the Retail Industry Leaders Association is showing promise. The Washington State Organized Retail Crime Task Force has filed its first case and is hiring new unit members. Its next meeting is on January 23. Congress is debating and will likely pass the Combatting Organized Retail Crime Act (CORCA), which will bring together federal agencies in the fight against ORC nationally and internationally.

 

While battles are being won, much more is still left to do. Law enforcement needs to be empowered to, once again, with proper approval training, and only when safe, pursue suspected property criminals in their vehicles. The qualification of Initiative 2113 to the Legislature and eventually the people on November’s ballot is encouraging that action will be taken. Enhancements and tools for law enforcement and prosecutors are needed. Targeting theft rings and multiple accomplices and allowing the apprehension of criminals concealing stolen goods would all help. Small businesses are not immune from retail theft. Grants funded with federal dollars to help purchase deterrent and protection measures would be a welcomed addition. Diversion programs for retail thieves who are being prayed upon by ORC rings because they are suffering from substance abuse, addiction, and/or mental illness are essential. Funding and strategies to increase the number of law enforcement officers in our communities. Washington currently ranks at the bottom.

 

WR strongly values its partnership with the Lacey South Sound Chamber of Commerce and commends it for educating its members on this important issue.

Register now for AG’s Organized Retail Crime Task Force meeting on January 23


The Office of the Attorney General is holding its quarterly Organized Retail Crime Task Force hybrid meeting on Tuesday, January 23, 2024, between 1:00 p.m. and 4:00 p.m.


Those wishing to participate in person must RSVP using this link by Wednesday, January 17. The meeting will be hybrid. In-person attendance at the Seattle Office will be limited due to available space. RSVPs for in-person attendance will be accepted in the order received.


For any questions, please reach out to the Policy Team at policy_team@atg.wa.gov.

WR diversity statement


WR is committed to the principles of justice, equity, diversity, and inclusion. We strive to create a safe, welcoming environment in which these principles can thrive.


We value all people regardless of race, ethnicity, gender, religion, age, identity, sexual orientation, nationality, or disability, and that is the foundation of our commitment to those we serve.

Washington Retail Staff

Renée Sunde, President/CEO — 360.200.6450 — Email

Mark Johnson, Sr. VP of Policy & Government Affairs — 360.943.0667 — Email

Crystal Leatherman, State & Local GA Manager — 360.200-6453 — Email

Rose Gundersen, VP of Operations & Retail Services — 360.200.6452 — Email

Robert B. Haase, Director of Communications — 360.753.8742 — Email