With the New Year in full swing, it’s a good time to consider new laws that will take effect in 2012 (and to be reminded of some that remain in effect).
- Effect of Washington State’s new liquor law on local restaurants, bars, and craft distilleries.
- The annual adjustment of Washington’s minimum wage.
- New employment-related changes in Seattle.
- Requirement to post employee rights poster.
- Extension of tax rate for long-term capital gains and qualified dividends, along with a brief explanation of those terms.
Washington State Initiative Measure No. 1183
The initiative became effective as of December 8, 2011, but the Washington State Liquor Control Board (WSLCB) will be making the transition to private liquor sales and distribution throughout the next two years.
As of March 1, 2012 on-premise licensees, such as restaurants and nightclubs, can begin purchasing spirits directly from distillers and spirits distributors. The downside here is that until then, local craft distilleries have limited options for selling their liquor to the public. Since state liquor stores are no longer purchasing liquor from local distilleries, until March the distilleries are limited to making sales through their tasting rooms. (See WSLCB notices regarding Craft Distillers; and The Daily Herald and MyNorthwest.com’s coverage regarding this).
Washington State Minimum Wage Increase and Poster Changes
Effective January 1, 2012, Washington’s minimum wage increased to $9.04 per hour. The increase applies to both agricultural and non-agricultural workers. However, 14 and 15-year-old workers may be paid 85% of the adult new minimum wage, which comes to $7.68 per hour.
This increase comes as per Initiative 688, which was approved by voters in 1998. It requires the Department of Labor & Industries (L&I) re-evaluate and accordingly adjust the minimum wage every September based on cost-of-living under the federal Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
The CPI-W measures the average change in prices over time of consumer goods and services such as food, shelter, medical care, transportation, and other such living costs. In the past year, the prices for most consumer goods and particularly fuel rose. Washington is one of 10 other states that adjust the minimum wage in this way, and as of this year has the highest state minimum wage.
L&I also announced that while employers are still required to the post the “Your Rights as a Worker” poster, L&I shall no loner publish an additional poster just for minimum wage.
Addition of Paid Sick Time and Paid Safe Time to Seattle Municipal Code
City of Seattle passed an employment-related ordinance that sets minimum standards for the provision of paid sick and paid safe time. Ordinance No. 123698 is effective September 1, 2012.
Employees covered under the ordinance must either work in Seattle or perform more than 240 hours of work in a calendar year in Seattle. Employees here consist of traditional employees, temporary, workers, and part-time employees.
Employers will be required to notify employees of their rights under Title Chapter 14.16. Employers will also be required to retain for up to 2 years records documenting employees’ hours worked and paid sick and safe time both accrued and taken.
This paid sick and safe time is set forth based on a 3-Tier system that categorizes employers. Generally, most new businesses/employers that will be subject to this ordinance have 2 years from the hiring date of their first employee to comply. We hope to cover this in greater detail in the coming months along with any updates. (See here for Ordinance No. 123698 information).
National Labor Relations Board (NLRB) Poster Requirement
As of April 30, 2012, most private sector employers covered under the NLRA must post a notice that informs employees of their rights under the Labor Relations Act (NLRA). To see if your business falls under the NLRB’s jurisdiction and is required to post the employee rights notice, follow this link to the NLRB’s related FAQ page.
However, if your business was unsure about the posting deadline please note that the effective date for the notice-posting rule was originally set for November 14, 2011, then postponed until January 31, 2012, and now it has changed to April 30, 2012.
The poster is required to be 11 x 17 inches and can be in color or black-and-white. It is available for free through the NLRB via download on it’s website or paper mail by placing an order by phone or submitting an e-form. (See NLRB page here for details).
Extension of Long-Term Capital Gains and Qualified Dividends Tax Rates
This reduced tax rate continues for 2012. It remains at 0% for taxpayers in the 10% and 15% income tax brackets, and the maximum tax rate remains capped at 15%.
Personal tax rates remain for 2012. Also for 2012, the capital gains tax rates on long-term gains and qualified dividends remains at 0% for those in the 10% and 15% income tax brackets.
Long-term capital gains are capital gains on assets held for more than 1 year. Qualified dividends are ordinary dividends paid by a U.S. corporation or a qualified foreign corporation on stock that is held for more than 60 days during the 121-day period that begins 60 days prior to the ex-dividend date. To get more technical here, the ex-dividend date generally occurs two business days before the date (record date) on which a shareholder must be on record to receive a declared dividend. Shareholders will not partake in a dividend payment if the stock was purchased on or after its ex-dividend date. (See IRS Publication 550 and SEC explanation).