After Seattle’s Hostile Business Environment, Amazon Decides to Find a Mistress
Amazon and Seattle: Marital Discord
Amazon and Seattle have been married for over 20 years, but it appears that both partners aren’t completely satisfied.
In recent years, Seattle has taken a passive aggressive role in its partnership with Amazon by simultaneously blaming poor city planning on the company’s growth while passing multiple employment laws designed for the workers in mind. Just two months before Amazon’s announcement Seattle leaders applauded a new law that “taxed the rich”, aka high income earners, which affects many of Amazon’s employees.
Seattle’s leadership has also ignored business concerns over many of these new laws, nearly all of which assume corporate guilt and place the burden and cost of proving innocence on the employer.
Amazon in return, just announced that it will be seeking a new city for a second headquarters. The move was a surprise to Seattle city leaders, which is very telling about the state of the relationship.
Seattle’s Attitude toward Amazon is Not Business Friendly
Amazon has brought a direct 40,000 jobs to Seattle. That number doesn’t include all the jobs that have resulted from indirect growth and services provided to Amazon’s many employees.
But, the city has often struggled with keeping up with the company’s growth. As a result, Seattle’s leaders have pointed the finger at Amazon for high traffic, too little housing, and rising prices. Amazon owns or rents 19% of the city’s business space, which is more than the next 40 largest employers combined.
And so, when Seattle leadership failed to adequately plan for the company’s growth over the last 20 years, Amazon has also been the scapegoat. Its no wonder that the relationship between the city and the company has waned.
Seattle’s Laws are Un-Business Friendly
In addition to the city’s attitude regarding Amazon, Seattle’s leadership has also passed some of the strictest employment laws introduced across the USA.
These laws include sick leave laws, a sky high minimum wage, and restrictive scheduling laws. These employment laws require heavy oversight, training, and increased time requirements for managers and human resource professionals.
Additionally, they carry high fines, assumed employer guilt, and failure to answer many business owners questions about compliance specifics.
Seattle’s Sick Leave Ordinance can be Costly to Businesses
Seattle’s Sick Leave Ordinance provides up to 72 hours or 9 days of paid sick leave for employees of all large employers, of which Amazon is included. Although Amazon’s benefits package likely includes at least that many personal days, Seattle’s law has specific definitions, requirements and other criteria that forces companies to reanalyze current sick leave benefits and rewrite employment policies. A single penalty for non-compliance with Seattle’s sick leave law could cost an employer over 10,000 in emotional redress, in addition to attorney fees, city fines and penalties.
Seattle’s Minimum Wage is Driving Business Down
In 2014, Seattle was the first major metropolis to pass a $15 minimum wage over a period of 5 years. Currently, the city’s minimum wage is at $13 an hour. However a new study by the University of Washington showed that the increase in minimum wage actually decreased jobs, restaurant openings, and dropped low income worker’s salaries. Then, Mayor Murray, who recently resigned amid sexual abuse scandals, rigged a Berkeley study in favor of the minimum wage that was released before the official release of the UW study.
Amazon isn’t the only company to leave.
National chains such as McCormick, Schmick’s, Mortons The Steakhouse, and Sullivan’s Steakhouse have all closed restaurants in Seattle. Restaurants tend to be a leading indicator of business growth or decline as they operate on very slim profits of 4% or less.
Several of the chains cited Seattle’s new minimum wage laws as a leading reason why they decided to close the Seattle locations.
Seattle’s Restrictive Scheduling Laws Create Burden on Retail Business
In addition to an ever rising minimum wage, semi-new sick leave laws, Seattle’s new restrictive scheduling law just went into effect in July. The law affects all retail employers and although it is possible that Amazon may not qualify under Seattle’s definition of “retail”, Amazon would be aware of the possibility that Seattle might include the company in future rules for the new law.
Under the new Secure Scheduling law, employers pay additional wages to employees when changes are made to their schedules with less than 14 and less than 7 days notice. They pay extra wages when employees are called into work extra hours or when shift times are changed, or cancelled. Employers can’t hire new employees without first offering additional hours to their existing employees, which mean that sick employees can leave employers paying double to bring in a coworker or stranded without a way to bring in temporary help.
This kind of overhead rules slow down business growth and adaptability.
Amazon Seeks a Friendlier City, Sending a Message to City Leaders
Amazon’s announcement suggested that at least part of their decision is, in fact, based on Seattle’s attitude toward business. The announcement stated that they were looking for a city with a “stable and business-friendly environment.”
Mike McIlwain, a venture capitalist, said he heard concerns from Amazon executives about the climate for business in Seattle.
“I recognize there are many factors that went into Amazon’s decision, but the Seattle City Council’s focus on dividing the pie of economic opportunity rather than growing the pie for the city and the region is undoubtedly among them.” he said.
The Seattle Times called the move by Amazon “a distressing wakeup call” and said that Seattle’s leaders must realize that “poor planning and anti-business postering come with a heavy price.”
Let SwipeClock Help
Additionally, these businesses have to also comply with both State and Federal Overtime Laws, the Family Medical Leave Act and any other national or local laws that are enacted. SwipeClock provides a comprehensive array of workforce management and time tracking tools that can help businesses to more easily stay in compliance with local and national laws.
Records are effortlessly kept for years and accrual is automatically tracked and reported to employees according the state and city laws. Additionally, with geo-timekeeping clocks, businesses can effortlessly track time worked in specific cities to ensure compliance.
Written by Annemaria Duran. Last updated on September 20, 2017
Simplify HR management today.
Updated October 18, 2023 As a small business owner, you work hard to balance your time between growing your business and managing your workforce. Among laws around labor and compliance, FMLA is usually one of high focus, as the penalties are costly and violations common. But what’s the biggest and most common mistake made by…Read More
Employee turnover is a significant issue that impacts organizations of all sizes and across every industry. A recent Forbes article outlined some surprising statistics, including the cost associated with replacing an employee who leaves their role. (Spoiler alert: It’s a third of their salary). Explore 11 of the most common reasons for leaving a job,…Read More