Association of Washington Business – Updated Weekly

Session concludes: In the final hours of the legislative session on Sunday, the Washington Legislature adopted a $77.8 billion two-year state budget. The budget, which includes roughly $9.4 billion in tax increases, passed mostly along party lines, with seven Democrats joining Republicans in opposition.

• Tax package: Lawmakers voted to raise B&O tax rates on Washington businesses, eliminate certain tax preferences, expand the capital gains tax, and extend the sales tax to a range of services, including advertising, temporary staffing agencies, and many technology and digital services.

• Spending increase: The new budget increases spending by $5.9 billion, or 8.2%, over the 2023-2025 budget, including about $1 billion in new spending. “Although the budget does assume significant savings, it doesn’t reduce spending on net,” Washington Research Council budget analyst Emily Makings writes. “Effectively, the budget shifts spending from previous priorities to new items.”

AWB joint statement: “These extreme tax hikes send the wrong message to employers: grow your business, and you’ll literally pay for it,” AWB and partners said in a joint statement. “At a time when job creators need certainty and support, the state is punishing growth and innovation.”

“These costs simply can’t be absorbed by businesses—they will be passed on to consumers in the form of higher prices for everyday goods and services,” said AWB President Kris Johnson.

What happens next: The budget heads to Gov. Bob Ferguson’s desk, who has until May 20 to take action. AWB is examining a range of options, including sending a veto request letter to the governor.

Thank you: AWB appreciates all the businesses who responded to AWB Action Alerts this session to share the employer perspective with lawmakers.

What just happened? Lawmakers adjourned Washington’s 2025 legislative on Sunday. AWB’s policy team is gearing up to give you a full review on the good, the bad and the ugly of the session in a free webinar at 11 a.m. Thursday.

Highlights and lowlights: Learn about the biggest bills that passed and how they may impact your business in the areas of tax and fiscal policy, employment law, energy, health care, transportation and more.

Member exclusive: The webinar is an exclusive no-cost service for our members.

Contentious bills pass: The Legislature passed over 400 bills in the 105-day session. AWB is disappointed to see two of the year’s most controversial bills, measures to extend unemployment insurance to striking workers and enact rent control, pass.

UI for striking workers: The Legislature gave final approval to a measure to allow striking workers to collect unemployment insurance benefits. Earlier this month, the Senate and House reached a deal to allow striking workers to receive up to six weeks of UI benefits.

• Veto request: AWB plans to send a letter to Gov. Ferguson asking he veto the entirety of the bill. AWB believes the policy is an inappropriate use of the unemployment insurance benefits, puts the health of the UI trust fund at risk, and threatens to increase the duration of labor strikes.

Rent control: A bill that enacts statewide rent control is also heading to the governor’s desk. The final bill limits annual rent increases to 7% plus inflation, or 10%, whichever is lower. AWB remained opposed to any bill this session with a rent cap, and believe such a policy will deter housing investment and push housing providers out of state.

Brights spots: AWB is pleased to see bipartisan bills that make important tweaks to the Climate Commitment Act and update Washington’s pay transparency law cross the finish line.

Learn more: AWB’s policy team will give a full rundown of these bills and more at our post-session webinar at 11 a.m. Thursday. Register here.

More tariff turmoil: AWB News is out with a new blog post sharing employer voices on the impacts of tariffs. We spoke with Carstens Inc., a home décor wholesaler in Burlington, whose owner said the family business is at risk of losing everything if broad new tariffs continue at the current rate.

“The loss of businesses and jobs as a result of these tariffs will be detrimental to all Washingtonians,” said Carstens, Inc. owner Michelle Parkinson.

Tariffs impacting business decisions: In response to tariffs, Washington businesses are delaying planned capital investments, raising prices, freezing hiring, and even considering layoffs. See the data from AWB’s spring 2025 employer survey.

Resources: The Washington State Department of Commerce recently launched the Tariff Information and Resource Guide, an online hub that includes tips to adjust to rapidly changing tariffs, webinars, training and other resources.

Share your perspective: Take AWB’s 2025 tariff impacts survey and tell us how tariffs are impacting your business.

This is your time: AWB lives by and for our members. One important way we connect with you is through regional meetings. We’ll be crossing the state over the coming months, coming to a community near you. We’d love for you to join us.

The latest info: AWB’s government affairs team will discuss important business-related issues including tax and fiscal, labor, environment, and more. This is an opportunity for the GA team to hear questions, concerns, and ideas you may have on legislative issues impacting your business. We will also be giving a 2025 legislative review to highlight important legislation affecting the business community.

Town to town: The regional meeting schedule and locations are still being finalized. Here’s the itinerary so far:

• Kitsap: Wednesday, April 30, 1 p.m. Kitsap Conference Center, 100 Washington Ave., Bremerton.

• Vancouver: May 28, 8 a.m. Greater Vancouver Chamber, 1111 Main St. Suite 201.

• Bellingham: May 29, 9 a.m. Location TBD.

• Bellevue: May 29, 4 p.m. (Tentative)

• Tri-Cities: June 4, 7:30 a.m. Tri City Regional Chamber of Commerce, 7130 W Grandridge Blvd, Kennewick.

• Spokane: June 5, 7:30 a.m. Greater Spokane Inc., 801 W Riverside Ave. Suite 200.

Join us: RSVP to AWB’s Elizabeth Carmona to reserve your spot and get details on the event location. We look forward to seeing you soon!

Worker Memorial Day ceremony: AWB joined state leaders and labor advocates last week at the Washington Department of Labor & Industries headquarters to honor 97 Washingtonians killed by workplace-related injuries and illnesses.

Heidi Bryan, the mother of 21-year-old Tyler Bryan, who died in a logging accident in 2014, addressed family members in the room who had lost loved ones that year. Gov. Bob Ferguson and AWB Government Affairs Director Emily Wittman also spoke, sharing personal connections to the importance of workplace safety.

“When rules are followed and rules are enforced, and employers want to follow the rules and enforce the rules, lives are saved,” Wittman said. “Your workforce is your family, and your family walks through the door at the end of the day.”

Kids Chance of Washington: AWB joins with other business and labor groups to fund scholarships for family members of those hurt or killed on the job. Learn more and donate at kidschancewa.org.

Last call for best price: If you’re planning to attend AWB’s Spring Meeting on May 14 in Vancouver, register now to lock in the $299 member rate and $349 for non-members before prices go up on Thursday. Click for the full agenda, which includes timely discussions on federal issues’ impacts, the economy, a legislative session recap and more.

Networking time: Connect with fellow attendees at our evening networking reception at the Hotel Indigo on the downtown Vancouver waterfront. Enjoy a special wine tasting experience from Barnard Griffin and enter to win a raffle for airline tickets.

International connection: Canadian Consul General Craig Weichel of the Seattle Canadian consulate office will be attending the Spring Meeting reception. This will be a unique time to connect with a top international leader and renew Washington’s longstanding and important trade ties with our northern neighbor.

Relaxation station: Book your complimentary 10-minute chair massage with LoDo Massage, presented by LifeWise Health Plan of Washington. Sign up here.

Where to stay: AWB’s room blocks are closed but nearby hotels are available.

TAX & FISCAL POLICY

Max Martin, AWB’s tax and fiscal policy director, has updates on the following bills:

• B&O tax increases: House Bill 2081, which increases B&O tax rates for Washington businesses, passed 50-48 in the House and 26-22 in the Senate. The bill increases the B&O tax rate for manufacturing, retailing, and wholesaling to 0.5% starting January 2027, while making changes to other rate categories. It also imposes a temporary B&O tax surcharge on businesses with taxable income over $250 million, raises the B&O surcharge for financial institutions, and increases the advanced computing surcharge. AWB opposed this measure and sent a letter to legislative leaders last week with concerns.

• Sales tax on services: Senate Bill 5814 expands the sales tax to a range of services, including advertising, IT services, custom website development, temporary staffing agencies and security. The bill passed the House 50-47 and the Senate 26-22. AWB also opposed this bill and believes it will burden small and medium-sized businesses, who rely on many of the service providers facing higher taxes under this bill.

• Capital gains tax and estate tax: Senate Bill 5813 increases the state's capital gains tax and estate tax. The existing 7% capital gains tax applies to gains above $270,000 on the sale or exchange of long-term assets including stocks, bonds and business interests. The proposal would add another 2.9% for gains exceeding $1 million. The bill passed 53-45 in the House and 27-21 in the Senate.

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EMPLOYMENT LAW

Lindsey Hueer, AWB’s lead on employment law issues, has updates on these bills:

• UI for striking workers: Senate Bill 5041, which allows striking workers to collect unemployment insurance benefits, gained final passage in both chambers by a largely partisan vote. The Senate and House reached a deal to allow striking workers to receive up to six weeks of unemployment benefits. AWB remains concerned that the bill will disrupt the balance at the bargaining table and lead to higher UI costs for all employers. We plan to send a veto request to the governor later this week.

• Self-insured employers/workers’ comp: Senate Bill 5463 has passed and is heading to the governor’s desk. AWB opposed this bill, which requires employers with self-insured workers’ compensation programs to adhere to the good faith and fair dealing standard. State law already functionally requires them to do that with Department of Labor and Industries' broad existing oversight. The bill passed with an amendment that makes the 3-strikes provision slightly better, allowing for a corrective action plan instead of automatic revocation of ability to self-insure.

• Pregnancy accommodations: Senate Bill 5217, which expands pregnancy-related accommodations for employees, passed both chambers and is on the governor’s desk. The bill requires all employers (current law is employers with 15+ employees) to provide accommodations to pregnant workers, including more frequent restroom breaks, ability to sit down, carry a water bottle, etc. The bill also requires additional accommodations for breastfeeding/lactating workers.

• Driver license requirement in job postings: Senate Bill 5501 has passed and was signed by the governor. The bill prohibits employers from including in a job posting a requirement that a worker possess a valid drivers' license, unless the job requires the individual to drive as part of their job duties.

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ENVIRONMENT

Peter Godlewski, AWB government affairs director for energy and the environment, has an update on the following bill:

• CCA fix bill: House Bill 1975, which makes important tweaks to the Climate Commitment Act, gained final passage with bipartisan support. The bill will help provide short-term price containment strategies for businesses under the Climate Commitment Act, as Washington works to link its carbon market with those in California and other areas. AWB thanks Reps. Joe Fitzgibbon, D-West Seattle, and Mary Dye, R-Pomeroy, for their work on this bill.

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EDUCATION, WORKFORCE and HEALTH CARE

Emily Wittman, AWB’s lead on workforce, education and health care, has an update on the following bills:

• Higher education scholarships: Senate Bill 5785, which makes changes to student eligibility for the Washington College Grant, has received final passage. AWB opposed this bill, which dramatically reduces grant awards for students to attend independent colleges. The bill limits students’ access to college education, forcing them to make up the difference in other ways. Several Democrats joined Republicans in voting against this bill.

• Cutting hospital funding: Senate Bill 5083, which caps the reimbursements that the state’s public employee insurance plans pay to hospitals for services, has passed and is heading to the governor’s desk. The bill was improved with amendments, but AWB still has concerns about the bill’s impact on hospitals and patient care.

• Pay transparency updates: AWB is pleased to see Senate Bill 5408, which makes key updates to Washington’s pay transparency law, gain final passage with bipartisan support. The bill aims to address a flurry of lawsuits filed in response to Washington’s pay transparency law. Under the bill, employers would have 14 days to correct a job posting after they are notified it does not include a salary range. This is an important fix that will preserve both pay transparency and protect employers from frivolous lawsuits. AWB is thankful to Sen. Curtis King, R-Yakima, and Rep. Mary Fosse, D-Everett, for their work on this bill.

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HOUSING

Morgan Irwin, AWB’s lead for transportation, housing, land use and technology, has an update on the following bill:

• Rent control: House Bill 1217, which enacts statewide rent control, is heading to the governor’s desk. A handful of Democrats joined Republicans in voting no. The compromise bill limits annual rent increases to 7% plus inflation, or 10%, whichever is lower in a given year. AWB is disappointed in the outcome and believes the policy will deter housing investment and push housing providers out of state. The bill also exempts new construction from rent control for 12 years — which is problematic because lenders in other markets have refused to underwrite loans for projects that aren’t free of rent control for at least 25 years.

WA lawmakers mourn a pair of deaths as session ends

The 2025 legislative session ended on a somber note with the sudden passing of Sen. Chris Gildon’s wife on Saturday, just a week after Sen. Bill Ramos died during a trail run on April 19. On the last day of session, the House began with a moment of silence for Gildon’s wife. In the Senate, lawmakers honored late senator Ramos, remembering his contributions and character.

“This has been a hard session for many reasons, especially with the loss of Sen. Bill Ramos, Sen. Chris Gildon’s wife Autumn, and former longtime Speaker Frank Chopp,” Gov. Bob Ferguson said. “I am grateful for the hard work and sacrifice of all who contributed to the timely completion of this legislative session.”

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Webinar recap: Connecting Students to Careers through the Washington Workforce Portal

The AWB Institute and the State Board for Community and Technical Colleges (SBCTC) hosted a webinar on April 16 focused on strengthening Washington’s workforce through the Washington Workforce Portal.

The Connecting Students to Careers webinar welcomed a panel of education and workforce professionals who shared practical strategies, real-world experiences, and the power of collaboration in expanding work-based learning (WBL) opportunities.

Read the full webinar recap and learn how you can get involved.

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Commerce hosting online feedback sessions

The Washington State Department of Commerce is hosting a series of online community feedback and listening sessions this spring. Sessions will be held via Zoom on April 29, May 7, May 12, May 23 and May 29. Learn more and register here.

Commerce also invites businesses and organizations to take its five-minute community feedback survey.

Time to shine: Help AWB recognize the top businesses in Washington in a wide range of 11 categories. Nominate now for AWB’s annual slate of awards, presented at our gala Evening of Excellence in November in Seattle. There is no cost to nominate or receive an award. Watch our quick “learn how to apply” video and make your nominations by May 31.

Become a bus tour stop: Nominating your company for the Manufacturing Excellence Awards is one of the best ways to be considered for the ninth-annual Manufacturing Week bus tour, which will visit shops floors in Western Washington Oct. 1-3 and facilities in Eastern Washington Oct. 6-8. Learn more in this 2024 tour video.

Check out the entire list of AWB’s award categories and nominate today!

Join AWB for free webinar at 11 a.m. on Friday, May 16 with Integrity Financial to explore how AWB’s retirement options and Pooled Employer Plan can meet the state’s retirement plan requirements and empower your business. Register here.

New law: Under a state law passed in 2024, your company must either currently offer a retirement plan or you will be required to auto enroll employees in the state’s WashingtonSaves program by 2027. You are required to participate if:

• You have been in business in Washington state for at least 2 years and maintain a physical presence here.

• You do not offer a qualified retirement plan to their covered employees who have had continuous employment of 1 year or more.

• You had employees working a combined minimum of 10,400 hours during the previous calendar year.

Alternative option: As an alternative to the state program, covered employers not currently offering a retirement program have the option of enrolling employees in a plan like AWB’s MyFuture 401k plans.

• Get ahead of the curve on compliance and learn about how you can offer a high-quality plan to your employees. With mounting pressure to offer competitive retirement benefits while managing complex compliance and rising costs, AWB’s MyFuture 401k program delivers a game-changing solution tailored to your needs.

• As part of the product mix, AWB offers a Pooled Employer Plan (PEP) 401(k) which significantly reduces administrative burdens, fiduciary liability, and leverages economies of scale for lower fees—freeing you to focus on production and growth.

Save the date and register now for the 2025 AWB Policy Summit, Sept. 16-18, at the Davenport Grand Hotel in Spokane. Save money and reserve your spot at the hotel with AWB’s discounted room block, giving you the best spot to enjoy Spokane without missing any of the action at Policy Summit.

Insights and expertise: AWB is inviting top state and regional leaders to speak with you at the Policy Summit, our biggest policy event of the year:

• Economist Matthew Gardner, who has been a popular and energetic speaker at a number of AWB events, will bring you the latest economic news and updates on the housing market. Stay tuned as we announce more speakers and panels.

• Watch video highlights of last year’s Policy Summit.

Amid all the uncertainty facing businesses today, one thing you can count on is having access to best-in-class service offerings through AWB. To help your company stay competitive, in compliance, and recruit the best and the brightest, AWB offers members products, including:

• High-quality health insurance

• Robust 401k retirement programs

• Workers’ compensation premium savings and safety services

• A comprehensive suite of ancillary benefits such as dental, vision, disability, and life insurance

What members say: “Being able to offer health benefits is extremely important to us. Our broker recommended HealthChoice 20 years ago, and it has been a great choice for us,” said Alta Group President David Haavik. “I have never heard a complaint from any of my employees in all these years.”

More information: Please visit AWB’s member services page.

“Washington is ranked 47th in the nation for affordability – we are almost the worst state in the country for affordability. This is a crisis, and it is absurd for any legislator to suggest that the largest tax increase in state history is not going to make that affordability crisis even worse.” ~ Steve Mullin, president of the Washington Roundtable, in a joint statement on the conclusion of the 2025 legislative session.