On December 11, the Washington State Department of Labor & Industries announced new rules regarding Washington State’s white collar exemption regulations. If not overturned, these rules will be phased in starting on July 1, 2020.
The updated rules set the minimum salary an employee must receive in order to be exempt from overtime. Along with being paid a minimum set salary, in general, employees must fall into the “white collar” exemptions of either executive, administrative, professional worker, outside salesperson, or computer professional duties under Washington law to be considered exempt.
Starting on July 1, 2020, the minimum salary threshold for Washington State’s “white collar” exemptions will increase to $675 per week ($35,100 annually). The minimum salary threshold will increase each year and by January 1, 2028, the minimum salary threshold is projected to be $1,603 per week ($83,356 annually). Employers with 50 or fewer employees have a more gradual phase-in schedule than employers with 51 or more employees.
As we have previously alerted you, the Department of Labor (DOL) announced earlier this year a new salary threshold that increases the minimum annual salary for exempt positions from $455 per week ($23,660 annually) to $684 per week ($35,568 annually) starting on January 1, 2020. Since the federal minimum salary threshold at $684 per week is greater than the first phase of Washington State’s minimum salary threshold at $675 per week, federal law will prevail until Washington’s threshold exceeds the federal threshold.
Washington employers should begin analyzing positions that may be impacted by this change and considering various compliance options such as increasing an employee’s salary, changing the position to non-exempt and paying overtime, restructuring the position, and other potential options.
Please let us know if you have any questions!