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New overtime rules begin Jan. 1

The Department of Labor & Industries announced updates to Washington’s overtime rules. These rules will go into effect on July 1, 2020 with phased-in implementation through 2028. However, Washington employers will be required to follow new federal overtime rule which takes effect on Jan. 1, 2020. The recently updated federal threshold, at $684 a week ($35,568 a year), will be slightly higher than Washington’s until 2021.

So the new fed rule kicks in on Jan. 1.  Then, beginning July 1, the state minimum salary threshold will increase to $675 a week ($35,100 a year) for all businesses, which is 1.25 times the state’s minimum wage. The threshold will increase incrementally until 2028 when it is expected to reach approximately $1,603 a week (about $83,356 a year) for an overtime exempt worker, 2.5 times the minimum wage.

Employers should become familiar with the state’s salary threshold implementation schedule, as there are differences in the timeline for employers with 1-50 employees versus those with 51 or more employees.

In addition, the adopted rules also update the job duties tests that are used, with the salary threshold, to determine if an employee can be exempt from overtime.

AGC raised concerns about the new overtime rule throughout the process, taking particular issue with the high salary threshold of more than $83,000.  L&I nevertheless maintained the high threshold, but made a few small improvements to the final rule, including a longer phase-in (eight years rather than six years).

For more information, visit the overtime rule page on L&I’s website.

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