Washington intends to join a small but growing list of states that are significantly increasing the number of salaried restaurant managers and other workers who qualify for overtime pay.
Like California, New York and Pennsylvania, Washington intends to put time-and-a-half pay within reach of more currently exempt employees than new federal regulations would. The updated national guidelines are expected to be released within the next few weeks.
The Washington State Department of Labor & Industries (L&I) proposed yesterday that any salaried worker earning less than $49,000 annually at a company with at least 51 employees would be entitled to overtime for hours exceeding 40 per week. Under a plan tied to the state minimum wage, the threshold would rise to $80,000 in annual salary by 2026.
Companies with no more than 50 people on their payroll would be subject to a trigger level of $35,100 in annual salary, more in keeping with the government’s proposed threshold of $35,308. But the qualifying line is also expected to rise over a six-year stretch.
Currently, only salaried workers earning less than $13,000 annually are entitled by Washington law to overtime, though federal requirements preempt the rule. The federal trigger level is currently $23,660.
The pool of qualifying employees would also be enlarged by a simplification of the so-called duties test, which exempts some salaried employees on the basis of the work they do. Critics of the current situation say employers can skirt the salary specification by arguing that an employee is engaged in managerial and administrative functions, and hence not entitled to overtime.
"The current system is out of date. It's at risk of failing tens of thousands of workers by broadly defining what a white collar worker is, which allows businesses to pay salaries that may be even less than minimum wage," L&I Director Joel Sacks said in a statement. "That's especially true for employees who are expected to work well over 40 hours a week, but don't get paid overtime.”
The new Washington state rules would take effect July 1, 2020. About 77,000 employees currently exempt from overtime payment requirements could qualify as of that date for time-and-a-half pay, with the tally rising to 250,000 by 2026, L&I said.
Compared to the other states raising the trigger level for overtime, Washington’s thresholds are modest. Massachusetts intends to hold hearings in two weeks on a plan to managers with a salary under $65,000 a year.
California is in the process of raising its bar to $62,400, and New York is working toward a level of $58,500. Pennsylvania announced that it will adopt a threshold of $47,000.
L&I intends to hold hearings on the new overtime regulations before issuing the final updated rules.