Newsletter — January 18, 2024

IN THIS ISSUE

POLICY


ECONOMY


THE LOCAL FRONT


RETAIL THEFT & PUBLIC SAFETY


TRENDS


SAFETY

What we are tracking — WR Legislative Hot List


Washington Recycling and Packaging WRAP Act HB 2049

  • Focus: Defines 'producer' to place manufacturers at the top of the responsibility chart and retailers at a lower position, preventing retailers from paying for packaging and recycling for every item in their inventory.
  • Status: In committee waiting for a vote. Facing opposition from many stakeholders; WR expressed concerns that the proposed program is too broad and uncertain to adopt in a short 60-day Session.


Beverage Container Recycling HB 2144

  • Features: Similar to Oregon's long-time program; optional retailer take-back, mandatory redemption kiosks in larger stores.
  • Concerns: WR is concerned about kiosk requirement, Department of Ecology potentially biased oversight, and rural infrastructure challenges.
  • Status: In committee waiting for a vote.


Artificial Intelligence Bills SB 5838 / HB 1934

  • Progress: Senate version heard waiting for a vote; House hearing imminent. 
  • WR's Stance: More information is needed before the state begins regulating. Supports retail inclusion in a task force, seeks timeline extension; high-priority concerns. Believe a national solution would be preferable.


Fast Fashion Bills SB 5965 / HB 2068

  • Objective: Regulate fashion industry for supply chain transparency.
  • Opposition: WR strongly against, citing overreach and problematic global supplier obligations. Better served to debate at the federal level.
  • Status: Both bills heard, awaiting votes.


Personnel Records Bill SB 5924

  • Issue: Broad personnel records' definition, inclusion of Private Right of Action (PRA).
  • WR's Action: Testified against, collaborating to address concerns.
  • Status: Waiting for a vote.


Retail Career Grant Program SB 5958

  • Objective: Promote micro-credentialing opportunities in retail through college grants.
  • WR's Position: Strong support, aligns with workforce initiative.
  • Status: Hearing held, awaiting a vote.


Gift Certificates as Unclaimed Property HB 2095 / SB 5988

  • Objective: Unused gift card balances remitted to State after three years.
  • Concerns: Privacy issues, operational challenges; WR actively opposing.
  • Status: Hearings held – awaiting votes.


Consumer Protection on Gift Certificates HB 2094 / SB 5987

  • Proposed: Increase 'cash-back' limit, assign cash value to loyalty rewards, payment flexibility.
  • WR's Action: Actively engaged, sharing concerns in coalition.
  • Status: Hearings held – awaiting votes.

WR supports catalytic converter theft solutions


Mark Johnson, Sr. VP of Policy and Government Affairs weighed in on House Bill 2153, addressing catalytic converter thefts, prime sponsored by Rep. Cindy Ryu (D-32). The legislation seeks to increase penalties for those dealing in stolen catalytic converters and to have them marked, making them less attractive to thieves and easier for law enforcement to trace.

 

WR members, their customers, and employees are plagued with catalytic converter thefts of both their company and personal vehicles. When a vehicle loses its converter, it renders it inoperable. Not only is the victim out the cost of replacing the converter if they don't have comprehensive insurance, but they are also out the time lost waiting for repair and the value of vehicle use for business and personal activities, such as deliveries, picking up parts, or transporting goods. Particularly hard hit are smaller retailers that may only have one or two delivery vehicles.  Families with one car are also at a significant disadvantage when taking their children to school or traveling to and from work. These thefts are very disruptive.

 

HB 2153 will significantly deter these crimes and hopefully allow law enforcement and prosecutors to hold the thieves committing these crimes accountable. The legislation has received broad bi-partisan and stakeholder support.

 

One helpful provision that the Catalytic Converter Theft Task Force suggested was the establishment of a victims' fund to help defray the costs to small businesses and low-income individuals who suffer from these crimes.

 

WR encourages the legislature to approve  HB 2153 and thanks Rep. Ryu for bringing it forward.

WR opposes gift card legislation


Crystal Leatherman, Local and State Government Affairs has led the charge in strong opposition to the suite of bills Senator Trudeau (D-27) and Rep. Alvarado (D-34) introduced targeting Washington’s existing gift card laws.


HB 2095/ SB 5988 specifically target “abandoned” gift card balances as unclaimed property. The bill would require certain businesses to escheat gift cards to the Department of Revenue’s Unclaimed Property, which would then fund the state’s general fund.


HB 2094/ SB 5987 would alter current gift card practices, including changing the “cash out” provision from $5 to $50, require businesses to accept multiple forms of tender through their apps, and remove mandatory minimums on reloadable gift cards.


All four bills had committee hearings on Tuesday, January 16. WR and other business associations, industry partners, chamber of commerce, and concerned business owners testified in strong opposition.


Only HB 2095—unclaimed property—is scheduled for an executive session today, January 18, 2024, in the House Finance Committee. WR will continue meeting with legislators and following these bills very closely.

Senate hears bill to provide grants for retail-related credentials


Senator Boehnke’s proposal of SB 5958, will establish a grant program for low-income students pursuing retail-related micro-credentials. A 2023 report on the Washington retail workforce recommended improving career advancement opportunities with the stacking of credentials toward academic degrees. This bill provides the mechanism and potential funding to make this possible.


At the Senate hearing this week, WR testified in support of SB 5958, highlighting the importance of retail frontline workers. Retail is our state’s second-largest private employer sector, with nearly 400,000 employees. Nationally, 39% of frontline retail workers are people of color, and retail is the 4th largest private employer of immigrants. Retail jobs are often ideal transitional jobs for students or people needing part-time jobs. Retail jobs provide foundational skills and development opportunities for young people or second-chance workers who may not know their desirable career future.


The American Opportunity Index—an annual report that measures workers’ outcomes across 400 companies nationally—confirms the promising opportunities for retail frontline workers. In the category of hiring without requiring degrees, 17 of the top 50 companies are retailers. In the category of promotion from within, eight of the top 50 companies are retailers, such as Costco’s recent appointment of its new CEO, who started as a forklift driver. In addition, the Index shows that nine of the top 50 companies that promote equally regardless of race and gender are retailers.


At the hearing, Senators on the Higher Education and Workforce Committee were curious if the four RISE Up credentials are available in our colleges. WR shared that while some K12 CTE directors offer them, OSPI lists three out of the four credentials as Industry Recognized Credentials with federal funding to support access. This bill will provide funding access for students at the college level and for workers to receive funding and college credits upon completing them.

Adding “Protected class” to Equal Pay Act needs clarity and effective date delay


The Legislature is considering two companion bills HB 1905/SB 5894 by including the definition of “protected classes” to the Equal Pay Act (Act). Currently, only “women” is identified as a protected class under this Act with access to filing complaints with Labor and Industries or civil actions. 


WR testified to support the intent of Equal Pay Act and to include protected class because it aligns with the Justice, Equity, Diversity, and Inclusion principles that guide our operations and advocacy. We expressed concerns, however, regarding the broadness of “protected class” by simply referencing Human Rights Commission (HRC)’s protected class definition to the Act.


For example, the definition for "Disability" includes the presence of a sensory, mental, or physical impairment. Is “sensory” limited to the typical five senses or various neuro-sensitivity issues that are continuing to develop such as tactile difficulty or auditory processing? The definition also includes whether the condition “is perceived to exist whether or not it exists in fact.” This means an employee’s subjective belief that a “claimed disability” condition exists will provide the basis for filing a suit or a complaint regardless of facts.


The American Disability Act requires open interactive communication between employer and employees for accommodation. The definition in this bill means no communication is necessary to help employers know that their employees may be a “protected class.”  


To address the lack of clarity concern, WR proposed adopting Oregon’s protected class definition under their Equal Pay Act. Oregon’s protected class definition is “a group of persons distinguished by race, color, religion, sex, sexual orientation, national origin, marital status, veteran status, disability or age.” The keyword “distinguished by” adds the objective proof requirements for these classes. Using similar definitions for employers who often have employees in both Washington and Oregon will also help with compliance and implementation.


We also requested time for rulemaking to clarify the definition and to provide time for education. WR is pleased that Labor and Industries also made similar requests to delay the effective date to July 1,2025 to provide time for rulemaking and education.

Initiative to amend police pursuit laws sparks debate


In Washington State, the debate over police pursuit policies has intensified with Initiative 2113, a proposal to amend the state's restrictive pursuit laws. This initiative, backed by over 400,000 signatures, seeks to restore police authority to pursue suspects under more lenient conditions, a change from the current law that requires higher evidence standards of probable cause.


Supporters of Initiative 2113, including the grassroots campaign Let's Go Washington, argue that the current laws hinder law enforcement's ability to effectively curb crime. They advocate for a return to a 'reasonable suspicion' standard, believing it will enhance public safety by allowing police to more actively pursue suspects who pose a threat.


However, this initiative has faced opposition from groups like the American Civil Liberties Union of Washington and the Washington Coalition for Police Accountability, who argue that it could lead to dangerous high-speed chases, increasing risks to public safety. They maintain that the current law strikes a balance between safety and enforcement.


Despite these concerns, the initiative has gained legislative attention. The Washington Legislature now faces three options: adopt the initiative as law, reject it and let voters decide in November, or propose an alternative law to appear alongside Initiative 2113 on the ballot.


Rep. Chris Corry expressed disappointment over the House Democrats' rejection of a motion for a prompt hearing on I-2113, emphasizing the need to address public safety issues and respect the voices of the over 430,000 signatories. The initiative proposes a change in the law to allow vehicular pursuits based on reasonable suspicion of a law violation, necessity to apprehend the person, and if the person poses a threat to others.


As the debate continues, WR expects legislative support on this issue and encourages voters to engage with their legislators, particularly the House Community Safety, Justice, and Reentry Committee, to express their support on this critical public safety issue.

Positive finish to holiday season as consumer spending rises in December


The U.S. Census Bureau's data for 2023 shows a notable increase in core retail sales during the holiday season, reaching a record $964.4 billion, up 3.8% from 2022. This growth occurred despite challenges such as inflation and high interest rates, indicating a steady consumer market.


The 2023 holiday sales surpassed the previous year's record of $929.5 billion. The NRF forecast of a 3% to 4% increase was on target. While the growth rate was modest compared to the high spending during the pandemic years, it was consistent with the average annual increase of 3.6% seen from 2010 to 2019.


Online and non-store sales were a significant part of this growth, rising 8.2% to $276.8 billion. This reflects an ongoing trend towards online shopping, with 2023's online holiday sales totaling $255.8 billion.


Overall, 2023's full-year retail sales also showed growth, reaching $5.13 trillion, about a 4% increase over 2022. This steady growth suggests a stable consumer spending pattern.


In December 2023, retail sales increased by 0.7% from November and 3.3% year over year, according to NRF. The Census Bureau reported a broader increase of 0.6% from November and 5.6% year over year, including categories like autos, gas, and restaurants.


The holiday season saw increases in various retail categories, with electronics and appliance stores up 9.3%, health and personal care stores up 9%, and online sales up 8.2%. These figures indicate a healthy diversity in consumer spending across different sectors.


Overall, the 2023 retail sales data shows a solid performance in the retail sector, with significant growth achieved in a challenging economic environment, suggesting a positive trend in consumer spending and retail health.

Seattle’s new - “mandating minimum pay for delivery drivers law” takes effect


About 45 days after the City finalized its rules for the App-Based Worker Minimum Payment Ordinance, the new law took effect, triggering significant changes in how some of the covered app-based firms do business in Seattle.


While Mayor Bruce Harrell praised the law, members of the current City Council – which includes five new members – were not quoted in press accounts. With Councilmember Lisa Herbold’s retirement and Councilmember Andrew Lewis’s defeat, neither sponsor of the legislation (also known as “PayUp”) is now on the Council.


Three impacted companies have announced significant changes in how they will operate in Seattle. First, Shipt announced an indefinite “pause” in its operations in Seattle. Shipt will continue to operate normally in other Seattle-area cities. Next, Instacart said it would be adding new fees for customers, setting $0 as the default tip (a customer can add a tip manually), and barring orders from crossing Seattle city limits. In other words, customers in Seattle will only be able to order from stores in Seattle, and customers outside Seattle can only order from non-Seattle stores.


Lastly, DoorDash announced that it would impose a new $5 per order fee and eliminate programs that rewarded the best drivers. Both Instacart and DoorDash suggested that they could be instituting additional changes.


The new law mandates a minimum pay of $26.40 per hour plus $.74 per mile driven. This is well above the Seattle minimum wage of $19.94—the highest in the nation. The covered companies are concerned that the cost of the mandated compensation will discourage some Seattleites from ordering on their platforms, driving down sales in stores and restaurants and reducing the number of orders available for the app-based drivers to deliver.

National movement grows to tackle Organized Retail Crime


A nationwide push to combat organized retail crime (ORC) is gaining momentum in the United States, with Governors Kathy Hochul of New York and Gavin Newsom of California at the current forefront of this effort. ORC, characterized by highly coordinated theft operations, poses a significant threat to businesses, employees, and communities, prompting a united response to address the issue.


Traditionally, political parties have followed distinct approaches to criminal justice, with Republicans favoring stricter penalties and Democrats focusing on addressing underlying causes of crime like poverty and inequality. However, recent developments suggest a shift, as both parties unite to combat ORC.


Governor Hochul's plan includes legislation targeting those involved in ORC, online marketplaces, and third-party sellers contributing to the sale of stolen goods. Strengthening penalties for assaults on retail employees and creating two specialized task forces to dismantle organized retail theft rings and address smash-and-grab robberies are central to her strategy. Hochul also calls for increased funding for state police departments and district attorney's offices and proposes a tax credit to incentivize business owners to enhance store security.


Governor Newsom in California has allocated $1.1 billion over four years to enhance "safety and security," with a significant portion dedicated to combating organized retail theft. This includes grants for law enforcement agencies and support for district attorney's offices. Newsom's legislative proposals aim to target repeat offenders and professional thieves through increased penalties, modifications to the state penal code, and empowering law enforcement to arrest theft suspects.


Beyond state initiatives, at least nine states, including six in 2023, have passed laws imposing harsher penalties for organized retail crime offenses, signaling a national movement against this issue. However, questions remain about the effectiveness of punitive measures and their potential impact on marginalized groups.


Governors Hochul and Newsom's joint efforts signal a potential turning point in the fight against organized retail crime in the United States, challenging established party norms and fostering a critical debate on effective strategies to combat ORC while ensuring community safety.

The Future of Retail: A deep dive into the OfferUp® Recommerce Report 2023


The 2023 OfferUp® Recommerce Report unveils a significant shift in the retail landscape, with a growing emphasis on recommerce, extending beyond traditional clothing to a wide array of categories. This trend is marked by a notable 77% of secondhand transactions occurring in diverse sectors such as electronics, furniture, and auto parts, indicating a broad change in consumer preferences.


A key driver of this shift is the convenience and user-friendliness of online resale platforms, which are increasingly preferred over both traditional e-commerce and brick-and-mortar stores. These platforms are not only facilitating easier access to a variety of goods but are also perceived as more convenient than social media shopping channels.


The acceptance of secondhand items as holiday gifts is also on the rise, with a significant portion of consumers open to giving and receiving such gifts. This trend is largely fueled by economic motivations, as shoppers seek to find better deals and stay within budget, especially in the face of rising retail prices.


In addition, the report highlights a 27% increase in the number of recommerce sellers from the previous year, underscoring a growing interest in both the buying and selling of secondhand goods. This expansion is not just confined to the U.S. but is also evident in European markets.

Walmart teams up with Microsoft to revolutionize shopping with AI"


Walmart made its CES 2024 debut, partnering with Microsoft to unveil AI-powered shopping experiences. Walmart's CEO, Doug McMillon, revealed their plan to integrate AI across their digital platforms. The AI, driven by large language models, will merge Walmart's retail-specific search functions with Microsoft's Azure OpenAI service.


Accessible on mobile devices and their website, this AI offers innovative search features. Shoppers can now request product recommendations for specific occasions using natural language. After a search, algorithms curate a list of the most relevant items, challenging Google's SGE and Amazon's product listing program.


Beyond consumer applications, Walmart's AI initiatives aim to streamline employee tasks. Sam's Club, a Walmart subsidiary, will implement AI tools to verify customer purchases, eliminating the need for manual receipt checks.


Walmart teased 'Walmart InHome Replenishment,' an AI-driven service predicting replenishment needs for shoppers, building upon its 'InHome' program available to Walmart+ members since 2019.


Augmented reality will also play a role in Walmart's future shopping experience. 'Shop with Friends' offers social commerce, allowing shoppers to share virtual outfits with friends for feedback.


Lastly, Walmart expands its drone delivery testing program in Texas, offering 1.8 million more households access to 30-minute deliveries.


Walmart's CES 2024 appearance signifies a commitment to revolutionizing retail through AI and innovation, promising enhanced shopping experiences for consumers and more efficient tools for employees.

A collaborative approach to substance abuse policies


Effective January 1, 2024, employers are prohibited from discriminating against cannabis use off the job for job applicants. Employers can still perform drug tests based on their policies for employees, and safety-sensitive positions will remain exempt if disclosed before application. This makes it difficult for employers to hire the proper employees and can often cause concerns for overall safety, depending on the job.


This bill does not apply to any safety-sensitive positions for which being under the influence while working presents a substantial risk of death. Safety-sensitive positions must be identified by the employer before the applicant applies for employment. The law does not:

  • prohibit an employer from basing initial hiring decisions on scientifically valid drug screening conducted through methods that do not screen for non-psychoactive cannabis metabolites.
  • apply to testing for controlled substances other than pre-employment, such as post-accident testing or testing because of suspicion of impairment or being under the influence of alcohol, controlled substances, medications, or other substances; or
  • affect the rights or obligation of an employer to maintain a drug and alcohol-free workplace, or any other right or obligation of an employer required under federal law or regulation.


The landscape of policies and bills on the topic of substance abuse can be complicated to navigate for employers and companies. We at WR hope to assist you with any of your questions or concerns.


Additional resources:


Our safety team is available to help members improve their safety programs beyond compliance and toward quality safety practices. Contact us at safety@waretailservices.com or hrcall@waretailservices.com to learn more.

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