New Law “First Step” In Regulatory Relief for Washington Small Businesses

New Law “First Step” In Regulatory Relief for Washington Small Businesses
Governor Jay Inslee signed a bill into law this week which would better educate small businesses of their rights during a state agency inspection. Photo: John Mundy

In a move proponents say will reduce confusion and better equip employers, Governor Jay Inslee signed into law this week legislation that soon will afford Washington small business owners a measure of regulatory relief during state agency inspections.

HB 1352 would increase a small business owner’s understanding of their protections during a state agency inspection and work toward improving the visibility of those rights. The measure received strong bipartisan support in both chambers in Olympia.

“It’s tough out there to be a small business, especially when an unexpected audit or inspection happens,” State Rep. Andrew Barkis (R-2) said in an online statement. “Many small businesses don’t know what to do when a government agency comes knocking on their door. They often don’t understand what their rights are surrounding these types of actions.”

Barkis is prime sponsor of the measure, which passed unanimously in both chambers, and was signed into law by Inslee on May 8. “Today is a great day for small businesses around the state of Washington,” he added. “I want to thank Sen. Lynda Wilson…for her hard work on the companion bill, and for helping to champion this bill through the Senate. I’m proud our work shows small businesses their rights and protections matter.”

Under the existing Administrative Procedure Act (APA), state agency representatives must give a record of any broken laws found during an inspection and allow businesses one week to fix any issues before the state takes disciplinary action.

HB 1352 would require the State Departments of Agriculture, Ecology, Labor and Industries, Revenue, Security Employment and the State Fire Marshal to provide the Attorney General (AG) with copies of paperwork detailing an employer’s rights during those audits.

The AG would then evaluate those documents, the APA and any related laws to create a report of small business owners’ protections, including suggestions for improving the visibility of small business rights. Starting in October, the AG would then present the findings to state agencies and to relevant legislative committees in November.

Wilson: Adding Clarity For Small Business Owners

State Sen. Lynda Wilson (R-17) sponsored the companion measure, SB 5230, which passed the Senate unanimously but failed to receive a House floor vote.

“As a small business owner, I know the feeling of apprehension you get when the government shows up at your door unannounced. Why are they here? What are they looking for? Who do I contact to find that out?” Wilson wrote in an online statement. “This bill makes it very clear what rights you have as a small business owner and what rules the government has to follow.”

“There should be no surprises or ‘gotchas’ when it comes to the state’s rules for small businesses,” she continued. “Making Washington open for small businesses to start, grow and invest is crucial to a strong and growing economy. That starts by making the rules of the road crystal clear. This bill gets that job done.”

‘A Step In The Right Direction’

Business leaders consider the change vital for small business and a means to empower those employers.

“Small business are literally overwhelmed with government regulations,” Gary Smith, executive director of the Independent Business Association (IBA), told Lens. “The trick is to know what they are and how to comply with them. This bill is a step in the right direction to help small business understand what they need to do, how to do it and help protect their rights.”

Patrick Connor, Washington State Director for the National Federation of Independent Business (NFIB) agrees, and adds that unlike larger firms, “small business typically don’t have one particular person who is responsible for government compliance activities. Typically it is the owner that is trying to handle these types of requests along with other duties…often times small business owners feel disadvantaged in those situations.”

Connor told Lens the bill’s signing would be the “first step in a longer process” toward giving small businesses relief during an inspection. Before any substantial changes are implemented, it is important to account for existing laws and detail how state agencies recognize an employer’s protections and how they communicate those rights to the small business owner.

Once the AG returns with recommendations, stakeholders will then determine if there are any modifications needed to assist those employers in understanding their rights, Connor added.

The law will go into effect July 23, 2017.

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