Changes made to Washington's overtime rules
News release: State's new overtime rules take effect July 1
Employment Standards message: 2021 salary thresholds set for overtime exempt employees
Washington's overtime employment rules are changing.
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 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 might 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 changes was July 1, 2020.
In addition to the change in the minimum salary level, the new rules update the job duties tests. The state previously used 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
Changes in Washington’s minimum wage are now calculated each year. The increases mandated by voter-approved Initiative 1433 stopped in 2020.
Each September, L&I will use the Consumer Price Index for Urban Wage Earners and Clerical Workers (referred to as CPI-W) from the U.S. Bureau of Labor Statistics to determine the minimum wage for the following year.
The new state minimum wage will be $13.69 an hour, and will take effect Jan. 1, 2021. That is up from $13.50 an hour in 2020.
With the state salary thresholds for exempt employees now a multiplier of the state minimum wage, the thresholds will also rise on Jan. 1, 2021. Small businesses (1-50 employees) will have to pay at least 1.5 times the state minimum wage (821.40 a week), and large businesses (51 or more employees) will have to pay at least 1.75 times the minimum wage (estimated at $958.30 a week).
The U.S. Department of Labor in September 2019 updated the federal overtime rules regarding executive, administrative, and professional workers. Effective Jan. 1, 2020, the federal minimum salary threshold increased to $684 a week.
Salaried exempt employees will have to earn at least the state thresholds because they are higher than the federal threshold. When state and federal thresholds conflict, businesses must meet the threshold most favorable to employees.
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.
How you can stay informed
Check out the overtime rules fact sheet.
Check out the overtime rulemaking documents.
You can read the adopted rule language in Chapter 296-128 of the Washington Administrative Code.
For additional information, you can contact L&I's Employment Standards program at EAPrules@Lni.wa.gov or 1-866-219-7321.
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