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L&I announces new rules for overtime pay obligations

In addition to the mandated 12.5% minimum wage increase for 2020, employers are facing another mandate due to Labor & Industries’ rule changes for overtime-exempt employees beginning on July 1, 2020.

The changes will be phased in until fully implemented in January of 2028. Under the changes, the minimum salary a worker must receive to be exempt from overtime payment will be $35,100 a year, beginning July 1, 2020. Because this level is lower than the new federal threshold of $35,368 for the overtime exemption effective January 1, 2020, the federal threshold that is more favorable to employees will apply.

The state’s threshold will gradually rise to about $83,356 in 2028 at the end of the phase-in period. One favorable change to this proposal is the alignment of the state’s job duties test to the federal rule.

While it is true the state’s overtime exempt minimum salary has not been updated for more than 40 years, workers in our state have been enjoying a more favorable federal minimum salary level set in 2004.

As the state held public hearings before updating the rule, Washington Retail testified and provided research that the proposal will not only be an undue financial burden, especially for small businesses, but it will also adversely impact the flexibilities and training opportunities that many overtime-exempt employees enjoy.

The only concession from L&I was extending the graduation of the salary level by two additional years. L&I Director Joel Sacks said the department also has an outreach plan to assist businesses through a transition to new rules.

Washington Retail continues to welcome your feedback and stories of how these new rules impact you. Please contact Rose Gundersen, VP of Operations & Retail Services, at 360-200-6452 or rgundersen@waretailservices.com.

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