The Department of Labor and Industries (L&I) has proposed changes to the executive, administrative and professional overtime exemptions. Among the changes is an increase in the minimum salary threshold that affects all employers who will be required to pay salaried, overtime-exempt workers. The current threshold to be exempt from overtime pay set by the U.S. Department of Labor is $23,660 per year. L&I is proposing to set the threshold at 2.5 times the state’s minimum wage which would be $79,872 by 2026 when it would be fully implemented. That is three times the current threshold and more than twice what the U.S. Department of Labor is currently proposing as the new federal standard.
BIAW, along with the rest of the business community, urged L&I to wait for the federal update to complete and then move forward in a fair, comprehensive, and meticulous manner. The process should have taken into account each affected party, the business environment of each region of the state, and the proportion of impact L&I changes would have on the businesses in those regions.
BIAW sees a negative impact on current salaried, exempt employees if the rules change. Some employees will lose hours, flexibility, and other benefits of being an exempt employee if their positions are reclassified as hourly. Washington employers will be forced to reduce hours as well as discourage attending events after normal business hours to avoid overtime obligations. Many salaried employees are able and encouraged to flex their time to meet professional and personal needs. Any significant change will put a larger burden on businesses and remove flexibility for employees.
L&I will be holding public comment hearings across the state. BIAW has been and will continue to be active as this rulemaking progresses and encourages members to attend and speak out against this drastic rule change:
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