Seattle considers business taxes to pay for investigating rule-breakers

SEATTLE — The Seattle City Council is considering doubling the staff of the Office of Labor Standards, to handle the large caseload of investigations into labor law violations.

To do so, the council would need to determine a source of revenue for the extra staff. While the mayor has suggested using the general fund, other ideas include reinstating an employee head tax, increasing business license fees, and increasing the business and occupation tax.

The city of Seattle put together the current staff of 11 people, to look into complaints against employers who may be violating one of Seattle’s four labor laws: paid sick and safe time, fair chance hiring, minimum wage and wage theft.

At the end of April, Mayor Ed Murray said that this office was handling 150 open investigations, with only seven of the 11 employees working on enforcement.

Murray said he wanted to double the staff and add another person to the city attorney’s office for this purpose. The expanded staff and programming, which includes outreach and education, would cost about $5.5 million next year, up from the current $2.2 million.

Murray has said he would want to use general funds for this purpose rather than creating a new source of revenue. He has already proposed an increase in the business and occupation tax for hiring more police officers.

Seattle City Councilmember Lisa Herbold said there should be more help for the staff investigating complaints. She said currently, investigators cannot meet the target deadline of completing cases within 180 days.

“The question that is unanswered is how much more funding, for what purposes, and from what source?” Herbold said.

In a committee meeting Tuesday morning, Herbold questioned whether the city could make the Office of Labor Standards a fee-based department, where collected fees support the enforcement activities.

She encouraged members of the community to voice their opinions to council members, before any decision is made during the next budget cycle.

The Seattle Metropolitan Chamber of Commerce told KIRO 7 that its membership feels one of the city’s fundamental roles is to enforce local laws and that the enforcement of other laws do not typically require a new tax on a specific part of the community.

David Jones, who owns Blazing Onion restaurants outside of Seattle and two Subway franchises within city limits, said more taxes would be damaging.

“Where does it end? Because it’s been hitting businesses left and right, with all the new things coming out,” Jones said.

Jones said he believes there may be some businesses out there violating city labor laws.

“I think that’s a legitimate issue. But I think they should be fined, and that’s where the money should come from, is the people who are abusing it. Because most of us in Seattle don’t do that. We are very careful with our employees, we’re a family; we don’t do that,” Jones said. “You’re kind of lumping us all in, and we get to pay for those bad apples.”

Since the Office of Labor Standards was established in 2015, the city has collected more than $9,000 in fines from employers, which were put into the general fund. Nearly $240,000 was also collected for workers.