A proposal by the Washington State Department of Labor & Industries to change overtime rules for salaried employees has drawn concern from local businesses while others claim it could put more money in workers’ pockets.
The proposal, introduced by the department last year, significantly increases the number of employees that would receive overtime pay by raising the state’s salary threshold for exempt workers to nearly $80,000 a year and updating a test used to determine who qualifies for the exemption.
The rule changes – which indicate salaried executives, administrative or professional workers need to make above $80,000 to be exempt from overtime – would be phased in over seven years beginning July 1, 2020, and increase faster for employers with 51 or more workers.
State overtime rules were established in 1976, when the minimum wage was $2.30 an hour and the exemption for overtime pay was $13,000 a year. But state law hasn’t been updated to match federal overtime laws, which were changed in 2004, according to L&I.
The proposed salary threshold would be 2.5 times higher than the state minimum wage, according to data from L&I.
Gov. Jay Inslee, who directed the state agency to update the overtime rules, stated in June that it means workers will receive fair compensation for the amount of work exceeding 40 hours a week, while the Association of Washington Business called it “a new super minimum wage.”
L&I held a public meeting Wednesday at CenterPlace Regional Event Center in Spokane Valley to discuss the changes as well as gather input from business owners and the community.
Firefighter Randy Marler testified in support of the changes in overtime.
“As a firefighter, long shifts and overtime are just part of my job. That means long periods of time away from my wife, our four kids and the rest of our family,” he said. “But it’s worth the sacrifice when I’m paid time and a half for the extra hours so that I can better provide and take care of them.”
Marler added that salaried workers for too many years have been staying late at work, pulling double shifts or working weekends.
“It doesn’t matter if you are a firefighter, a nurse, a programmer or professional manager – no one should have to work for free,” he said.
Scott Middleton, government affairs director for the Mechanical Contractors Association of Western Washington, testified in opposition of the overtime rule changes.
The association represents more than 100 mechanical contractors across the state who employ 5,000 plumbers and pipefitters. About 1,200 of those workers are salaried project engineers, project managers and construction managers, he said.
Under the rule changes, contractors would be less inclined to hire entry-level staff, such as college graduates, because company margins wouldn’t allow for an increase in overtime pay for the hours necessary to develop skills and advance into senior-level positions, he added.
Tabitha Gunning, a salary department manager at Super 1 Foods, said the proposed salary threshold is too high and if she’s forced to become an hourly employee under the rule changes, it will reduce flexibility of her current schedule.
“If I am a salaried employee, I can flex my schedule to the needs of the business and reduce a shift to make up for an excess hours I may have worked,” she said.
Other business owners testified in favor of examining an overtime multiplier that’s lower than 2.5 times the state minimum wage.
The proposal doesn’t require businesses to spend more on payroll, raise wages or salaries, said Jack Sorensen, spokesman for Civic Ventures, an organization that supports the proposal.
“If you are saying that’s going to increase your costs, then what you are betraying is the fact that, right now, your business depends on free labor,” he said.
Sorensen said the work-life balance concept exists for a reason and, right now, businesses are taking both time and money from their salaried employees.
“Ultimately, by restoring the overtime protections to 400,000 workers in this state, our workers are going to get their time back, they are going to get more money in their pocket, or they are going to get a little bit of both,” he added.
L&I is accepting public comments until Sept. 6, after which they will be presented to Joel Sacks, director of the department. The overtime proposal could be potentially modified or changed before the final rule is announced in December.
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