Public Hearings Set on L&I's Proposed OT Reforms
"The current system is out of date. It's at risk of failing tens of thousands of workers by broadly defining what a white collar worker is, which allows businesses to pay salaries that may be even less than minimum wage," said L&I Director Joel Sacks. "We want to make sure that people who legitimately deserve overtime get paid for the extra hours they work. Washington's minimum wage has been updated repeatedly for decades; this hasn't been. This proposed rule links future salary thresholds to the minimum wage."
The Washington State Department of Labor & Industries has scheduled six public hearings around the state to take comments on a proposed rule that aims to restore overtime protections for thousands of Washington workers. The proposed changes would significantly increase the minimum amount employees must earn before they can be exempt from receiving overtime pay and also would update the test used to determine who qualifies for the overtime exemption. L&I said the proposal, which Washington Gov. Jay Inslee requested, would more closely align the state rule with federal standards.
"Americans are working harder and longer than ever before, and overtime protections ensure that workers are fairly compensated. That's why I asked the Department of Labor & Industries to update Washington state's overtime rules," Inslee said. "I thank L&I for their work to update the system that will benefit hard-working Washingtonians and their families."
The public hearings will take place:
- July 15, Tumwater, at L&I headquarters
- July 16, Seattle, at The Swedish Club
- July 17, Bellingham, at Four Points by Sheraton Bellingham Hotel & Conference Center
- Aug. 5, Ellensburg, at Hal Holmes Community Center
- Aug. 6, Kennewick, at Springhill Suites by Marriot Kennewick Tri-Cities
- Aug. 7, Spokane, at CenterPlace Regional Event Center
The agency expects the formal rulemaking process may take up to six months. L&I reported it expects to adopt the rule in late 2019.
"The current system is out of date. It's at risk of failing tens of thousands of workers by broadly defining what a white collar worker is, which allows businesses to pay salaries that may be even less than minimum wage," said L&I Director Joel Sacks. "That's especially true for employees who are expected to work well over 40 hours a week but don't get paid overtime. We want to make sure that people who legitimately deserve overtime get paid for the extra hours they work. Washington's minimum wage has been updated repeatedly for decades; this hasn't been. This proposed rule links future salary thresholds to the minimum wage."
Washington employers are currently using the federal threshold, which allows salaried workers to be "exempt" from overtime if they perform certain types of work and are paid at least $455 per week, or about $24,000 per year. The current state threshold, which was last updated 43 years ago, sets a level that's even lower, $13,000. Washington's proposed rule calls for restoring the protections by setting higher salary thresholds set as a percentage of the state minimum wage. Increases would be phased in over several years, depending on the size of the employer. To meet the requirements, employers with 50 or fewer employees would have to pay exempt workers approximately $675 a week, or about $35,000 per year, beginning July 1, 2020. Larger companies would have to pay exempt workers approximately $945 a week, or about $49,000 per year. Those amounts would increase yearly based on a formula that uses the state's minimum wage.
The changes could affect more than 250,000 workers by 2026. At that time, exempt salaried workers would have to be paid at least 2.5 times minimum wage and meet the job-duties test. The state currently uses two "duties tests," but the proposal would combine them into one test that would align more closely with the method used at the federal level. The change would make the process simpler for employers and increase the likelihood that workers are correctly classified, according to the agency.