AN ORDINANCE concerning labor standards for certain employees.

BE IT ENACTED BY THE PEOPLE OF THE CITY OF EVERETT

Section 1. Findings.

1. The people of the City of Everett hereby adopt this citizen initiative addressing labor standards for certain employees for the purpose of ensuring that, to the extent reasonably practicable, people employed in Everett have good wages and access to sufficient hours of work.
2. The City of Everett is one of the largest job centers in Washington State, with thousands of shoppers and workers visiting daily to participate in the local economy.
3. The cities of SeaTac, Bellingham, Seattle, Renton, Burien, and Tukwila have enacted higher minimum wages than the state.

Section 2. A new Chapter is added to the Everett Municipal Code as follows:

NEW SECTION 1. Intent.

It is the intent of the people to establish fair labor standards and protect the rights of workers by: (1) ensuring that the vast majority of employees in the City of Everett receive a minimum wage comparable to employees in the cities of Renton, Tukwila, SeaTac, Burien, Bellingham, and Seattle; (2) requiring covered employers to offer additional hours of work to qualified part-time employees before hiring new employees to fill those hours; and (3) adopting enforcement requirements.

NEW SECTION 2. Large Employers Minimum Wage Requirement

20. Effective July 1, 2025, every large employer shall pay to each employee an hourly minimum wage of $20.24.
21. On January 1, 2026, and on each January 1 thereafter, the hourly minimum wage shall increase by the annual rate of inflation to maintain employee purchasing power.
22. By October 15 of each year, the City of Everett shall establish and publish the applicable hourly minimum wage for the following year using the annual rate of inflation.
23. For purposes of this chapter, the annual rate of inflation means 100 percent of the annual average growth rate of the bi-monthly Seattle-Tacoma-Bellevue Area Consumer Price Index for Urban Wage Earners and Clerical Workers, termed CPI-W, for the 12-month period ending in August, provided that the percentage increase shall not be less than zero.
24. An employer may meet its obligation under this section if the employer pays (1) the minimum hourly wage established in this section or (2) a combination of Washington state minimum wage under RCW 49.46.020 plus additional compensation, the total of which is equal or greater to the minimum hourly wage established in this section.

NEW SECTION 3. Other Covered Employers Shall Have a Phase-In Period.

Other covered employers shall phase in the new minimum wage, as follows:

1. Effective July 1, 2025, other covered employers shall pay employees not less than the hourly minimum wage established under NEW SECTION 2 minus Two Dollars ($2) per hour.
2. Effective July 1, 2026, other covered employers shall pay employees not less than the hourly minimum wage established under NEW SECTION 2 minus One Dollar ($1) per hour.
3. Effective July 1, 2027, and thereafter, all covered employers shall pay employees not less than the hourly minimum wage established under NEW SECTION 2.
4. An employer may meet its obligation under this section if the employer pays (1) the minimum hourly wage established in this section or (2) a combination of Washington state minimum wage under RCW 49.46.020 plus additional compensation, the total of which is equal or greater to the minimum hourly wage established in this section.

NEW SECTION 4. Coverage and Employer Classifications.

1. Covered employers must pay employees at least the minimum hourly wage established by this chapter for each hour worked within the City.
2. Employer classification for the current calendar year will be calculated based upon the average number of employees during all weeks in the previous calendar year in which the employer had at least one employee. For employers that did not have any employees during the previous calendar year, classification will be based upon the average number of employees during the most recent three months of the current year. In this determination, all employees who regularly work Washington will be counted, and including employees who worked in full-time employment, part-time employment, joint employment, temporary employment, or through the services of a temporary services or staffing agency or similar entity.
3. Employer classification for the current calendar year will be calculated based upon its gross revenue for the previous year. For employers that did not have gross revenue during the previous calendar year, an annualized gross revenue will be projected based on the gross revenue during the most recent three months of the current year in which the employer did have gross revenue.
4. For the purposes of employer classification, separate entities will be considered a single employer if they form an integrated enterprise or they are under joint control by one of those entities or a separate entity. The factors to consider in making this assessment include, but are not limited to:
5. Degree of interrelation between the operations of multiple entities;
6. Degree to which the entities share common management;
7. Centralized control of labor relations; and
8. Degree of common ownership or financial control over the entities.
9. There shall be a presumption that separate legal entities, which may share some degree of interrelated operations and common management, shall not be an integrated enterprise if the separate legal entities (1) operate in separate and distinct physical locations from one another, and (2) has a different majority controlling interest ownership.

NEW SECTION 5. Part-Time Employees Shall Have Fair Access to Additional Hours.

1. Before hiring additional employees or subcontractors, including hiring through the use of temporary services or staffing agencies, covered employers must offer additional hours of work to existing employees who, in the employer’s good faith and reasonable judgment, have the skills and experience to perform the work. Covered employers shall use a reasonable, transparent, and nondiscriminatory process to offer the hours of work to qualifying employees no less than three (3) days in advance of offering the hours to non-existing employees. At the end of this period, the covered employe may hire additional employees through any other means.
2. This section shall not be construed to require any employer to offer an employee work hours if the employer would be required to compensate the employee at time-and-a-half or other premium rate under any law or collective bargaining agreement, nor does it prohibit any employer from offering such work hours.

NEW SECTION 6. Retaliation Prohibited.

1. No employer or any other person shall interfere with, restrain, or deny the exercise of, or the attempt to exercise, any right protected under this chapter.
2. No employer or any other person shall take any adverse action against any person because the person has exercised in good faith the rights under this chapter. Such rights include but are not limited to the right to make inquiries about the rights protected under this chapter; the right to inform others about their rights under this chapter; the right to inform the person’s employer, union, or similar organization, and/or the person’s legal counsel or any other person about an alleged violation of this chapter; the right to bring a civil action for an alleged violation of this chapter; the right to participate in any investigation under or related to this chapter; the right to testify in a proceeding under or related to this chapter; the right to refuse to participate in an activity that would result in a violation of city, state, or federal law; and the right to oppose any policy, practice, or act that is unlawful under this chapter.
3. For the purposes of this section, an adverse action means denying a job or promotion, demoting, terminating, failing to rehire after a seasonal interruption of work, threatening, penalizing, retaliating, engaging in unfair immigration-related practices, filing a false report with a government agency, changing an employee’s status to nonemployee, decreasing or declining to provide additional work hours when they otherwise would have been offered, scheduling an employee for hours outside of their availability, or otherwise discriminating against any person because the person has exercised their rights under this chapter. An adverse action against an employee may include actions which impact any aspect of employment, including pay, work hours, responsibilities, or other material change in the terms and conditions of employment.
4. No employer or any other person shall communicate to a person exercising rights protected under this chapter, directly or indirectly, the willingness to inform a government employee that the person is not lawfully in the United States, or to report, or to make an implied or express assertion of a willingness to report, suspected citizenship or immigration status of the person or a family member of the person to a federal, state, or local agency because the person has exercised a right under this chapter.

NEW SECTION 7. Enforcement.

1. Any person or class of persons that suffers personal financial injury because of a violation of this chapter or suffers prohibited retaliation under this chapter, may bring a civil action in a court of competent jurisdiction against the employer or other person violating this chapter and, upon prevailing, shall be awarded such legal or equitable relief as may be appropriate to remedy the violation including, without limitation, the payment of any unpaid wages plus interest due to the person; and a penalty payable to any aggrieved party of up to $5,000 if the aggrieved party was subject to prohibited retaliation. For the purposes of this section, an aggrieved party means an employee or other person who suffers tangible or intangible harm due to an employer or other person’s violation of this chapter. The prevailing party in the civil action shall be awarded reasonable attorney fees and costs.
2. Before filing any private action for alleged violation of this ordinance, and employee or an employee’s representative must give the employer written notice that the employee has not been paid or received the Everett minimum wage no later than forty-five (45) calendar days before filing. This forty-five (45) day period is for the employer to investigate and cure, in full, any actual or agreed Everett minimum wage violation. The statute of limitations shall be tolled during these forty-five (45) days. If an employer fails to cure an alleged Everett minimum wage violation or disagrees that an Everett wage violation occurred, the employee or the employee’s representative may file a claim with the Washington State Department of Labor and Industries related to the alleged minimum wage violations under this chapter. An employee or employee’s representative must exhaust Washington State Labor and Industries’ administrative remedies before filing a private action.
3. Each covered employer shall retain records as required by RCW 49.46.070
4. Employers shall permit authorized City representatives access to work sites and relevant records for the purpose of monitoring compliance with the chapter and investigating complaints of noncompliance, including production for inspection and copying of employment records.
5. Complaints that any provision of this chapter has been violated may also be presented to the City Attorney, who is hereby authorized to investigate and, if they deem appropriate, initiate legal or other action to remedy any violation of this chapter.
6. The City has the authority to issue administrative citations and to order injunctive relief including reinstatement, restitution, payment of back wages, or other forms of relief.
7. The City may, in the exercise of its authority and performance of its functions and services, agree by contract or otherwise to participate jointly or in cooperation with Washington State or Snohomish County to enforce this chapter.
8. The remedies and penalties provided under this chapter are cumulative and are not intended to be exclusive of any other available remedies or penalties, including existing remedies for enforcement of Everett Municipal Code chapters.
9. The statute of limitations for any enforcement action shall be three (3) years.

NEW SECTION 8. Definitions.

For the purposes of this chapter, the following terms shall have the following meanings:

1. “Additional compensation” means tips received by the employee and reported to the Internal Revenue Service, money paid by the employer toward an individual employee’s medical benefit plan, and money paid by the employer toward an individual employee’s retirement savings account.
2. “Bonuses” means non-discretionary payments in addition to commission, hourly, piece-rate, or salary paid under an agreement by an employer to an employee.
3. “City” means the City of Everett.
4. “Commissions” means money paid to an employee upon completion of a task, usually selling a certain amount of goods or services.
5. “Covered employer” means an employer that either (1) employs at least 15 employees in Everett, or (2) has annual gross revenue over $2 million in Everett.
6. “Effective date” is the effective date of this ordinance.
7. “Employee” is defined as set forth in RCW 49.46.010.
8. “Employer” is defined as set forth in RCW 49.46.010.
9. “Employer classification” includes the determination of whether an employer is a covered employer and whether a covered employer is a large employer.
10. “Hour worked within the City” is to be interpreted according to its ordinary meaning, including all hours worked within the geographic boundaries of the City, excluding time spent in the City solely for the purpose of traveling through the City from a point of origin outside the City to a destination outside the City, with no employment-related or commercial stops in the City except for refueling or the employee’s personal meals or errands.
11. “Large Employer” means all employers that employ more than 500 employees in Washington regardless of where those employees are employed.
12. “Minimum wage” is defined as set forth in RCW 49.46.20 and includes all bonuses, commissions, piece-rate, and wages received by the employee and reported to the Internal Revenue Service.
13. “Other covered employer” means a covered employer that does not qualify as a large employer.
14. “Piece-rate” means a price paid per unit of work.
15. “Service charge” is defined as set forth in RCW 49.46.160(2)(c).
16. “Tips” means a verifiable sum to be presented by a customer as a gift or gratuity in recognition of some service performed for the customer by the employee receiving the tip.
17. “Wage” is defined as set forth in RCW 49.46.010; bonuses, commissions, and piece-rate are included in wages.

NEW SECTION 9. Rulemaking.

Within 180 days after the effective date of this chapter, the City shall adopt rules and procedures to implement and ensure compliance with this chapter The City shall seek feedback from worker organizations and covered employers before finalizing the rules and procedures.

Section 3. A new section is added to Chapter 5.04 of the Everett Municipal Code (EMC) as follows:

NEW SECTION. Labor Standards Noncompliance.

5. In addition to the grounds listed in section 5.04.080, The City Clerk, or designee, may deny, suspend, or revoke any license under this chapter based on a licensee’s failure to comply with the requirements of the new chapter created by this ordinance.
6. The City Clerk, or designee, must deny, suspend, or revoke any license under this chapter for repeated intentional violations of any requirement or right under the new chapter created by this ordinance.
7. Any action by the City Clerk, or designee, under this section shall be subject to the same appeal procedures that apply to the denial, suspension, or revocation of a license as applicable under this Chapter.

Section 4. A new section is added to Chapter 3.19 of the Everett Municipal Code (EMC) as follows:

NEW SECTION. Labor Standards Noncompliance.

3. In addition to the grounds listed in section 3.19.240, The director, or designee, deny, suspend, or revoke any license issued under the provisions of this Chapter based on a licensee’s failure to comply with the requirements of the new chapter created by this ordinance.
4. The director, or designee, must deny, suspend, or revoke any license under this chapter for repeated intentional violations of any requirement under the new chapter created by this ordinance.
5. Any action by the director, or designee, under this section shall be subject to the appeals procedure for the denial, suspension, or revocation of a business license as applicable under this Chapter.

Section 5. Other Legal Requirements.

This measure shall not be construed to preempt, limit, or otherwise affect the applicability of any other law, regulation, requirement, policy, or standard that provides for greater wages or compensation; and nothing in this ordinance shall be interpreted or applied so as to create any power or duty in conflict with federal or state law.

Section 6. Constitutional Subject.

For constitutional purposes, this measure’s subject “concerns labor standards for certain employers.” See Filo Foods, LLC v. City of SeaTac, 183 Wash. 2d 770, 783, 357 P.3d 1040, 1047 (2015) (upholding this statement of subject for an initiative that set a minimum wage and addressed employees’ access to hours).

Section 7. Election date.

In the event that the election on this measure takes place later than November 5, 2024, but before July 1, 2025, the initial minimum wage shall take effect as provided under this ordinance. If the election on this measure takes place on or after July 1, 2025, the minimum wage established by this ordinance shall take effect 30 days after the effective date of the ordinance.

Section 8. Severability.

The provisions of this measure are declared to be separate and severable. If any clause, sentence, paragraph, subdivision, section, subsection, or portion of this ordinance, or the application thereof to any employer, employee, or circumstance, is held to be invalid, it shall not affect the validity of the remainder of this ordinance, or the validity of its application to other persons or circumstances.