Labor union wants to tax Seattle employers—so unions can be paid to help workers file complaints against employers

Apr 27, 2016

One of the state’s most powerful labor unions is pushing a proposal that would increase taxes on Seattle employers, and a big chunk of those tax dollars would end up in union coffers.

The Service Employees International Union (SEIU) has filed an initiative that would establish a per-employee “head tax” paid by every employer in the city of Seattle.  The revenue generated by the new tax on employers would fund the city’s newly created Office of Labor Standards (OLS), which is charged with investigating and enforcing the city’s ever-growing list of labor laws, which currently include the $15 minimum wage, mandatory paid sick leave, criminal background and wage theft laws.

If city officials adopt proposals currently under consideration—restricting how employers schedule workers and mandating paid family leave—the OLS would enforce those laws also.

Under SEIU’s proposed employee head tax, half of the tax revenue generated would be siphoned into “community-based employee advocate organizations,” such as labor unions, to perform outreach to employees to educate them about their rights.  Forty percent of the tax would be earmarked to fund OLS enforcement of the city’s labor laws.  A paltry 10% would be designated for OLS to fund contracts to perform outreach and education to employers about their obligations under the city’s slew of new labor laws.

So employers would pay a per-employee tax, of which just 10% would be used to help them understand and comply with the city’s proliferating labor laws, while the other 90% would be used to encourage workers to file complaints against employers and investigate those complaints.  As if Seattle is not already anti-business enough.

SEIU is hoping the threat of a ballot initiative will pressure the Seattle City Council to pass the measure with legislation.  Some members of the city council have already said they support a head tax on Seattle's employers.  But if that doesn’t happen, the union says it is prepared to take the issue to voters in November.  

A per employee business tax is not a new idea.  In 2009, then-mayor Greg Nickels and the Seattle City Council voted to scrap the city’s employee head tax because they determined the tax was discouraging hiring and hurting Seattle’s business climate.  Fast forward seven years and a head tax is still a bad idea that would discourage hiring and hurt Seattle’s business climate.  Mayor Murray just launched an initiative to encourage private businesses to hire young people—a tax that punishes employers for hiring employees certainly won’t help that cause.

Even if you think a head tax is a good idea that won't discourage hiring or harm Seattle's business climate, the fact a labor union is pushing an initiative to create a new stream of tax revenue that would be funneled into that union deserves more attention.  A bad idea is one thing; an idea marked by self-interest that doesn't pass the smell test is another thing entirely.

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