A trio of significant new benefits taking effect in 2020 bolster Washington’s claim to be one of the best states in the country for workers.

Starting in 2020, thousands more people will be paid when they work overtime, will be free to switch jobs as they wish, and will be covered for time away from work to care for their families or themselves.

In addition to those changes, statewide and Seattle minimum wages will increase on Jan. 1, giving Washington the second-highest wage floor in the country at $13.50 an hour, trailing only Washington, D.C.’s $15 an hour. The minimum in Seattle rises to $16.39 an hour at large employers, and $15.75 at smaller employers that do not provide benefits or the opportunity for tips.

Paid-leave law does not protect jobs of workers at small firms

Joe Kendo, government affairs director for the Washington State Labor Council, a union group that lobbied for many of these programs — and a soon-to-be parent who plans to use the forthcoming Paid Family and Medical Leave program — said that for workers, the latest wave of workplace changes will further improve a picture that includes a strong state economy, robust worker protections and above-average union membership.

“All these things come together to make life pretty good in Washington state,” he said.

For businesses, however, the new year brings another round of adjustments to schedules, employment contracts and potentially the prices they charge their customers. Some have hinted they may try to challenge the new overtime benefits.

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Overtime

Last week, Washington finalized its long-awaited update to overtime salary thresholds, which increase steadily over the next eight years beginning in July. (For 2020, new federal rules will still govern, giving overtime benefits to salaried workers earning less than $35,568 a year, or $684 a week. In 2021, the state salary thresholds will rise above the federal level.) By 2028 some 260,000 additional workers — anyone making less than 2.5 times the minimum wage, or about $83,400 a year — will be due overtime when they work more than 40 hours a week, according to estimates from the Washington Department of Labor and Industries (L&I).

Employers should begin planning now whether they will pay their previously overtime-exempt salaried employees time-and-a-half for extra work — either as hourly employees or non-exempt salaried employees — or reduce their workloads and hire more staff, said Rachel Emens, an attorney in Seattle with HKM Employment Attorneys.

She expects the change to affect industries across the state, with a particular impact in nonprofit, technology, law, food service and medical fields, which have lots of salaried workers currently exempt from overtime.

Seattle restaurateur Tom Douglas said his company has yet to assess the impact of the changes.

“What I will say is that, like any new expense, it will escalate the price of going out to eat at a restaurant,” he said in an email. “It’s then up to the consumer who gets to vote with their dollars. They get to make the final choice if this is a good idea or not.”

Sidney Kenney recently changed to an hourly job from a salaried one at a home health-care provider that previously required him to do lots of unpaid overtime, routinely putting in 55-hour weeks. The change has been “wonderful,” he said, noting he’s making more money and working less for the same company.

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“I go out more,” he said. “One, I have more money, and I don’t work as much as I did before, so I’m not dead tired.”

Kenney said his co-workers were buzzing about the rule change this week, including “folks that typically aren’t that in tune with politics and the law and what’s going on with workers’ rights, they were even excited about it.”

He is, too, but he’s also holding his breath until the new rules actually take effect. He cites the Obama administration’s attempt to expand overtime eligibility, which was held up for years by a legal challenge from the U.S. Chamber of Commerce, other business groups and states — a delay that in turn slowed Washington’s rule-making process.

The Washington Hospitality Association, a trade group, said in a blog post that the state’s new overtime salary threshold will “harm our career ladder,” a reference to the salaried middle-management positions offered in restaurants and hotels. It pledged “to pursue options in response to L&I’s action.”

Family and Medical Leave

In 2018, Washington workers and employers began paying a total of 0.4% of wages to fund the state’s new Paid Family and Medical Leave benefit, which will give workers up to 12 weeks off, with pay, for the birth of a child or to deal with their own or a family member’s illness. At least they tried to.

Beginning in April, Jo Anne Hacker of Bainbridge Island repeatedly tried to input her Unified Business Identifier (UBI) number into a state database to begin paying what she owed for the new program for two employees who work on her property. But the number hasn’t been recognized.

“They told me that all of the UBI numbers have not been put into the database,” she said, adding that she’s spent hours on the phone trying to sort out payment of what she thinks will be about $12 a quarter. The glitch caused her to wonder whether the state will be ready to make payouts for workers who take leave under the program when it begins.

Meanwhile, workers expecting babies or scheduling surgeries early in the new year can’t apply for approval from the state to take the benefit until after Jan. 1, and some are nervous about whether they will be approved. A state website, paidleave.wa.gov, provides guidance on how workers anticipating medical leave should prepare — including setting up an account, gathering a medical certification if needed and notifying their employer at least 30 days in advance.

The Labor Council’s Kendo, who sits on a state advisory committee for the program, said his wife is due to have a baby soon. “I certainly share those concerns and frustrations. My wife is pregnant,” he said. “There will be an application coming from my household.”

But he considers these concerns the usual startup hitches for a program of this size and scope.

“I am more excited than I am trepidatious,” he said.

Non-compete agreements

Starting in 2020, Washington employers will no longer be able to use non-compete agreements to stop employees who earn less than $100,000 a year (or less than $250,000 a year for independent contractors) from going to work for competitors.

Particularly in the technology sector, these agreements are used to prevent employees from taking valuable business information to competitors — although laws protecting intellectual property and barring solicitation of employees and customers continue to protect businesses.

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More recently, non-competes have appeared in other industries. In 2014, Jimmy John’s required employees to agree not to go to work for any competing sandwich maker within 3 miles of any of its thousands of locations, for two years.

Laws have been changed in several states, including Massachusetts and California, which banned them entirely.

In Washington, all non-compete agreements that are allowed will be capped at 18 months, unless an employer can prove to a judge why a longer term is needed. They must be disclosed at the time a worker is hired. If the non-compete is added later, employees must be compensated. And if an employee is laid off, the agreements can’t be enforced at all without compensation. Violating the law can result in a $5,000 penalty.

Kendo said the new law also protects musicians from lengthy blackout dates that certain show promoters and music festivals would require as part of a performance contract. Under the old law, promoters could require performers to play no shows for weeks before and after their festival appearance. Starting Jan. 1, the blackout period is limited to a single weekend.

Michael Subit, a partner with the Seattle employment law firm Frank Freed Subit & Thomas, said reining in non-competes will have broad benefits. “It’s going to change not only people’s lives, but the way [non-competes] are litigated in court, and how employers write these things — all positives for employees and the economy,” he said.

Editor’s note: This story was updated to clarify that Washington state overtime salary thresholds will increase above the federal threshold in 2021, not July of 2020.

Seattle Times reporters Tan Vinh and Joseph O’Sullivan contributed to this story.