To be classified as exempt, state and federal overtime exemption rules have generally required that executive, administrative, and professional employees meet a three-part test: the worker must be paid a predetermined and fixed salary, the salary must meet a minimum threshold, and the job duties must primarily involve executive, administrative, or professional duties as defined by the regulations.

The changes could result in employees being reclassified as salaried non-exempt or hourly non-exempt, in which they would be paid overtime for any hours worked over 40 in a workweek plus receive other protections under the Minimum Wage Act.

How the salary threshold increase will be implemented

The rules changes went into effect on July 1, 2020, and the salary threshold will be phased-in until fully implemented in 2028.

The pace of the salary threshold implementation will depend on how many people are working for your business. Small businesses, with 1-50 employees, will have a slower pace compared to large businesses (51 or more employees).

By the time the rule is fully implemented in 2028, a salaried exempt employee will have to be paid at least 2.5 times the state minimum wage. The employee must also meet the job duties test.

New salary threshold implementation schedule

Threshold phase-in schedule for computer professionals paid hourly

Understanding the job duties tests

The job duties test, not an employee's job title or description, determines whether a job primarily involves executive, administrative, professional, computer professional, or outside sales duties as defined in the rules. Employers are responsible for determining whether a worker's job duties, not job title or job description, meet the requirements to be exempt. Prior to these updates, the state used two job duties tests. They have been combined into one test with language that better aligns with the federal language. This will make it simpler to classify workers and increase the likelihood that they are correctly classified.

What options do I have for how I classify my employees?

Employers will have multiple options moving forward, including paying exempt employees at least the new salary threshold, and assuring they meet the job duties tests, or changing an employee to non-exempt and paying overtime for all hours worked over 40 in a workweek.

Available options include:

• Converting current exempt salaried employees to non-exempt, salaried employees and pay overtime
  • Track hours of work for non-exempt, salaried employees.
  • Pay overtime for hours worked over 40 per week.
  • Provide other protections associated with the Minimum Wage Act.
• Limiting hours worked by employees to 40 per workweek
  • Convert current salaried, exempt employees to salaried non-exempt or hourly non-exempt.
  • Track the hours of work and limit hours of work to 40 per week, or less.
  • Provide other protections associated with the Minimum Wage Act.
• Converting current salaried exempt employees to hourly non-exempt employees
  • Pay formerly salaried employees on an hourly basis.
  • Pay overtime (time and a half the employee’s regular rate of pay) for hours worked over 40 per week.
  • Provide other protections associated with the Minimum Wage Act.
• Maintaining exempt status
  • Meet salary threshold requirements of WAC 296-128-545 for salaried, exempt workers.
  • Ensure employees meet the duties test requirements, so employees would appropriately remain exempt from overtime and other Minimum Wage Act provisions.

How can I learn more about this?

The department has developed and implemented a robust outreach and education program to explain the new standards. The department also is hosting a number of webinars and is available to do online presentations for organizations. In addition, L&I has developed an eLearning module to help guide employers in determining whether a worker likely qualifies as exempt or not. The Resource Center section of this page includes links to sign up for webinars and request a presentation as well as fact sheets, case examples and additional information.

Where can I find more information?

You can find more information on the L&I overtime rulemaking page.

For additional information, you can contact L&I’s Employment Standards Program at EAPRules@Lni.wa.gov or toll free at 1-866-219-7321.

You also can sign up to receive email updates on the overtime employment rule changes and other wage matters at Lni.wa.gov/wagenews.

To be considered an overtime exempt employee, a worker must be paid a fixed salary, that salary must meet or exceed the minimum salary threshold, and they must meet the requirements of the job duties tests.

These changes are expected to restore overtime eligibility to tens of thousands of workers when fully implemented in 2028, and strengthen overtime protection for tens of thousands more workers.

How will the salary threshold increase be implemented?
The rules changes went into effect on July 1, 2020, and the salary threshold be phased-in until fully implemented in 2028.

The pace of the implementation will depend on how many people are working for an employer. Small businesses, with 1-50 employees, will have a slower pace compared to large businesses (51 or more employees).

By the time the salary threshold is fully in implemented in 2028, a salaried exempt employee will have to be paid at least 2.5 times the state minimum wage.

New salary threshold implementation schedule

What changes are being made in the job duties tests for executive, administrative, and professional workers?
As part of the criteria for an employee to be exempt, they must meet the job duties test. This is not the same as the employee’s job title or job description, but determines whether a job primarily involves executive, administrative, professional, computer professional, or outside sales duties as defined in the rules.

The rules update combines the two tests the state previously used into one test that more closely aligns with the duties test used at the federal level. This will make it easier to classify workers and increase the likelihood that they are correctly classified.

Changes for computer professionals
The rules changes also updates the duties test for employees defined as computer professionals, including computer system analysts, computer programmers, software engineers or other similarly skilled workers to more closely align with the federal duties test.

Also changing is the minimum hourly threshold for computer professionals. While the pace of the threshold increase will depend on the size of the business, all computer professionals paid on an hourly basis will have to be paid at a rate of at least 3.5 times the state minimum wage after a three-year phase-in ending in 2022. Computer professionals paid on a salary basis will have to be paid at least 2.5 times the state minimum wage after an eight-year phase-in ending in 2028.

Threshold phase-in schedule for computer professionals paid hourly

Changes for outside salespeople
The changes include a refinement in the definition of an outside salesperson to better align it with the language used by the U.S. Department of Labor. Among the changes in the new rule, an outside salesperson shall mean any employee whose primary duties involve makings sales or obtaining orders and contracts for services while customarily working away from the employer’s place of business. These employees must be paid on a guaranteed salary, commission or fee basis.

The main difference between the new state and federal regulations is the state regulations require:

• Outside sales employees must be compensated on a guaranteed salary commission or fee basis (but the salary threshold does not apply).
• Employers must advise employees of their status as outside salespersons.

How might my job status be affected?
The new rules do not require employees to do anything. However, they may have to comply with new procedures, rules, etc. from their employers based on the employer’s decisions. Employers will have to make adjustments and will have several options when deciding how to classify and pay their workers. Some of the available options are:

• Converting current exempt salaried employees to non-exempt, salaried employees and pay overtime
  • Track hours of work for non-exempt, salaried employees.
  • Pay overtime for hours worked over 40 per week.
  • Provide other protections associated with the Minimum Wage Act.
• Limiting hours worked by employees to 40 per workweek
  • Convert current salaried, exempt employees to salaried non-exempt or hourly non-exempt.
  • Track the hours of work and limit hours of work to 40 per week, or less.
  • Provide other protections associated with the Minimum Wage Act.
• Converting current salaried exempt employees to hourly non-exempt employees
  • Pay formerly salaried employees on an hourly basis.
  • Pay overtime (time and a half the employee’s regular rate of pay) for hours worked over 40 per week.
  • Provide other protections associated with the Minimum Wage Act.
• Maintaining exempt status
  • Meet salary threshold requirements for salaried, exempt workers.
  • Ensure employees meet the duties test requirements, so employees would appropriately remain exempt from overtime and other Minimum Wage Act provisions.

How do I file a workplace rights complaint?
If you believe your rights have been violated, you can find more information or file a complaint online.

Where can I find more information?
You can find more information on the L&I overtime rulemaking page.

For additional information, you can contact L&I’s Employment Standards Program at EAPrules@Lni.wa.gov or toll free at 1-866-219-7321.

You also can sign up to receive email updates on the overtime employment rule changes and other wage matters at www.Lni.wa.gov/wagenews.

For Guidance

• eLearning module: This new online tool explains the changes in the overtime rules and guides users through a series of questions that can help determine whether an employee would likely meet the requirements to be classified as exempt or not.
• Webinar registration: L&I is hosting a series of webinars on the updates to the rules governing employees exempt from the protections of the State Minimum Wage Act. On L&I’s calendar of workshops, events and webinar, look for “Overtime Exemptions Training Sessions (Webinar)” in the “Event Title” pull-down menu.
• Public presentation request: If your organization would like to hear a presentation on the updates to the state’s overtime rules, contact L&I’s outreach and education team at EAPrules@Lni.wa.gov.
• Job duties fact sheets: These fact sheets will help you better understand the changes being made to the job duties test for each category of exempt workers.
  • Executive.
  • Administrative.
  • Professional.
  • Computer professionals.
  • Outside salespeople.

• What Washington employers should know: This business focused fact sheet details the EAP rule updates and outlines steps employers could take.
• Overtime rules fact sheet: The printable fact sheet offers a quick explanation of the updates to the rules and who will be impacted by the changes. 
• Salary threshold implementation chart: This details the incremental increases in the state salary threshold through the final implementation in 2028
• Threshold schedule for computer professionals paid hourly: This chart shows the incremental increases in the threshold for computer professionals who are paid on an hourly basis.
• Case studies: These examples illustrate whether an employee would likely meet or not meet the Minimum Wage Act exemption requirements.
  • Executive.
  • Administrative.
  • Professional.
  • Computer professional.
  • Outside salespeople.
• Salaried exempt vs. salaried nonexempt: This fact sheet explains the differences between these two employee classifications.

Technical Documents

• Chapter 296-128 of the Washington Administrative Code: You can read the marked up version of the state's overtime rules showing the updates.
• WAC 296-128: Section 500 details the exemptions to the State Minimum Wage Act.
• Overtime rulemaking documents: These are the official documents related to the rulemaking process.
• Administrative Policies: You can get additional guidance and interpretation on the overtime rules from policies ES.A. 9.1 - 9.9