Worker advocates are calling on the state to raise the overtime salary threshold to three times the minimum wage, nearly $72,000, so more people qualify for it.
Free Time Day, the faux holiday a worker-advocacy group invented and observed in Seattle on Thursday, is not exactly the kind of thing most workers would want to celebrate.
“It sort of depends which side of the paycheck you’re on, how you experience the definition of ‘free time’ there,” said Sage Wilson of Working Washington.
Free Time Day is meant to call attention to Washington overtime rules that have not been updated since 1976, leaving hundreds of thousands of salaried workers in the state ineligible for extra pay when they work more than 40 hours a week. That adds up to several billion dollars a year, by Working Washington’s calculations.
The “holiday” marks the point in the year when salaried employees — who average 49 hours a week — have put in the equivalent of a full year’s worth of 40-hour weeks. After Thursday, they are in effect working for free — at least relative to their hourly counterparts, who must be paid 1.5 times their regular rate for each hour after 40 worked within a seven-day period.
State and federal regulators are finally, slowly, getting around to updating overtime rules, with a deadline Friday for public comments on a range of proposals under consideration. More opportunities for public comment are planned. Meanwhile, workers, including a former Amazon paralegal, have to take matters into their own hands if they think they’re due overtime.
Washington’s salary threshold for overtime pay is the same now as it was 42 years ago — $250 a week, or $13,000 a year — although the slightly more generous $455-a-week current federal threshold governs in the state. People who are paid more than that — and anyone working full time at Washington’s $11.50-an-hour minimum wage is earning $460 a week — can be exempted from overtime pay, if their job duties categorize them as a white-collar worker in an executive, administrative or professional position. (There are several other job categories exempt from overtime, including agricultural workers, seamen and people working at youth camps.)
Most Read Business Stories
- Hunts Point mansion, famous for huge art collection, sells for record $37.5 million WATCH
- Protecting your Internet accounts keeps getting easier. Here’s how to do it.
- Boeing's quarterly report will give first look at financial impact of MAX crisis
- Renter boom: Apartments filling up faster in Seattle area than anywhere in the U.S.
- Medicare, Social Security face shaky fiscal futures
Setting aside the obsolete salary threshold, workers complain that they are frequently misclassified as overtime-exempt and have to fight with their employers to be paid their due.
Lorraine Colby, who regularly worked 50-hour weeks or more during five years as a paralegal in the legal department of Amazon, filed suit against the company in July alleging it “wrongfully and willfully” misclassified her and more than 40 other paralegals as exempt from overtime, also denying them rest and meal breaks they would have been due otherwise.
Colby’s job entailed no significant independent decision-making and her work had to be approved or directed by a lawyer, attorney Donald Heyrich argued in the suit, which seeks class-action status and was filed in King County Superior Court. To be exempt from overtime under federal law, an employee’s job must include duties such as management, supervision of other employees, discretion on matters of significance or creative or intellectual work, among other conditions. Washington’s tests for overtime exemptions are similar to the federal tests.
Heyrich argued that the legal department of one of the country’s largest employers should have had full knowledge of employers’ overtime obligations.
“However, in its never-ending search to save money from its employees, Amazon willfully misclassified its paralegals, to save on overtime, and avoid the requirements of meal and rest breaks under Washington State Law,” he wrote in the complaint.
Lawyers for Amazon sought to have portions of Colby’s case thrown out — though not the fundamental claim that she was misclassified as overtime-exempt. Neither Amazon nor Colby’s lawyers responded to a request for comment. The case is still pending.
Classification fights, which often hinge on tests of the employees’ duties, have to be done on a case-by-case basis, creating a huge burden for workers — whose financial damages might be less than what it costs to bring a claim — and employers alike. Current employees “are often afraid to assert their rights out of fear of retaliation,” Heyrich said in the complaint.
That’s why Working Washington is focusing on raising the minimum salary threshold rather than refining the duties test.
Wilson said the threshold should be restored to triple the minimum wage. That would be $71,760 a year at the current statewide minimum of $11.50 an hour, which is set to increase annually. He pointed out that the original overtime salary threshold established in the Fair Labor Standards Act of 1938 was $30 a week, triple the federal minimum the act established of 25 cents an hour.
The state’s pre-draft proposal includes a range of possible salary thresholds, up to the triple minimum wage.
The National Federation of Independent Business, meanwhile, is asking the state to delay its overtime update until after the federal process is completed to make it easier for small businesses to comply.
The federal Department of Labor began an revising overtime rules under the Obama administration in 2016. A listening session was held in Seattle and four other cities last month and the federal government appears to be moving forward with a proposed rule early next year.
Washington intends to have a proposed rule to consider late this year or early next year.
In comments to the state, Patrick Connor, the the state director of the National Federation of Independent Business, said the state and federal salary thresholds should be equal and cautioned against using a multiplier of the minimum wage.
Working Washington estimated that 250,000 to 500,000 people are underpaid by as much as $4 billion a year in aggregate because of the failure to update the state’s overtime rules. Wilson said that’s not to say employers should be on the hook for that amount of additional payment. Rather, it’s about valuing employees time appropriately so they can have more of it to themselves.
That’s what Sidney Kenney wants. The 30-year-old Tumwater man said he’s paid $40,500 a year and often puts in 55-hour weeks as a program supervisor at a for-profit provider of residential services for people with developmental disabilities.
“I don’t necessarily want more money,” he said. “I want the time.”