The Department of Labor & Industries (L&I) has updated the employment rules that determine which workers in Washington are required by law to be paid at least minimum wage, earn overtime pay, and receive paid sick leave and other protections under the state Minimum Wage Act. These changes will affect executive, administrative, and professional (EAP) workers as well as outside salespeople and computer professionals across all industries in Washington.
Changes to these rules will mean some employers will have to provide overtime, minimum wage, and paid sick leave to some employees who were previously treated as exempt. In other cases, employers may need to increase salaries for exempt employees.
The computer professional’s exemption was added in 1997, but these are the first major changes to the state’s rules since 1976.
Who are these workers?
A combination of a predetermined fixed salary, the salary meeting a minimum threshold, and specific job duties determines whether a worker meets the definition of an executive, administrative, or professional worker, outside salesperson or computer professional contained in state rules. These workers are typically “white collar” workers who often have more economic security and relative bargaining power than lower-wage workers.
In general, these workers must be salaried and paid a minimum specified salary level, and must primarily perform executive, administrative, professional, outside sales or computer professional duties as defined by state regulations.
The changes update minimum salary level and job duties
Under the approved changes, the minimum pay a salaried worker must receive to be considered exempt would increase incrementally to 2.5 times the state minimum wage by 2028. Small employers (with 1-50 employees) will have a more gradual phase-in schedule to give them additional time to comply with the new rules compared to large companies (51 or more employees). The effective date for the first threshold increase is July 1, 2020.
New salary threshold implementation schedule
In addition to the change in the minimum salary level, the new rules make updates to the job duties tests. The state currently uses two job duties tests that have been reduced to one test with language that now more closely aligns with the federal job duties tests.
Other factors will have an impact
In addition to the new state overtime rules, Washington’s minimum wage is rising on Jan. 1, 2020. It will go from $12 an hour to $13.50 an hour. This will be the final increase imposed by I-1433 that was approved by voters in 2016.
The U.S. Department of Labor in September updated the federal overtime rules regarding executive, administrative, and professional workers. Effective Jan. 1, 2020, the federal minimum salary threshold will be $684 a week. Salaried exempt employees will have to be paid at least that amount in 2020 because it is higher than the first phase on the incremental state threshold increase of 1.25 times the state minimum wage ($675 a week). When state and federal thresholds conflict, businesses must meet the threshold most favorable to employees.
On Jan. 1, 2021, the state threshold will be the more favorable because small businesses will have to pay at least 1.5 times the state minimum wage (about $827 a week), and large businesses will have to pay at least 1.75 times the minimum wage (about $965 a week).
Public input during the rulemaking process
L&I updated the overtime rules through a rulemaking process that began in March 2018. The public submitted almost 2,300 comments by email, fax, and mail, and 182 people testified during public hearings during this process.
The hearings were held in July and August 2019 in Tumwater, Seattle, Bellingham, Ellensburg, Kennewick, Spokane and Vancouver.
