Washington now leads nation with overtime protections for workers

The Department of Labor and Industries announced a nation-leading overhaul Wednesday that restores overtime protections for thousands of workers. Washington now has the most progressive rules in the nation, and the update makes sure workers get fairly compensated for overtime work.

The new rules will affect an estimated 250,000 Washington workers once they are fully phased in. The governor believed this change was long overdue and directed L&I to update the overtime rules months ago.

“This is an incredible day for Washington,” Gov. Jay Inslee said. “All people should share in our state’s prosperity. Yet, due to these outdated rules, many have worked long hours without compensation. This is valuable time they could otherwise spend with their families and in their communities.”

Gov. Jay Inslee talks about how the update to overtime rules makes sure salaried workers are paid when they work more than 40 hours a week. (Office of the Governor video)

Washington hasn’t updated its overtime rules since the 1970s. At that time, more than 60 percent of salaried workers received time-and-a-half pay when they worked more than 40 hours a week.

Today that number has dropped to just 7 percent.

The economy was different in 1976. The reimbursement rate was never set to keep pace with rising wage. That’s why the salary number has increasingly become out of date.

L&I led the rule-making effort, held seven public hearings statewide, and made changes to the rules based on that feedback. The update does two important things:

1. It increases the salary amount a worker needs to hit to be exempt from overtime pay. The threshold is now tied to minimum wage, which the state will adjust with inflation starting in 2021. This eliminates a problem that has been years in the making, and ensures the salary threshold will be current for years to come. By the year 2028, the qualifying salary rate will be 2.5 times the state minimum wage, at that time. The state will phase in this increase more slowly for small businesses.

2. It simplifies how employers classify workers into overtime exemption positions. The rules change how Washington determines if an employee’s responsibilities and role qualifies them for overtime pay. The state will now use a job duties test that more closely aligns with the federal standard. The change would make the determination process simpler for employers and it also increases the likelihood that workers land in the right classification.

L&I Director Joel Sacks said the agency received thousands of public comments on their proposed rules over the three-month public process.

“The changes will restore fairness to the state’s overtime rules,” Sacks said. “As a result, thousands of Washington workers will regain the right to overtime and other protections under the state’s Minimum Wage Act.”

Sidney Kenney, service provider and former restaurant worker in Tumwater, shared his overtime story Tuesday. He talked about how many of his employers have expected him to work more than 40 hours in a workweek without compensating him for his time. (Photo courtesy of the Office of the Governor)

Sen. Karen Keiser has long supported updates to overtime protection rules.

“One of the hidden reasons that pay has stubbornly stayed low despite our recovery is that more and more workers are working more and more hours, but not getting paid overtime,” Keiser said. “Given the lack of federal leadership, it is important we set clear, fair standards for Washingtonians at the state level.”

The old rules were bad for jobs, harming the worker and the economy. Some companies made it a common practice to require four employees to work the hours of five people each week, essentially overworking their employees without fair compensation.

The change helps close that loophole. Employers will now have the following choices:

• Limit hours to keep salaried employees at 40 hours a week.
• Pay overtime for any work more than 40 hours in a workweek.
• Raise wages to meet the new threshold and maintain a worker’s overtime-exempt status.

This graphic shows how salaried, overtime exempt employees did not qualify for overtime pay in the past when they worked more than 40 hours a week. The rule updates will fix that problem. (Office of the Governor graphic)

Regardless of the option the employer chooses, workers will either get their personal time back or they will be fairly compensated for the time they give.

Rep. Mike Sells said Washington families will benefit greatly from this update.

“Washington is stepping up to deal with out of date and outmoded overtime rules,” Sells said. “Working families deserve fair treatment, wages and salaries and we should make sure they get a fair chance at getting it.”

In addition to qualifying for overtime pay, nonexempt workers must also receive other protections under the state’s Minimum Wage Act, which includes paid sick leave.

You can read the governor’s op-ed “Fair overtime pay is needed in Washington” on his website.