State announces new rules for overtime pay obligations

Dec 11, 2019
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Written by Washington Retail
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Labor & Industries today announced rule changes that will govern overtime pay obligations by employers beginning on July 1, 2020.

The changes that restore overtime eligibility to an estimated 259,000 workers statewide will be phased in until fully implemented in January of 2028. They are the first major updates to the state’s overtime pay rules in more than 40 years.

Under the changes, the minimum salary a worker must receive to be exempt from overtime will be $35,100 a year, beginning July 1. It will rise to $83,356 in 2028 at the end of the phase-in period. The adopted rules also update a job duties test the state uses to determine if any employee can be exempt from overtime pay.

As the state held public hearings before updating the rule, Washington Retail warned that the potential for more overtime pay would be an undue financial burden, especially for small businesses. The potential for additional costs also could force some employers to reduce available hours, training and employment opportunities.

In the end, L&I extended the implementation period two additional years.

L&I said it phased in the new eligibility rules as an acknowledgment that they will force new costs on many employers. L&I Director Joel Sacks said the department also has an outreach plan to assist businesses through a transition to new rules.

Before the state rules take effect, Washington employers will be required to follow new federal overtime rules that take effect on January 1, 2020. The new federal threshold for overtime exemption will be $35,368 on January 1. When state and federal thresholds conflict, businesses must meet the threshold most favorable to employees.

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