Pete Carroll was in his 20s and in his first coaching job. Russell Wilson wasn’t born yet. And the Kingdome was the shiny (kind of) new home of the fledgling Seahawks and Mariners. You could buy a house for around $50,000. It was the 1970s. No offense to Pete, but it seems like a long, long time ago, doesn’t it?
That’s the last time the state overtime pay rules were significantly updated, but that’s about to soon change.
It’s tough to argue with the concept that people should get paid fairly for a hard day’s work. And if we work overtime, we expect to get paid for that, too.
In Washington and around the country, there are laws that allow certain workers in management, executive and professional positions to be paid a set salary, and not get overtime pay.
There are state and federal requirements that set minimum amounts a person in a position like this must at least be paid if they’re going to be considered “exempt” from overtime and other labor protections. The rules also spell out the state “tests” that help determine the type of jobs that can be overtime exempt.
Unfortunately, our rules are woefully out of date. It’s not fair to workers or their families.
The good news is, we’re fixing that.
Over the last year and a half, at the direction of Gov. Jay Inslee, the Department of Labor & Industries took a close look at the state overtime rules. For the most part, employers and workers agreed that it’s time for an update. But the devil is in the details.
Our rules were so behind that Washington hasn’t been able to use part of them for years. Instead, we’ve been going by the federal law, which sets the annual salary threshold about $10,000 higher than the state threshold. But it’s still far too low.
Since 2004, under federal guidelines, an exempt employee must be paid at least $455 a week or $23,660 a year. A manager who works 50 or 60 hours a week at that level might not even make as much as a full-time minimum wage worker.
Meanwhile, try to buy or rent a place to live, or take a look at your grocery bill, transportation costs, and internet or phone charges.
The overtime rules updates I approved last month will help restore work-life balance for tens of thousands of Washington workers.
Our new rules do three things:
• Increase the minimum amount salaried workers must earn before they can be considered exempt from overtime pay.
• Link future increases in the minimum salary threshold to the state’s minimum wage so we don’t fall behind again.
• Align our state rules on qualifying job duties more closely with federal rules, simplifying things for employers.
Beginning July 1, 2020, the state salary threshold will gradually rise until 2028, when it will be 2.5 times the state minimum wage. At that time, it’ll be around $1,600 a week — about $83,000 a year.
It will be updated annually after that as the minimum wage is adjusted for inflation. One thing to note: The federal government has updated its overtime rules as well starting Jan. 1, 2020. So for a while, Washington businesses will have to follow the more favorable federal threshold. Beginning in 2021, the state threshold will supersede the federal level.
We know the financial impact this decision could have on businesses and nonprofits. The eight-year phase-in gives employers time to consider their options and make adjustments that best fit their business.
The bottom line: This decision reinforces the governor’s and L & I’s commitment to keeping Washington a leader when it comes to workers being treated fairly and earning appropriate compensation for the time they spend working.
These overtime rule updates are the right thing to do, and they’re long overdue.