OLYMPIA, Wash. (AP) – More than 250,000 workers in Washington state would be newly eligible for overtime pay by 2026 under a rule proposed Wednesday by the state’s Department of Labor and Industries.
The state agency announced that it had formally filed the proposed rule, which would more than triple the salary threshold under which employers must pay overtime to their workers. Under the proposed rule, the higher salary threshold will be set as a percentage of the state’s minimum wage and will vary depending on the size of the company, until 2026. The state’s minimum wage, currently $12 an hour, will rise to $13.50 an hour next year.
The thresholds would also increase yearly, starting July 1, 2020. The agency said that following a rulemaking process that will include public hearings across the state, it expected the new overtime rules to be adopted by the end of the year.
The proposed rule is the first update to the state’s overtime rules in more than four decades and would shrink the so-called “white collar exemption” that exempts workers who perform “executive, administrative or professional” duties from overtime and minimum wage requirements.
Washington workers are currently covered by the federal threshold, in which salaried positions are exempt from overtime pay, except for positions that pay less than $455 a week, or $23,660 per year. The state’s overtime threshold, last updated 43 years ago, is even lower, at $13,000. In cases where an employee is subject to both state and federal overtime laws, the employee is entitled to overtime according to the higher standard, according to the U.S. Department of Labor.
“The current system is out of date,” Joel Sacks, director of the state Department of Labor and Industries, said in a written statement. “We want to make sure that people who legitimately deserve overtime get paid for the extra hours they work.”
Under the proposal, employers with 50 or fewer employees would have to pay overtime to workers who are making less than $675 a week – or about $35,000 a year – starting July 1, 2020. For larger companies, workers earning less than $49,000 a year can be paid time-and-a-half pay when they exceed 40 hours a week. In 2020, the total number of employees affected would be about 77,000, growing to about 252,000 by 2026, when the overtime-exempt threshold for all employees in the state reaches $1,536 a week, or nearly $80,000 a year.
Four states are already in the process of raising or considering raising their thresholds, said Paul Sonn, state policy director with the National Employment Law Project.
California is currently phasing its overtime threshold up to $62,400, New York is phasing its up to $58,500, and Pennsylvania has announced a rule raising its threshold to $47,000. Massachusetts is holding a hearing on June 18 on a bill to raise its overtime threshold to $65,000, Sonn said.
Washington state’s proposal comes months after the U.S. Department of Labor announced a proposal to raise the federal salary threshold to receive mandatory overtime to $35,308 a year. That March proposal from President Donald Trump’s administration is a smaller increase to the threshold than what had been proposed under the Obama administration, which sought to mandate overtime pay to those earning less than about $47,000 a year. That plan was blocked after more than 20 states sued.