Governor Bob Ferguson with WR staff and board members.

Washington Retail Association Board of Directors convenes in Olympia – February 13, 2025

The Washington Retail Association (WR) held its Winter Legislative Board of Directors meeting on February 13, 2025, in Olympia, Washington, bringing together a diverse group of retail leaders. The Board is made up of representatives from small main street retailers, regional Washington-based businesses, and multi-state retailers with a strong employment presence in the state.

Overview of the 2023/24 WR/RS Consolidated Financial Review

A key agenda item included a presentation by the audit manager of Johnson, Stone & Pagano, who provided a high-level review of the 2023/24 WR/RS Consolidated Financial Review. This annual review ensures that the WR maintains strong financial health, and a full financial audit is conducted every third year. The Board engaged in a thoughtful discussion, emphasizing the importance of transparency and continued prudent financial management.

Attorney General Nick Brown, Senator Adrian Cortes (D-18), Governor Bob Ferguson.

Guest Speakers: Attorney General Nick Brown and Governor Bob Ferguson

The meeting was especially noteworthy with the attendance of newly elected Attorney General Nick Brown and Governor Bob Ferguson, who both addressed the Board. AG Brown shared his primary focus areas and confirmed his support of the ongoing work of the Organized Retail Crime (ORC) Task Force, and ORC Unit which is now fully staffed with 10 personnel.

Governor Ferguson shared his top priorities, including his commitment to public safety, noting that Washington currently ranks last among states with the lowest number of law enforcement officers per capita, which he believes is unacceptable. The Governor also spoke candidly about the state's fiscal challenges and significant budget shortfall. The state's fiscal gap, estimated between $6.7 billion and $16 billion, results from a surge in state spending, outpacing revenue growth, and putting pressure on the state's ability to provide services.

Governor Ferguson highlighted the difficult budgetary decisions ahead, stressing the need for effective policy solutions to address priorities while balancing the state’s multi-billion-dollar budget deficit. The Governor’s remarks underscored the ongoing need for collaboration between state leaders and organizations like WR to support the state's priorities, particularly in public safety and the retail sector.

IN THIS ISSUE

ON THE LOCAL FRONT

• Governor Ferguson’s bold start: Prioritizing housing, public safety, and affordability
• Seattle City Council approves police use of “less lethal” weapons
• Amazon’s return-to-office mandate boosts downtown Seattle foot traffic

POLICY

• WR 2025 legislative priorities
• February 21 marks legislature’s first cutoff
• Retailers sound the alarm as concerning data privacy bill advances
• Fiscal note inconsistencies in the 2025 session must be addressed
• HB 1517: The wrong approach to digital equity
• Rulemaking notice: Retail alcohol product placement
• Proposed rulemaking mandates employer address updates; Public comment open
• Washington State plastic producer registration & reporting now open
• Annual reporting deadline for large refrigeration & A/C systems
• Exemption for small business & nonprofits from high salary thresholds
• Minimum wage hike and paid leave mandates face strong opposition
• House Labor Committee hears HB 1184 to address high overtime salary threshold
• Washington Fair Chance Act expansion raises employer concerns
• Organized Retail Crime bill proposes additional penalties for offenders
• Restrictive and punitive firearm legislation introduced
• Beverage Container Refund Program introduced in Washington
• Expanding Presumptive PTSD Coverage threatens workers’ comp stability
• AI Transparency and Disclosure bills advance

ECONOMY

• Washington State faces multi-billion-dollar budget deficit
• Retail sales slow in January, but economic growth continues
• Job growth slows but remains steady in January

RETAIL THEFT & PUBLIC SAFETY

• ORC Best Practices Report strengthens public-private partnerships
• Organized retail crime ring busted in Puget Sound

Washington Gov. Bob Ferguson is sworn into office by Washington Supreme Court chief justice Debra L. Stephens, right, during a joint legislative session in House chambers at the Washington State Capitol, Wednesday, Jan. 15, 2025, in Olympia, Wash. (AP Photo/Lindsey Wasson)

Governor Ferguson’s bold start: Prioritizing housing, public safety, and affordability

Governor Bob Ferguson hit the ground running in his first weeks in office, focusing on key priorities to improve the lives of Washingtonians.

A major initiative is tackling Washington’s housing crisis. Ferguson signed an executive order on his first day to streamline permitting and accelerate housing development, aiming to build 1.1 million new units over the next 20 years.

Public safety is another cornerstone of his administration. Washington ranks last in the nation for law enforcement officers per capita, and Ferguson is backing a $100 million bipartisan bill to help local governments hire more officers. His plan also includes funding to combat the fentanyl epidemic and gun violence.

Transportation is also a focus, with nearly $20 million allocated to strengthen the Washington State Ferry system, ensuring better service and crew retention.

Ferguson is advocating for universal free school lunches, which could save families up to $1,200 annually, and proposing $100 million to expand childcare affordability for small business employees. He also emphasizes increasing K-12 education funding.

As Ferguson’s administration takes shape, his commitment to bold action and bipartisan solutions remains clear. Read more at governor.wa.gov.

Seattle City Council approves police use of “less lethal” weapons

The Seattle City Council voted 6-3 to eliminate restrictions on the use of “less lethal” weapons, including blast balls, pepper spray, and tear gas, under limited circumstances. These restrictions were originally imposed after the 2020 murder of George Floyd.

This action by the Council clears the path to end 12 years of federal court oversight under a 2012 consent decree. The decree was implemented after a U.S. Department of Justice investigation found that Seattle police used excessive force in 20% of arrests.

U.S. District Court Judge James Robards had required the city to implement a policy for using less lethal weapons to maintain crowd control. The city and the Department of Justice’s Civil Right Division are expected to file a joint motion in the near future to dissolve the settlement agreement of the consent decree.

Under the new ordinance, less lethal weapons may only be used when activities “are occurring or about to occur” that pose a risk of imminent physical harm or significant property damage. Tear gas and blast balls are prohibited unless the mayor declares a state of civil emergency. Additionally, the police chief must authorize the use of blast balls after an emergency declaration. 

The Seattle Police Department must submit an annual report to the Council detailing its use of these weapons.

Amazon’s return-to-office mandate boosts downtown Seattle foot traffic

During the first month of Amazon’s mandate for workers to return to the office five days a week, a report by the Downtown Seattle Association found a significant jump in foot traffic on Mondays and Fridays - previously the most popular remote work days.

Compared to December, the Amazon-focused Denny Regrade and South Lake Union neighborhoods saw 22% greater foot traffic, a jump of 36% over January 2024. The weekday average of 46,000 people in those neighborhoods still represents only 74% of the average in January 2019.

Across all downtown neighborhoods, foot traffic rose by 9%, bringing overall activity to 57% of pre-pandemic levels.

Jon Scholes, President and CEO of DSA, highlighted the positive impact of Amazon’s return-to-office policy, noting that “[c]offee shops are full, lunch spots are buzzing and there’s more activity in the area."

WR 2025 legislative priorities

Washington’s economy has demonstrated resilience, yet uncertainty remains. Each legislative session, hundreds of state bills directly impact the retail sector. WR’s Policy and Government Affairs team collaborates closely with retailers to advocate on their behalf. Although federal initiatives may capture headlines, it is often state legislation that has the most significant effects on the industry. As the leading voice for retailers in Washington State, WR is committed to championing policies in the 2025 legislative session that foster stability, safeguard businesses, and support the growth and success of retailers and their employees.

WR’s 2025 legislative priorities include the following issue areas: 

• Artificial Intelligence 
• Environmental Regulations 
• Public Safety, Retail Theft, & Organized Retail Crime 
• Taxation, New Revenue, & Spending 
• Employment Law 
• Consumer Protection 
• Controlled Substances 
• Fair Enforcement & Regulation 

WR 2025 Legislative Priorities 

February 21 marks legislature’s first cutoff

Friday, February 21, marks the first legislative cutoff, meaning all bills must be voted out of their original committees. To advance, a bill must have had a hearing and received a committee vote. Bills with financial implications must also pass through a fiscal committee by February 28.

Following committee approval, bills move to the Rules Committee, which acts as a filter before they reach the full legislative body. The House Rules Committee is chaired by the Speaker of the House, while the Senate Rules Committee is led by the Lieutenant Governor. Only bills selected and voted out of these committees proceed to the floor for debate.

Once on the floor, the House Speaker or Senate Majority Leader decides when a bill will be debated and voted on by the full chamber - 98 members in the House and 49 in the Senate. Typically, a bill is only brought to a vote if it has enough support to pass. If approved, the bill moves to the opposite chamber, where the process begins again. The deadline for bills to pass their chamber of origin is March 12.

The 2025 Legislative Session is scheduled to adjourn on April 27, the 105th day of the session. The only bill the Legislature is required to pass and send to the Governor is the two-year Operating Budget, which covers the state’s fiscal cycle from July 1 to June 30 each year.

Retailers sound the alarm as concerning data privacy bill advances

Despite widespread opposition from retailers, small businesses, and industry groups, HB 1671 has advanced out of the House Technology, Economic Development, and Veterans Committee. While a few amendments were adopted, they fail to resolve the bill’s core flaws, leaving businesses with unclear compliance mandates, excessive legal risks, and an unworkable regulatory framework that hinders retailers’ ability to serve their customers.

This bill lacks meaningful regulatory oversight, diverges sharply from existing privacy laws in other states, and undermines consumer choice by severely restricting first-party data use. Instead of establishing balanced, enforceable privacy protections, HB 1671 opens the door for opportunistic lawsuits, allowing bad actors to exploit enforcement for financial gain rather than genuine consumer protection.

WR remains firmly opposed to HB 1671 and will continue advocating for a privacy framework that protects consumers without punishing Washington businesses. Lawmakers must work with stakeholders to craft clear, effective, and fair privacy policies that safeguard both privacy and economic growth.

Fiscal note inconsistencies in the 2025 session must be addressed

The fiscal note process in the Washington Legislature is intended to estimate a bill’s financial impact on the state budget before a vote. However, in the 2025 session, this process has been applied inconsistently. Some bills move forward without fiscal notes, others receive notes only after committee votes, and some are incomplete, omitting key components necessary to capture the full impact on all state agencies.

For example, HB 1308 expands personnel record requirements and imposes a private right of action on employers who fail to respond within 21 days. Its fiscal note masks a $4.45 million cost to public agencies by incorrectly categorizing requests under the Public Records Act, granting them “good faith” lawsuit protection. This discrepancy unfairly penalizes private employers while shielding public entities.

Similarly, HB 1707, which would provide presumptive Post-Traumatic Stress Disorder (PTSD) workers’ compensation coverage for correction officers, includes an incomplete and underestimated fiscal note. WR testified before the House Appropriations Committee that this note lacks several key components found in a similar bill (SB 6214, 2018) for law enforcement officers and firefighters (LEOFF). Notably, correction officers would be eligible after just 90 days of service, compared to 10 years for law enforcement, yet the projected cost fails to account for this broader eligibility.

These inconsistencies must be addressed to ensure that legislative proposals accurately reflect financial impacts and fairly distribute burdens.

HB 1517: The wrong approach to digital equity

The Washington Legislature recently held a public hearing on HB 1517, which proposes a $2 tax on smart wireless devices over $250 to fund digital equity programs. While the WR and our members support efforts to close the digital divide, this bill takes the wrong approach.

Key Concerns with HB 1517

• Overly Broad Scope – The bill defines "smart wireless devices" too broadly, capturing a wide range of products beyond what is necessary.
• Unfair Burden on Retailers & Consumers – The tax disproportionately targets retailers and their customers, creating an uneven playing field.
• High Compliance Costs – Retailers would face significant administrative challenges in tracking, SKUing, and taxing qualifying devices.

WR, alongside a coalition of industry groups, testified in strong opposition, arguing that if digital equity is a legislative priority, it should be funded through the state budget, not an arbitrary tax that increases costs for businesses and consumers.

WR will continue to monitor the bill’s progress.

Rulemaking notice: Retail alcohol product placement

The Washington State Liquor and Cannabis Board (LCB) will be seeking input from businesses, especially retailers, on upcoming rulemaking regarding Retail Alcohol Product Placement. This is critical for retailers to engage directly and shape the rules that will impact store layouts, product placement, and compliance requirements.

What’s Happening?

LCB is evaluating new regulations focused on where alcohol products can be displayed in retail stores. Key areas of concern include:

• The placement of alcohol on end caps
• Products near store exits
• Cross-category product placements, ensuring alcohol is not displayed near items marketed toward children

The board acknowledges the unique challenges faced by retailers, particularly those with limited space, and is actively seeking feedback from the industry.

LCB has outlined a tentative timeline for rulemaking:

• March & April: Stakeholder engagement
• Late May: Proposed rules (CR 102) released
• July: Public hearing
• September: Final rules adopted

To inform their decisions, LCB is looking at best practices from Illinois, Michigan, and Virginia, as well as recommendations from the Distilled Spirits Council.

Why This Matters to You

These regulations will directly affect store operations, requiring potential layout changes and new compliance measures. While WR will be engaging with LCB on behalf of our industry, we strongly encourage retailers to participate directly where possible.

Next Steps

Stay tuned for updates as we engage with LCB. In the meantime, we encourage you to review the LCB rulemaking page here.

Proposed rulemaking mandates employer address updates; Public comment open

The Employment Security Department (ESD) has proposed a new rule requiring employers to notify the Department of any address changes within 30 days. While employers are already required to maintain up-to-date records under RCW 50.12.070, the current rules do not explicitly state this requirement. This rulemaking aims to clarify the obligation and ensure compliance.

Employers and stakeholders are encouraged to review the proposed rule language and provide feedback. Written comments can be submitted to esdgpuirules@esd.wa.gov or mailed to Stephanie Frazee, Legislation and Rules Coordinator, at ESD’s Olympia office.

A public hearing via Zoom will be held on March 27, 2025, at 10:00 AM PST for verbal comments. Employers can join using Meeting ID: 846 3081 0093 and Passcode: 537428. 

All comments must be submitted by March 27, 2025. Please reference "Employer address change" in all correspondence.

Washington State plastic producer registration & reporting now open

The 2024 registration and reporting cycle for plastic producers in Washington State is now open. All producers of covered products must register by April 1, 2025, regardless of whether their post-consumer recycled content (PCRC) requirements have taken effect.

Workload Analysis Open for Comment

The annual Workload Analysis (WLA), which outlines Ecology’s projected expenses and helps determine annual producer fees, is open for public comment until March 3, 2025.

Key FAQs for Producers

• Covered Product Sizes: Household cleaning and personal care product containers between 8 oz and 5 gallons are subject to reporting requirements.
• Producer Fees: Invoices are issued after registration reviews, typically in May. All covered producers pay annual fees, with additional penalties for non-compliance.

Registration vs. Reporting

• Registration: All producers must register annually, even if PCRC minimums do not yet apply. 
• Reporting: Producers selling covered products must report resin totals for the prior sales year if they are subject to PCR requirements.

For more details and recorded information sessions, visit the Plastic Producer Registration & Reporting webpage.

Annual reporting deadline for large refrigeration & A/C systems

The deadline for the 2025 annual report is fast approaching! Businesses with refrigeration or air conditioning systems containing 1,500 pounds or more of refrigerant that began operation before January 1, 2024, must submit their report by March 15, 2025.

To assist with the process, drop-in Office Hours are available on: 

• February 20, 27 | March 6, 13 (2:00 – 3:00 p.m. PST)
• Access the meetings via the Hydrofluorocarbons (HFC) webpage or the Office Hours meeting link.

Key Reporting Insights: 

• Use the RAMP platform to review and update facility details, report refrigerant usage, and log service events.
• Only equipment 1,500+ pounds requires reporting this year; medium-sized units (200–1,499 pounds) begin reporting in 2027.
• Registration for medium-sized systems starts in 2026, with inspection requirements beginning in 2026 for medium and 2028 for small systems.

For additional guidance, access the RAMP user guide, the HFC rule guidebook, and the Refrigerant Management Program webpage.

Missed a session? Catch up with key takeaways from our latest Office Hours recap on the HFC webpage. Don’t wait. Ensure compliance before the deadline!

Exemption for small business & nonprofits from high salary thresholds

State overtime exempt salary rules have negatively impacted workers in their work hour flexibility, training and promotion opportunities. Since the new rules’ implementation in 2020, the minimum salary threshold has risen by 93%, compared to just a 21% increase in the minimum wage. These high salary thresholds have also jeopardized the ability of nonprofits and main street small businesses to meet their communities' needs.

A January 15 public hearing was held in the House (do we know the name of the committee) on HB 1184 This legislation would provide a narrow exemption from overtime provisions to ease the burden for small businesses with less than 50 employees and certain nonprofits with fewer than 50 FTE at each location.

The hearing from Wednesday, January 15, can be watched here.

Minimum wage hike and paid leave mandates face strong opposition

This week, the House and Senate held hearings on HB 1764 / SB 5578, which propose raising the minimum wage to $25/hour by 2031, with an average 7% annual increase starting in 2026. The bills also mandate 2.3 hours of paid vacation for every 40 hours worked and five (5) days of bereavement leave per event, effective 2028. Employers’ ability to manage leave remains unclear until L&I issues rules.

WR and employers across industries testified in strong opposition, citing several concerns:

• Disproportionate Rural Impact: The bills rely on Puget Sound wage data, ignoring disparities in rural areas.
• Inflationary Effects: Higher wages could drive inflation, reduce hiring, cut hours, and force layoffs or closures, disproportionately affecting low-income families.
• Job Losses: A 2024 Colorado study, (Weighing Minimum Wage Increases Across Boulder County), found similar measures would cause 4–12 job losses for every one person benefiting by 2030, with 90% of lost jobs affecting workers under 25. Retail labor costs would rise 7.6%, forcing closures.
• Uncertain Leave Management: The mandates give rulemaking authority to L&I without clear guidelines, causing operational challenges, especially for essential services like auto repair and tire retailers.

WR urges legislators to focus on easing small business burdens, improving childcare affordability, and curbing inflationary pressures rather than advancing these harmful proposals.

House Labor Committee hears HB 1184 to address high overtime salary threshold

The House Labor & Workplace Standards Committee recently heard testimony on HB 1184, a bill designed to alleviate the burdensome overtime-exempt salary requirements affecting nonprofits and small businesses. Advocates, including the Nonprofit Association of Washington and chambers from across the state, highlighted how the Labor & Industries (L&I) rules have forced organizations to alter service models, harming communities and demoralizing staff by converting directors to hourly positions.

In January 2020, L&I introduced rules significantly increasing the salary threshold for overtime exempt employees. Since then, the threshold has risen by 93%, far outpacing the 21% increase in the minimum wage during the same period. If the current multiplier schedule remains unchanged, the threshold is projected to increase by another 40% by 2028, assuming a 3% annual minimum wage rise.

WR testified in support of small and main street retailers, emphasizing that the high salary threshold stifles innovation, creates barriers, and fosters inequities for entrepreneurs seeking to address unmet needs.

Changing these rules will be challenging, as many House Labor Committee members represent King, Pierce, and Snohomish counties, where the impact of the rules has been less severe. Success will require strong grassroots advocacy to influence the majority party’s stance.

Washington Fair Chance Act expansion raises employer concerns

Washington’s Fair Chance Act could see significant expansion under HB 1747, a proposed bill that further restricts employers from considering criminal records in hiring decisions. The legislation prohibits taking adverse action against applicants or employees for failing to disclose a criminal history before receiving a conditional job offer.

Key Changes Under HB 1747

• Employers may only consider adult conviction records—arrest records and juvenile convictions cannot be used.
• Before taking adverse action, employers must:
• Provide written documentation of the legitimate business reason for the decision.
• Allow at least two business days for the individual to respond, correct inaccuracies, or provide evidence of rehabilitation.
• Increased Penalties & Enforcement:
• The Attorney General’s Office (AG) will oversee enforcement, with legal actions possible to recover unpaid wages, penalties, damages, and attorneys’ fees.
• This bill prohibits employer retaliation for employees who file complaints.
• The AG may issue warnings for first-time or minor violations. However, fines escalate for repeat offenses:
• $1,500 for a first violation
• $3,000 for a second violation
• $15,000 for each additional violation

WR testified at this week’s hearing, raising concerns about the bill’s impact on small businesses. Increased penalties and legal risks could disproportionately affect employers with limited compliance resources, leading to unexpected lawsuits and hiring challenges.

Instead of increasing restrictions and penalties, WR urges lawmakers to connect employers with workforce organizations that help justice-impacted individuals find jobs. A collaborative approach would ensure real second chances without discouraging employers from hiring.

Organized Retail Crime bill proposes additional penalties for offenders

HB 1276, which increases penalties for high-dollar organized retail crime (ORC) offenders, was heard Monday in the House Community Safety Committee. The bill is sponsored by Rep. Mari Leavitt (D-28 University Place) and co-sponsored by Rep. Dan Griffey (R-35 Allyn).

HB 1276 proposes additional penalties for ORC offenders: an extra 12 months for those who steal $20,000 or more and an additional 24 months for those who steal $50,000 or more. 

Retailers' top priority is ensuring a safe working environment for employees and a secure, enjoyable shopping experience for customers. ORC crime rings are becoming increasingly aggressive and dangerous, often resorting to threats, violence, and, in extreme cases, resulting in fatal incidents. These crimes are highly organized, premeditated, and frequently involve multiple accomplices. Unlike crimes of poverty or opportunity, ORC operations are structured to resell stolen goods and fund other criminal activities, including money laundering, drug smuggling, weapons trafficking, prostitution, child exploitation, and even terrorism. ORC is a growing issue at the state, national, and international levels.

Additionally, ORC results in billions of dollars in losses for retailers, leading to higher prices and product shortages for law-abiding consumers. This also translates to millions of dollars in lost tax revenue for local and state governments.

ORC crime rings are highly responsive to changes in laws and enforcement strategies. Evidence shows that increasing penalties and establishing felony thresholds can significantly reduce large-scale retail theft.

While HB 1276 is a valuable tool for law enforcement, prosecutors, and retailers, it is not a standalone solution to ORC and retail theft. A comprehensive approach is necessary, one that includes resources for local governments to attract and retain defense attorneys, prosecutors, and law enforcement. Additionally, access to treatment programs for individuals struggling with substance addiction and mental illness is crucial, as many of these individuals are exploited by ORC rings to commit theft on their behalf.

WR supports these efforts and commends the Legislature and Governor for prioritizing public safety this session.

Restrictive and punitive firearm legislation introduced

Following the passage of HB 2118 in the 2024 session—which restricted the sale of firearms—the 2025 legislative session has already introduced a series of new regulations, requirements, and taxes targeting the legal sale and possession of firearms.

The proposed bills include:

• HB 1163: Restricting the sale, transfer, and possession of firearms.
• HB 1132: Prohibiting bulk purchases of firearms and ammunition.
• HB 1152: Establishing strict storage requirements and associated penalties for firearms.
• HB 1386: Instituting an 11% tax on the sale of firearms and ammunition.
• SB 5099: Adding new compliance requirements for firearms dealers.

While these measures aim to prevent firearms from falling into the hands of criminals, a vital goal, the proposals are not supported by data. For example, less than 2% of all stolen firearms are sourced from licensed dealers. Imposing additional regulations, penalties, and taxes on law-abiding firearm dealers is unlikely to address the root causes of gun-related crime.  

Instead, lawmakers should prioritize measures like HB 1139, which increases penalties for unlawful firearm possession. This bill, currently awaiting a hearing in the House Community Safety Committee, directly targets criminal behavior without penalizing responsible gun owners and dealers.

WR is actively collaborating with stakeholders to craft balanced legislation that effectively addresses public safety concerns while respecting the rights of law-abiding citizens to protect themselves and engage in hunting and other lawful activities.

Beverage Container Refund Program introduced in Washington

Senate Bill 5502, sponsored by Senator June Robinson (D-38), and its companion, House Bill 1607, introduced by Representative Monica Stonier (D-49), aim to establish a beverage container refund program similar to Oregon’s bottle recycling initiative. SB 5502 received a hearing in the Senate Environment Committee on Wednesday, during which WR provided testimony.

WR, in collaboration with its Extended Producer Responsibility (EPR) Workgroup, has worked extensively with stakeholders to refine the bill’s language. The goal is to ensure the program can be implemented effectively while minimizing legal challenges and mandates. One key addition to the bill is the following provision:

“While retail establishments may choose to host a redemption site, nothing in this chapter shall be interpreted to create a legal obligation on the part of a retail establishment to either accept a returned covered beverage container or allow a redemption site to be sited at a retail establishment.”

Concerns have been raised about the potential impacts of a beverage container refund program on other packaging recycling initiatives currently under consideration, such as HB 1150 and SB 5284.

WR has also highlighted the challenges posed by a patchwork of state-specific laws. For multi-state retailers, complying with varying regulations across states is complex, costly, and burdensome. Since retailers source products for all stores nationwide, a federal solution would be far more practical. WR has emphasized that Washington represents only 2% of the U.S. market, underscoring the need for lawmakers to consider broader implications.

WR will continue collaborating with bill sponsors and stakeholders to ensure that any adopted program is consumer-friendly and feasible for retailers to implement.

Expanding Presumptive PTSD Coverage threatens workers’ comp stability

Washington State’s workers’ compensation system covers Post-Traumatic Stress Disorder (PTSD) if proven work-related. In 2018, the Legislature granted presumptive PTSD coverage to public safety personnel (firefighters and law enforcement). Now, lawmakers are considering further expansion to include correctional officers (HB 1070/SB 5043) and county coroners (HB 1002) in the 2025 session.

Financial Impact: Expanding presumption-based coverage without assessing long-term financial and operational consequences threatens the system’s stability. Since 2018, this expansion has strained the workers’ comp system:

• Between 2019–2024, 21% of claims resulted in permanent total disability, costing $1.05 million per case.
• 72% of PTSD claims were compensable, averaging $650,000 each.

Cost Shifting Concerns: The financial burden is disproportionately affecting employers. For the public safety risk class, the indicated rate increase was 30%, but L&I capped it at 15%, using contingency reserves. This effectively shifts costs to other employers and industries, creating an unsustainable financial model.

A Sustainable Approach: Instead of continually broadening PTSD presumptions, policymakers should prioritize:

• Preventive mental health treatments to address issues before they escalate. 
• Return-to-work strategies to reduce premature total disability and retain skilled professionals.

WR is working with legislators, L&I, and stakeholders to advocate for a holistic approach that prevents further cost shifting and ensures a financially sustainable system.

AI Transparency and Disclosure bills advance

Two bills aimed at regulating artificial intelligence (AI) recently passed the House Technology, Economic Development & Veterans Committee along party lines (8-5). HB 1168 and HB 1170 focus on AI transparency and disclosure requirements, with significant impacts on retailers.

HB 1168 seeks to increase transparency by requiring developers of generative AI systems to publicly disclose detailed information about the datasets used to train their systems. This includes identifying sources, data types, and whether datasets contain copyrighted or personal information. 

HB 1170 focuses on informing users when content has been developed or modified by AI. It requires providers of AI systems with over 1 million monthly users to provide public AI detection tools and ensure AI-generated content includes clear, permanent disclosures identifying its origin. 

For retailers, these bills could introduce operational challenges. Compliance with disclosure requirements and the use of detection tools may increase costs, especially for businesses using AI in low-risk uses like marketing, customer interactions, and inventory management. Additionally, the broad scope and definitions in both bills could unintentionally sweep retailers into the “deployer” role.

WR, along with other industry groups, actively engaged on both bills, offering reasonable amendments to address retailer concerns. While some minor changes were accepted, the most substantial amendments, improving definitions and exploring alternative enforcement mechanisms, were not adopted.

The legislative process is ongoing, and WR will continue advocating to ensure retailers' concerns are addressed as these bills progress.

Washington State faces multi-billion-dollar budget deficit

Washington state is grappling with a multi-billion dollar budget deficit after years of increased spending. Estimates on the exact shortfall vary widely, with figures ranging from $6.7 billion to over $16 billion. Despite a strong economy, state spending has surged by 40% in the past four years, outpacing revenue growth.

Enterprise Washington, a non-profit organization, has launched BudgetBreakdown.org to educate the public on the state’s financial trajectory. Their analysis shows that while tax collections have nearly doubled over the past decade, state spending has increased by 114%, contributing to the deficit.

With no clear consensus on solutions, some lawmakers are advocating for a wealth tax, while others are calling for spending reforms. The upcoming March 18 revenue forecast is expected to provide more clarity on the state’s financial outlook. In the meantime, Enterprise Washington urges voters to stay informed about government spending and fiscal policy decisions.

Retail sales slow in January, but economic growth continues

Retail sales dipped in January following a strong holiday season but still showed year-over-year growth, according to the latest U.S. Census Bureau data. National Retail Federation (NRF) Chief Economist Jack Kleinhenz noted that the slowdown was expected after vigorous holiday spending. Contributing factors included weaker payroll growth, persistent high prices, and weather disruptions, such as cold temperatures and California wildfires.

Overall, retail sales declined 0.9% seasonally adjusted month over month but increased 4.2% unadjusted year over year. Core retail sales, which exclude automobiles, gasoline, and restaurants, followed a similar trend, decreasing 0.9% from December but rising 4% year over year.

Despite the January slowdown, the retail sector remains strong, following a 4% year-over-year increase in core retail sales during the 2024 holiday season. The CNBC/NRF Retail Monitor also reported a 5.72% annual gain in core retail sales for January, further supporting signs of a stable economy.

NRF continues to monitor and forecast retail trends, providing insights that help retailers navigate shifting consumer behavior. While economic challenges persist, the retail industry remains resilient as it heads into 2025.

Job growth slows but remains steady in January

The U.S. job market maintained solid growth in January, adding 143,000 jobs despite slowing from previous months. The unemployment rate dipped to 4%, lower than economists’ expectations, signaling continued labor market stability.

While job gains fell short of the projected 169,000, revisions to November and December figures added a combined 100,000 jobs, reinforcing a resilient employment landscape. Sectors such as healthcare, retail, and government saw job growth, while employment declined in mining and oil and gas extraction.

Labor market trends show a cooling period, with slower hiring and job-quitting, but layoffs remain historically low. Cory Stahle of Indeed Hiring Lab noted that businesses continue a “business as usual” approach despite economic uncertainties. The share of prime-age workers (25-54) employed edged up to 80.7%, a positive indicator of economic health.

Looking ahead, potential labor market shifts could arise from policy changes, including immigration restrictions and tariffs. Analysts predict an immigration slowdown may affect payroll growth as early as February. However, the labor market remains resilient, with steady hiring trends providing stability.

For Washington retailers, these employment trends highlight the importance of workforce adaptability in navigating shifting economic conditions.

ORC Best Practices Report strengthens public-private partnerships

Organized retail crime (ORC) remains a serious challenge, impacting businesses, employees, and communities across Washington. To combat this growing issue, Washington Retail Association (WR), in partnership with Challenge Seattle and a coalition of law enforcement, retailers, and government officials, has developed a comprehensive Best Practices for Combating Organized Retail Crime report.

This report builds upon the Organizing a Public-Private Partnership to Defeat Organized Retail Crime report and provides actionable strategies for retailers, law enforcement, and prosecutors. It emphasizes the importance of collaboration, real-time information sharing, and prosecution-focused enforcement. Key recommendations include real-time information sharing, prioritizing prosecution, and fostering strong working relationships between law enforcement and retailers.

This work would not be possible without the continued engagement of key stakeholders, including retail leaders, law enforcement officials, prosecutors, and policymakers. The ORC Resource Hub serves as a central platform for best practices, tools, and ongoing updates to strengthen our collective efforts.

The work is far from over. WR continues to advocate for stronger enforcement, legislative action, and resource allocation to address ORC effectively. All partners are encouraged to review the report and engage in ongoing discussions to strengthen the collective response to ORC.

Image of two suspects stealing items from a store in footage shared by police on Feb. 4, 2025. Credit: Renton Police Department

Organized retail crime ring busted in Puget Sound

Three suspects are accused of stealing over $143,000 in merchandise from stores across western Washington in a series of organized retail thefts, according to Renton police.

The thefts, spanning from late October 2024 to early January 2025, targeted high-end fragrances and cosmetics in cities including Renton, Tukwila, Federal Way, Issaquah, Seattle, Auburn, Lakewood, and Redmond.

A 25-year-old male suspect, with 22 prior convictions, including four for organized retail theft, is in custody on a $325,000 bail and faces 10 charges. An 18-year-old female suspect, also in custody on $50,000 bail, faces six counts of theft. The third suspect, a 26-year-old, has been released on bail but is expected to face four charges.

Retailers across Washington continue to face increasing losses due to organized retail crime, emphasizing the need for stronger preventative measures and enforcement. WR remains committed to advocating for policies that protect businesses and hold offenders accountable.