Association of Washington Business – Updated Weekly

Payroll tax draws strong opposition: Washington business leaders warned lawmakers last week that a proposed statewide payroll tax would discourage job creation and push investment out of state. Thank you to the many AWB members who signed in CON on House Bill 2100, sending a strong message to legislators.

Broad impacts: HB 2100 would impose a 5% payroll tax on private employers with workers who earn more than $125,000 per year. It would apply to companies with as few as 20 employees, with payroll in excess of $7 million and gross receipts of more than $5 million.

In his new role as president and CEO of the Seattle Metropolitan Chamber of Commerce, Joe Nguyen said the tax would reach far beyond large corporations, affecting businesses of many sizes and sectors, from grocery stores to health care providers.

Investment at risk: AWB’s recent employer survey already shows a shift toward investing and expanding out of state, amid worsening views of the state economy and cooling growth expectations. This bill would only accelerate that trend. “This bill impacts good-paying jobs and discourages employers from investing in Washington,” AWB President Kris Johnson said.

Small business perspective: Bryan Shull, owner of Trap Door Brewing in Vancouver, said rising taxes and costs are already making it harder to hire and grow. “Policies like this don’t create opportunity — they push it elsewhere.”

Read more in AWB News and business leaders’ joint statement opposing HB 2100.

Permitting reform: Lawmakers are considering a bill to bring greater transparency and accountability to state permitting and licensing. SB 5968 and HB 2198, which build on the success of Gov. Bob Ferguson’s Executive Order 25-03, require state agencies to publish permit and licensing data, set clear decision deadlines, and refund application fees if deadlines aren’t met. AWB News has details.

Both business and labor union leaders testified that the bill is an important step toward creating more predictable permitting timelines. “Unpredictable and inconsistent processing timelines have a real economic and personal impact on our businesses and on their employees,” AWB’s Emily Wittman testified.

The waiting game: AWB shared examples of how permitting and licensing delays impact businesses and communities — from a manufacturer waiting for a permit to build a new facility, a food truck trying to open, or long-term care center awaiting a license.

Moving in the right direction: Staff from the governor’s office and Department of Health shared notable improvements in processing times for permits and licenses — but emphasized there’s more work to do.

Your voice matters: AWB’s latest quarterly employer survey is open for just a few more days. This is your opportunity to share the issues that matter most to you and your business.

Useful tool: Your responses help us gauge Washington employers’ views of the economy, taxes, public policy issues, and more.

On TVW: AWB Vice President of Government Affairs Morgan Irwin shared the employer perspective on TVW’s The Impact last week, discussing tax proposals and other issues facing Washington businesses during this year’s legislative session. Watch the full segment.

“From everything that we’ve seen so far, it feels like we’re going the wrong direction,” Irwin said. “You can’t make things more affordable by making them more expensive. Washington already has an affordability crisis.”

• Payroll tax: Irwin said many Washington employers are increasingly looking to expand outside the state, reflecting growing pessimism about the economy. He warned that a new statewide payroll tax would further push growth out of Washington.

• Income tax: An income tax on high-earners has not been formally introduced, but an early draft raises many concerns — including whether it would apply to household rather than individual income, and how it could affect pass-through income from S corporations.

• Climate Commitment Act funds transfer: Irwin also addressed the governor’s proposal to divert $500 million in carbon auction proceeds. AWB, along with other groups, believes these funds should remain dedicated to clean energy and emissions-reduction programs.

EMPLOYMENT LAW

Updates from James Crandall, lead on legal affairs, labor & employment law:

• Notice requirements for grocery store closures: Senate Bill 6147, sponsored by Sen. Steve Conway, D-Tacoma, would require grocery establishments located in “food deserts” to give six months notice before closing a store. This bill would create an onerous requirement on businesses that are struggling to stay open. A hearing is scheduled for 10:30 a.m. Tuesday in the Senate Labor & Commerce Committee.

• 32-hour workweek: House Bill 2611, sponsored by Rep. Shaun Scott, D-Seattle, would reduce the standard workweek from 40 to 32 hours. This bill, modeled after San Juan County’s policy, would reduce productivity and force more employers to pay overtime, increasing pressure to move jobs out of state. The bill has a hearing at 10:30 a.m. Tuesday in the House Labor & Workplace Standards Committee.

• Workers’ comp rate transparency: House Bill 2188, sponsored by Rep. Suzanne Schmidt, R-Spokane Valley, would increase transparency around certain workers’ comp rate increases. This is a good bill to help reform the workers’ comp program and improve transparency. The bill has a hearing Wednesday in the House Labor & Workplace Standards Committee.

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TAX & FISCAL POLICY

Updates from Max Martin, tax and fiscal policy lead:

• Stopping frivolous lawsuits over marketing emails: AWB supports bipartisan legislation to repair the Commercial Electronic Mail Act (CEMA) to stop predatory lawsuits over promotional email subject‑lines. House Bill 2274 and Senate Bill 5976 narrows who can seek damages under the act and when a commercial email subject line is considered misleading. The Senate version is scheduled for a hearing at 8 a.m. Thursday in the Senate Business, Trade & Economic Development Committee.

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ENERGY & ENVIRONMENT

Updates from Peter Godlewski, AWB’s lead on energy, environment and water legislation:

• Data centers: Last week, employer leaders testified in opposition to House Bill 2515 and Senate Bill 6171, which would create new requirements for large energy-using facilities, such as data centers. This bill would restrict the ability to attract new data centers and create challenges for existing industrial customers. AWB’s Peter Godlewski testified that Grant County saw a 131% spike in tax revenue between 2005 and 2024 thanks to the data-center sector. Also testifying opposed was Tom Pierson, interim president and CEO of the Tacoma-Pierce County Chamber, who noted that legislation authorizing data center tax preferences has spurred economic development and job creation. Before the tax preferences were adopted, a data center in Puyallup sat vacant for 13 years, but thanks to a $200 million investments, tax dollars are returning to the local economy. The Olympian has more on the bill.

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EDUCATION & WORKFORCE

Updates from Emily Wittman, director for education, workforce, child care, health care & federal affairs:

• Expanding college grant eligibility: AWB supports bipartisan legislation that expands access to the Washington College Grant program. Senate Bill 6217, Matt Boehnke, R-Kennewick, and House Bill 2458, sponsored by Rep. Debra Entenman, D- Kent, allows students in nondegree credential programs to qualify for the Washington College Grant. This is a win for the students who enroll in certificate programs at community colleges and the employers who depend on those training programs.

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LAND USE & HOUSING

Updates from Ken Short, lead on transportation, land use and housing:

• City-owned grocery stores: House Bill 2313, sponsored by Rep.  Darya Farivar, D-Seattle, would allow cities to establish publicly owned grocery stores in underserved areas. AWB opposes this proposal because it allows government to compete directly with private businesses. The bill has a hearing at 10:30 a.m. Tuesday in the House Local Government Committee.

State Sen. Boehnke enters WA congressional race

State Sen. Matt Boehnke, R-Kennewick, announced Thursday that he is running for Congress. Boehnke, a cybersecurity expert, educator and retired U.S. Army lieutenant colonel, joins what is expected to be a very crowded field to replace retiring six-term U.S. Rep. Dan Newhouse in the 4th Congressional District, The Tri-City Herald reports.

Boehnke will forego reelection to the Legislature, setting up a race for his 8th District state Senate seat, the Washington State Standard reports. Among the candidates: Republicans Gabe Galbraith, president of the Kennewick School District Board of Directors, and State Sen. Nikki Torres, R-Pasco, who has been affected by court-ordered redistricting.

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Veteran Sen. Steve Conway to retire from the Legislature

After 34 years in the Legislature, Sen. Steve Conway, D-Tacoma, has announced that he will not seek reelection this fall. Described as a “liberal lion and unapologetic voice for labor,” Conway, 81, has represented the 29th Legislative District since 1993. After 18 years in the House, he won a Senate seat in 2010.

Conway served as a Fulbright fellow at the London School of Economics after college. He worked as a labor relations specialist for the United Food and Commercial Workers Union, Local 81, before entering elected office.

Democratic state Rep. Sharlett Mena, D-Tacoma, has announced that she will run for his Senate seat in this year’s election.

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Sen. Mark. Schoesler: Alarm is sounding on WA’s social insurance programs

Washington’s main social-insurance programs — paid family and medical leave, unemployment insurance and workers’ compensation — are facing severe fiscal trouble, state Sen. Mark Schoesler, R-Ritzville, writes in an op-ed in The Seattle Times. AWB shares these concerns.

The paid family and medical leave program is projected to face a $350 million deficit by 2029, while a decrease in the state’s unemployment insurance fund balance could potentially trigger a solvency tax on employers.

“If structural changes aren’t made soon to stabilize what has become an unsustainable program, it may go belly-up,” Sen. Schoesler writes of the paid family & medical leave program. “Legislators need to rein in the program’s excesses before it goes bankrupt. We must also ensure that any bill expanding the program is reviewed by the Legislature’s fiscal committees.”

Stay up-to-date, earn credits: AWB’s six-month HR & Employment Law webinar series kicks off Feb. 11 with a session on pre-hire, hiring and job descriptions. Over the six-part series, Washington’s top law firms will share practical guidance and legislative updates in the areas of handbooks, wage and hour, performance management, workplace safety and more.

Virtual training: Webinars will take place on Zoom at 10 a.m. PST on Wednesdays February through July. Each 90-minute session includes Q&A, plus a wrap-up package with slides, video links, and sample documents. View the full topic list and dates.

Bundle & save: Get the best value by purchasing the full six-month series. Individual webinars are also available for purchase.

Credits available: Earn HRCI, SHRM and CLE credits for each course.

Save the date: AWB’s 2026 Spring Summit returns to the Hilton Vancouver Washington, May 5-7. This can’t-miss annual gathering brings together employers from across the state for important conversations and connections. Stay tuned — we’ll be announcing a exciting keynote speaker in the coming weeks.

Stay tuned: Registration and room block will be opening soon.

Time to shine: Nominations for AWB’s 2026 awards program are open now! We recognize employers in 11 categories, from excellence in family-owned business and environmental practices to entrepreneur and employer of the year. Fill out the nomination form.

• Self-nominations are accepted and encouraged to recognize the quality in your own firm. We also have many nominations come in as employers recognize clients and partner firms.

As you plan your employee benefits for 2026, consider AWB’s HealthChoice Trust. More than 2,500 small employers participate, with 24 competitive, comprehensive benefit plan designs tailored to meet your needs. PPO plans provide 100% coverage for in-network labs, X-rays and diagnostics.

HealthChoice offers broad access to physicians throughout Premera Blue Cross’s extensive provider networks. Coverage is available to companies with as few as two employees in the following industries: agriculture, automotive services, construction, communications, hospitality, manufacturing, professional services, retail/wholesale, technology and transportation.

For a quote, talk with your insurance producer or visit our website at www.propointservices.com You can also contact Billy Sangster at ProPoint: 866.448.9577.

“I’ve had around 70 varieties of apples, and this just might be No. 1.” ~ Moses Henning, a junior at Washington State University, after tasting the new Sunflare apple. Henning, who has worked at an agritourism orchard since he was 16, was one of more than 50 people who lined up for a first taste of the new apple variety. The WSU-bred Sunflare is expected to hit store shelves in 2030.