L&I now uses a multiplier of the state minimum wage to calculate the minimum salary an employee must make to be exempt from overtime (and other protections under Washington’s Minimum Wage Act). Beginning July 1, 2020, the state minimum salary threshold for an employee to be classified as exempt will increase to $675 per week ($35,100 per year) for all businesses. The state salary threshold will increase incrementally until 2028, at which point it will be approximately $1,603 per week ($83,356 per year).
Recall, starting January 1, 2020, the federal salary threshold will be $684 per week ($35,568 per year), slightly above the Washington threshold. Therefore, since the level most favorable to employees applies, employers must look to the federal threshold to determine exempt status until the Washington threshold increases above the federal threshold in 2021.
The rules also update the job duties tests that determine if an employee can be exempt from overtime. This includes tests to determine whether an employee is performing management-level or professional duties to classify as exempt, more closely aligning the requirements to the federal standards.
Washington employers must carefully consider both the increasing salary threshold as well as the modified job duties tests to determine whether employees are properly classified. In many cases, this will mean employees who were not previously entitled to overtime pay and other protections will be covered under the new rules. L&I estimates the changes will restore overtime eligibility to 259,000 workers by 2028. Otherwise, employers may consider increasing employees’ salaries to classify employees as exempt.
For questions about overtime compliance, contact Sarah Hale at 503-276-2111 or firstname.lastname@example.org, or Heather Fossity at 503-276-2151 or email@example.com. For further discussion of overtime eligibility and other emerging wage and hour issues, sign up for Sarah’s upcoming Food for Thought Breakfast Seminar, entitled, “Wage & Hour Compliance: Overtime Eligibility, Employee Classification, & Best Pay Practices,” on Tuesday, January 14, 2019. To RSVP, please email Jessica at firstname.lastname@example.org.
Electronic Alerts are written by Barran Liebman attorneys for their clients and friends. Alerts are not intended as legal advice, but as employment law, labor law, and employee benefits announcements. If this has been forwarded to you, and you would like to begin receiving Electronic Alerts directly, please email or call Traci Ray at 503-276-2115. Copyright ©2020 by Barran Liebman LLP.
Las Alertas electrónicas son escritas por abogados de Barran Liebman para sus clientes y amigos. Las Alertas no son proveídas como asesoramiento legal, sino solo como anuncios de leyes de empleo, leyes laborales y beneficios de empleo. Si esto ha sido remetido a usted y quisieras empezar a recibir las Alertas directamente, por favor mándanos un correo electrónico o llama a Traci Ray al 503-276-2115. Derechos de autor ©2020 por Barran Liebman LLP.