WR leadership meets with L&I about overtime rules

Sep 4, 2019
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Written by Mark Johnson, Senior Vice President of Policy and Government Affairs
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WR’s leadership team met last week with top Labor & Industries officials regarding their proposal to significantly increase employee eligibility for overtime pay.

In public hearings around the state, the association and its members have testified with deep concerns about the additional costs that would result from new eligibility rules. In short, anyone making nearly $80,000 a year would be eligible for overtime pay, a threshold about twice as high as the federal government has proposed.

Our team was represented by President and CEO Renée Sunde; Senior Vice President of Policy and Government Affairs Mark Johnson; Vice President of Operations Rose Gunderson; and Contract Lobbyist Bruce Beckett. They met with Labor and Industries Deputy Director Elizabeth Smith and the L&I Team charged with developing the overtime rule.

L&I has extended public comment until September 20th on their proposal. This week, WR submitted written comments outlining substantive and analytical concerns with the proposed rule. Please email comments on the proposal to EAPrules@lni.wa.gov

In the meeting with L&I’s team, WR:

  • Provided background on the retail sector in Washington State, pointing out that the sector employs about 400,000 and collects 51% of state tax revenues in Washington State. L&I heard about the changes underway in the sector and the extraordinary presence of small businesses across the state.
  • Presented data showing the large wage disparity in the retail sector between King County and every other county in Washington State – and that the proposed salary threshold would be higher than the average wage in retail in every county, except King County, in Washington State
  • Provided data showing that approximately 49,000 exempt retail employees would be impacted by the proposed rule, a far greater estimate than the 9,000 estimated by L&I – and answered questions on how employers would likely respond to the rule.
  • Responded as L&I probed about the results of a retail managers’ survey that showed alarming concern by many of the employees that would be impacted by the proposed rule.

L&I pointed out flexibility that exists in current law to classify exempt status for retail employees that, (1) receive a base salary of 1.5 times the minimum wage and, (2) receive an equivalent amount of compensation in commissions or bonuses. Unfortunately, the salary and commission levels under current law are extraordinarily high; the tool would not work for most employers and employees across the state .

L&I has indicated it will review all of the comments and public testimony and work toward finalizing the rule for November or December.