by Emily Sixta
As businesses prepare budgets for the coming years, they will need to factor in the updated Washington state overtime rules going into effect this year. Beginning July 1, 2020, the Washington State Department of Labor & Industries (L&I) will begin a phased-in approach to the newly updated rules to Minimum Wage Act exemptions, with a plan to have them fully implemented by January 2028. The updated rules will require businesses to provide overtime, minimum wage and paid sick leave to some previously exempt employees. These updated rules impact outside salespeople, computer professionals and executive, administrative and professional (EAP) workers across the state.
Over the next eight years, the State overtime rules will increase to 2.5 times the state’s minimum wage, with all sizes of companies reaching that salary threshold by January 1, 2028. This increase to the salary threshold will be slowly phased in depending on the size of companies, with those businesses employing 50 or fewer people being the slowest group to fully transition.
In order to remain “exempt,” workers must typically be salaried and meet salary threshold requirements, as well perform specified executive, administrative, professional, outside sales or computer professional job duties as defined by state regulations.
The updated rules will be the first major changes to state overtime rules since the 1970s and will also include changes to the job duties tests used to determine if an employee can be classified as “exempt” or “non-exempt,” bringing Washington State more in line with federal standards.
Options for Washington Employers
There are multiple options available to employers in determining the best course of action for their business.
- Employers may opt to convert salaried “exempt” employees to salaried “non-exempt” or hourly “non-exempt” and pay any overtime or limit hours to 40 per week.
- Employers may also decide to continue keeping their employees salaried “exempt,” ensuring that they meet the duties test requirements, as well as updated salary requirements.
For further information on the rule updates, and to stay informed, please visit the resources listed below.
For additional information, you can contact L&I’s Employment Standards program at EAPrules@Lni.wa.gov or 1-866-219-7321.