AGC seeks changes to burdensome overtime draft rule


The Department of Labor & Industries (L&I) is changing employment rules that determine which salaried employees in Washington are required by law to receive overtime pay, minimum wage and paid sick leave. These changes will affect Executive, Administrative, and Professional (EAP) workers across all industries in Washington State.

Changes to these rules will mean that some employers will have to provide overtime, minimum wage and paid sick leave to employees who previously were considered exempt. These employees will have new rights and protections under the Minimum Wage Act.

L&I issued a draft of its proposal, and AGC has raised strong concerns, particularly with the potential $70,000 annual salary needed to be considered exempt.

“The proposed salary threshold of between 2 and 2.5 times the state minimum wage is too high,” said AGC Chief Lobbyist Jerry VanderWood in his comments to L&I. “This proposed threshold is dramatically higher than that previously proposed by the Obama administration and, as the Eastern District Court of Texas noted when overturning the proposed federal rule, the salary threshold must be set at a reasonable level as not to make the duties test irrelevant. We believe the salary threshold should not be used as a vehicle to exclude significant numbers of employees from the statutory exemptions when they are, in fact, performing exempt duties.”

AGC also pushed back on the proposed effective date of Jan. 1, 2020. “We would like the department to keep in mind the major new administrative changes that businesses have had to deal with recently,” VanderWood said. “Paid sick leave went into effect Jan. 1, 2018; tax withholding and hour tracking for paid family and medical leave take effect Jan. 1, 2019; the benefit portion of paid family and medical leave takes effect Jan. 1, 2020. For this new rule, which appears to be a significant change, to also take effect Jan. 1, 2020 would be a difficult challenge particularly for small businesses who would still be trying to learn and comply with all the other recent and complex changes. We suggest an effective date of Jan. 1, 2021.”

The U.S. Department of Labor is currently considering changes to the federal rule, but the salary threshold it is considering is reported to be less than half the amount in L&I’s proposed rule for the state. AGC encouraged L&I to adopt a rule that mirrors the federal rule, even if that means waiting for the federal work to be completed.

AGC thanks several members who provided input for its response. All members are encouraged to provide their own input to L&I. You can see AGC’s full remarks, and learn more about the proposed rules and how to comment, by clicking here.

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For more information, contact AGC Chief Lobbyist Jerry VanderWood, 360.352.5000.