Newsletter March 2, 2023

IN THIS ISSUE

POLICY

ECONOMY

ON THE LOCAL FRONT

Retailer explains why he’s leaving Seattle while police shortfall grows

RETAIL THEFT & PUBLIC SAFETY

SAFETY

Ergonomic workstations reduce injury risks

Legislature passes first significant hurdles

The first significant legislative cut-offs of the 105-day session have passed – February 17 was the Policy Committee cut-off, and February 24 was the Fiscal Committee cut-off. The next cut-off is March 8, when all bills must be out of their House of origin. This means all bills not favorably acted upon are unlikely to receive further consideration this session. However, several rule maneuvers could still be deployed to “revive” a bill or include it in the Operating Budget. There is also the age-old strategy of “hanging” a dead bill on a broadly titled bill that is still alive.

WR has several bills that we continue to engage on—some that we are able to support and others that need improvement. First and foremost are a suite of bills relating to public safety, retail theft, and organized retail crime.

House Bill 1363—allowing law enforcement to pursue suspected criminals—was significantly altered by removing property crimes from the permissible reasons to pursue. This would impact all retail thefts. WR will work diligently to amend the bill and re-insert property crimes as one of the reasons a pursuit can be engaged. Two other measures, House Bill 1586 and Senate Bill 5533, would authorize a two-year study on pursuits and best practices to make recommendations to the legislature. WR supports these bills in addition to—not as a replacement for—the original HB 1363.

WR strongly supports Senate Bill 5056, which would increase penalties for repeat or habitual property crime offenders, and Senate Bill 5160, increasing penalties for organized retail gangs which use multiple accomplices. Both bills await a vote of the entire Senate.

WR continues to advocate for including $3 million in funding to bolster the newly formed Attorney General’s Organized Retail Crime Task Force. The budget is immune from all cut-offs and can be debated until the last day of session—April 23.

One of the more challenging bills is House Bill 1155—relating to health data privacy. The bill seeks to protect sensitive healthcare data that is not currently covered by the federal HIPAA Law (Health Insurance Portability and Accountability Act). However, the legislation is too broad and, as presently written, would unintentionally include many non-sensitive healthcare products and services, such as numerous over-the-counter medications, vitamins, health-related foods, health-related clothing, devices, and tools. WR is working closely with proponents to narrow the bill’s scope to modify and clarify the bill’s intent. The bill is awaiting action by the full House.

Another major piece of legislation is the WRAP Act (Washington Recycling and Packaging)—House Bill 1131—currently awaiting action by the full House. The bill contains three major components. First is an extended producer responsibility (EPR) program where producers fund a recycling and disposal program for all packaging. Second, a post-consumer recycled content (PRC) requirement for future packaging. And third, establishing a beverage container reimbursement (BCR) program like the state of Oregon’s. WR continues to work with all stakeholders on this sweeping and complex legislation.

Legislative Update

The 2023 Legislative Session has reached the halfway point, barring an extended special session. As of today, legislators have filed 2,016 bills. Friday, February 24, was the “cutoff” for bills to be voted out of committee.

WR’s policy and government affairs team have continued to engage on bills impacting retail. Notable bills that did, and did not, make the cutoff:

SB 5171 addresses gender price discrimination, following similar laws in New York and California, making gender-based pricing illegal. The bill was filed by Sen. Manka Dhingra, D-Redmond, after a presentation by six Kirkland high school students, claiming that studies have shown prices for personal care products marketing to women are 13% higher, on average, than products for men. The bill passed out of the Senate Ways & Means Committee and awaits action by the full Senate. WR has significant concerns with compliance.

SB 5541, the Transparency in Supply Chains bill, had a noble intent of addressing the global need to prevent forced labor by requiring retailers and manufacturers to disclose key aspects of their business practices on their websites. Specifically, disclosures would have included product supply verification, supplier audit, direct supplier certification, internal accountability standards, and internal training. SB 5541 mirrored the CA Transparency in Supply Chain Act (Act). However, it lowered the threshold of covered businesses with over $75 million in annual global sales. The issue of forced labor in supply chains was addressed when Congress passed the Uyghurs Forced Labor Prevention Act (UFLPA) in December 2021. WR believes the technical issues in the bill would have inadvertently harmed small businesses. The bill failed to make the cutoff after its referral to the Senate Ways & Means Committee.

HB 1068 concerns injured workers during independent medical exams. In the workers’ compensation system, a State Fund or self-insured employer’s claim manager may request an injured worker submit to an “independent” medical examination (IME) to (1) determine whether to allow or re-open a claim; (2) resolve a new medical issue, an appeal, or case progress; or (3) evaluate a worker’s permanent disability or work restriction. The examinations are performed by medical providers approved by the Department of Labor and Industries (Department).

HB 1068 would allow an injured worker to make an audio and video recording of an independent medical examination and to have one person of the worker’s choosing present during the examination. WR opposes this bill because L&I anticipates it will cause scheduling delays if a provider does not consent to an audio and/or video recording, and even more problematic amongst mental health providers. Any delays in services for injured workers will increase future disability and claim costs. The bill awaits action by the full Senate.

Home Depot to spend billions on pay raises for everyone

Home Depot, the world’s largest home improvement retailer, is investing significantly in all U.S. and Canadian hourly employees in 2023.

The company announced last week that it would raise all hourly employees to at least $15 an hour, more than double the federal minimum wage of $7.25. All associates saw the new rates reflected in their paychecks on February 24.

With nearly 500,000 workers in over 2,000 stores, Home Depot’s decision will cost the company approximately $1 billion. About 92% of Home Depot workers are hourly.

“The most important investment we can make is in our people, which is why we are announcing that we are increasing annualized compensation by approximately $1 billion for our front-line hourly associates,” CEO Edward Decker said on last week’s earnings call.

“We believe this investment will position us favorably in the market, allowing us not only to attract the most qualified talent but also retain the exceptional associate base that is already in place.”

Target to invest $100 million to expedite online order delivery

Seeking to expedite online orders and get products into the hands of their customers faster, Target is investing $100 million to expand their next-day delivery across the country.

Target recently announced that it will invest heavily to scale its supply chain product sorting network by opening six additional centers by the end of 2026. Currently, they have nine centers in Minnesota, Texas, Colorado, Illinois, Georgia, and Pennsylvania, and newly opened centers in Chicago and Denver. The move will help “deliver more efficiently and faster, at a lower cost while increasing our capacity.” The investment is promised to also create hundreds of jobs.

The retailer explained the expansion of its network “provides a fast, efficient, reliable and low-cost delivery option for our business, benefiting both our guests and the bottom line.”

Lenders brace as defaults rise

There is new evidence that remote and hybrid work models have permanently affected the office market as an increasing number of large office landlords are defaulting on their loans.

In Los Angeles, an asset management company recently defaulted on over $750 million in debt for a pair of 52-story towers. In New York's financial district, a real-estate firm is in talks with creditors to restructure debt on a 34-story tower. According to the Wall Street Journal, returning the building to the lender is an option under consideration.

Every month, five to 10 office towers join the list of properties at risk of defaulting due to low occupancy, expiring leases, or maturing debt that would be refinanced at a higher rate.

Landlords have been able to keep up with their mortgage payments, primarily due to the long-term nature of office leases, which typically run for ten years or more. Lenders have been willing to extend expiring mortgages, which has helped to maintain the status quo.

Office owners have been facing a series of setbacks. The latest blow came from the commercial real-estate management platform VTS, which reported a 30% decline in new demand for Seattle office space since January 2022. This adds to the mounting negative news for office owners.

It has taken three years, but commercial office brokers are realizing the market will never return to what it was before hybrid work became the way of the world.

"There will be no great return. Seattle's lights will not just turn back on again. We thought this in 2020, and we were wrong. Too much time has passed," Newmark brokers Charlie Farra and Matt Betterman wrote in a report last week. The brokers say the Puget Sound region market, with nearly 19% of the market's space available, could take up to three years to improve.

The tech industry is experiencing an increase in layoffs, while foot traffic for office workers in downtown Seattle while improving, remains at only 43% of pre-pandemic levels. Additionally, Amazon employees are resisting the company's directive to return to the office by May 1.

Retailer explains why he’s leaving Seattle while police shortfall grows

Corey Gassmann, owner of School of Bike, a bike shop in Wallingford, detailed to Danny Westneat of The Seattle Times why he’s moving his shop from Seattle. Exasperated by numerous break-ins, Gassmann told Westneat that the final nudge came from a Seattle police officer:

“Here’s a police officer telling me to get the [bleep] out of Seattle, or else it’ll just happen again,” Gassmann said. “I can’t have $30,000 worth of bikes sitting behind a thin layer of glass in this neighborhood, with no protection and nobody to call. There’s just no way I can continue to run this business. . . I’m done. I’m getting out of having a retail business in Seattle ever again.”

Westneat points to the chronic shortage of police officers as a prime reason retailers like Gassmann feel their businesses cannot be protected. Although the Seattle Police Department has hired 190 officers since 2020, 515 officers have left. And the numbers are not improving, despite Mayor Bruce Harrell’s efforts to retain current officers and hire new ones. Last year, SPD suffered a net loss of about 90 officers. Both Westneat and Gassmann blamed the lingering effects of the “defund-the-police debacle.”

AG ORC Task Force to convene in Tacoma on March 29

Attorney General Bob Ferguson is convening his third Organized Retail Crime (ORC) Task Force meeting in Tacoma on March 29.

The purpose of the ORC Task Force is to address the growing ORC problem in Washington State by:

Increasing coordination between retailers, law enforcement, and prosecutors at all levels of government,
Enforcement of laws and prosecutions of ORC theft groups,
Deterring retail thefts and making it known that Washington State will not tolerate retail crimes.

Participating in the meeting will be representatives of law enforcement, prosecutors, retailers, loss prevention officers, and AG staff members. Washington Retail Association President/CEO Renée Sunde, Senior VP of Policy and Government Affairs Mark Johnson, and Communications Director Robert Haase will be attending.

Combatting ORC and related public safety concerns remain among WR’s top issues.

Registration is required for both in-person and virtual attendance. WR will announce registration details as soon as they become available.

Call to action: This is an opportunity for businesses to be heard. Those interested in being included in the task force email distribution list should contact the AG Policy Team at policy_team@atg.wa.gov.

Covington Chamber to host public safety and retail crime event

Robert Nelson, President of the Washington Organized Retail Crime Association, Covington Police Chief Adam Easterbrook, and WR Director of Communications Robert B. Haase will speak on public safety, retail theft, and organized crime on Thursday, March 9.

The Covington Chamber of Commerce is hosting the luncheon event from 11:30 am-1:00 pm at the Meridian Valley Country Club, 24830 136th Ave SE, Kent, WA 98042.

Attendees at the event will include business owners, law enforcement officers, loss prevention professionals, and Chamber members who will engage in a conversation about the growing issue of public safety and retail crime. The event’s format will help facilitate discussions on how the community can work together to address these issues and create a safer environment for customers and employees.

For more information, email Covington Chamber Executive Director Dana E. Neuts at info@covingtonchamber.org, or call (253) 329-0999. Register now.

Ergonomic workstations reduce injury risks

According to the 2020 study Impact of Computer Misuse in the Workplace, seven out of every eight workers have never had ergonomics training, while 78% suffered from eye strain while working on a computer. Therefore, computer workstation setup must focus on mitigating risks of wrist strains, eye strains, and back injuries.

Comfortable workers are productive workers! It’s vitally important to recognize that each person is different. Personal protective equipment usage increases when each worker can choose the types that fit them best. When workers participate in selecting their desks and chairs, it heightens their attention to ergonomics while demonstrating management’s care for their employees as individuals.

Methods to reduce eye strain while working at a computer workstation include:

Reduce screen glare by adjusting screen position, screen angle, and area lighting conditions. Consider installing an anti-glare filter on monitors.
Adjust computer settings for comfort. Adjustable computer monitor settings include contrast, brightness, text size, and color temperature.
Use the 20-20-20 rule. After 20 minutes of computer use, workers should look at something 20 feet away for at least 20 seconds.

Workers should maintain a proper posture to achieve optimal strength and efficiency while working at a computer. Attention to posture should focus on:

Keeping the back straight or slightly reclined
Positioning the thighs parallel to the floor
Keeping the neck in a neutrally upright position
Positioning elbows at a 90° angle
Working with wrists neutrally positioned

Washington L&I provides a free Office Ergonomics eTool to help set up ergonomic workstations in the home and office.

The RS Safety Library has additional information to help with ergonomics.

Our safety team is available to help members take their safety program from compliance to quality safety practices. Contact us 360-943-9198 x122, or safety@waretailservices.com.

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.