Changes to Washington’s overtime rules could significantly boost the number of professional workers eligible for time-and-a-half pay.
Employees earning up to $74,800 in 2019 could be eligible for overtime, based on a draft concept released by the state Department of Labor and Industries for public comment.
The concept links overtime eligibility to a multiplier of the state’s minimum wage, which increases to $12 per hour next year and $13.50 per hour in 2020.
Under one proposal, professional workers earning up to $37,440 in 2019 – 1.5 times Washington’s minimum wage – would be eligible for overtime pay when they work more than 40 hours per week.
Under the most aggressive proposal, workers earning up to $74,800 in 2019 – three times the minimum wage – would qualify. Some exemptions would apply, based on the individual’s work duties.
Washington hasn’t updated its overtime rules since 1976 and lags behind federal standards. The draft concept is the first run at updating the rules, which will be refined and subject to two more rounds of public input, said Matthew Erlich, a Labor and Industries spokesman.
As part of the process, the state will conduct a cost-benefit analysis and study the impact on small businesses.
Working Washington, a labor rights group, supports stronger rules, saying they’ll protect employees from regularly being required to work free overtime.
“More and more of us are working more and more hours – but we’re not getting paid for it,” Working Washington says on its website. “Pretty much all an employer has to do is call someone a manager and pay them a salary of at least $24,000 a year, and they can make them work as many hours as they feel like.”
But the proposal is getting backlash from business groups and nonprofits, which say L&I’s draft concept goes too far.
“This rule will affect small businesses, nonprofits and daycares,” Todd Mielke, Greater Spokane Incorporated’s chief executive officer, told L&I officials at a public meeting in Spokane Valley last week.
GSI represents about 1,100 employers in Spokane County. Most of those employers have 50 or fewer workers, Mielke said.
Small employers already face rising labor costs from Washington’s higher minimum wage and new requirements for paid sick leave, Mielke and others said. Expanding overtime eligibility has a piling-on effect, they said.
Restaurant owners and hotel operators said they’d be forced to evaluate their staffing, either cutting jobs or hiring part-time help. Changes in overtime rules also could affect research assistant positions at Washington State University, said Lisa Gehring, a senior director at WSU’s human resources department.
At Boys & Girls Club of Spokane County, the state’s higher minimum wage already has added about $50,000 to payroll costs, said Dick Hanlin, the executive director. The nonprofit serves about 2,000 local kids ages 6 to 18, mostly from low-income families.
Stricter overtime rules could force the Boys & Girls Club to reduce hours for entry-level managers or hire more part-time workers, Hanlin said. While it’s unusual for entry-level managers to work more than 40 hours per week, he said it sometimes is necessary during special events or big club fundraisers.
“It doesn’t necessarily help the workplace; it hurts,” Hanlin said of the proposed rules.
Higher operating costs also force the club to either raise more money or consider fee increases for its low-income clientele, he said.
Both the Washington Retail Association and the Association of Washington Business want the state to follow the federal government’s lead on overtime rules.
“Really, L&I should slow down,” said Bob Battles, AWB’s general counsel. “We’d encourage them to match or mirror what the feds have. It limits the impact on small businesses … and prevents a patchwork of regulations in different states.”
L&I started updating Washington’s overtime rules in 2016, when the federal government was updating its rules, said Erlich, the agency spokesman. At the time, the U.S. Department of Labor proposed expanding overtime eligibility to workers earning up to $47,500, with some exceptions.
But the new federal rule got challenged in Texas, preventing it from taking effect. The U.S. Department of Labor held listening sessions this fall to get input on another effort to update the rule.
In Washington, L&I officials decided they needed to move forward with an update of the state’s overtime rules instead of waiting on a federal rule change, Erlich said.
There is no timeline for finalizing the new overtime rules, he said.