Employee Classification: Washington

Employee Classification requirements for other states

Federal law and guidance on this subject should be reviewed together with this section.

Author: XpertHR Editorial Team

Summary

Minimum Wage and Overtime Exemptions

Several individuals are excluded from the definition of "employee" under Washington state's Minimum Wage Act and are thereby exempt from the state's minimum wage and overtime requirements. +Wash. Rev. Code § 49.46.010.

Salary Thresholds

To qualify for an exemption, most employees must be compensated on a salary or fee basis, exclusive of board, lodging, or other facilities, as follows:

Date Minimum Weekly Salary Level
Small Employers
(50 or Fewer Employees)1
Large Employers
(51 or More Employees)1
Current 50 × the minimum wage ($675)
January 1, 2021 60 × the minimum wage ($810 + CPI) 70 × the minimum wage ($945 + CPI)
January 1, 2022 70 × the minimum wage ($945 + CPI)
January 1, 2023 70 × the minimum wage ($945 + CPI) 80 × the minimum wage ($1,080 + CPI)
January 1, 2024 80 × the minimum wage ($1,080 + CPI)
January 1, 2025 80 × the minimum wage ($1,080 + CPI) 90 × the minimum wage ($1,215 + CPI)
January 1, 2026 90 × the minimum wage ($1,215 + CPI)
January 1, 2027 90 × the minimum wage ($1,125 + CPI) 100 × the minimum wage ($1,350 + CPI)
January 1, 2028 100 × the minimum wage ($1,350 + CPI)

1 The size of the employer is based solely on the number of Washington-based employees it employs at the time of the effective date for each increase. Each Washington-based employee counts as an employee for the purposes of determining the size of the employer, regardless of whether that employee works full-time or part-time. An employer classified as employing fewer than 50 employees under +Rev. Code Wash. (ARCW) § 50A.10.030(8)(c) may rely on that classification for purposes of determining the size of the employer for the following calendar year.

2 The amended rules adopted on December 11, 2020, at WAC 296-128-545(9) state that the minimum salary threshold is 100 x minimum wage for all employers in 2026, not 2028, in apparent contradiction of WAC 296-128-545(7). Technical corrections adopted April 7, 2020, fix the incorrect date.

Definitions

The following definitions are used for Washington's employee classification regulations. The definitions align closely with federal regulations, but are not identical. Much of the federal guidance is not included in the Washington regulations. Where terms are identical, the Washington State Department of Labor & Industries (L&I) intends to rely on the interpretations of the current federal regulations, according to an explanatory statement.

  • Customarily and regularly means a frequency that must be greater than occasional but which, of course, may be less than constant. Tasks or work performed "customarily and regularly" includes work normally and recurrently performed every workweek; it does not include isolated or one-time tasks.
  • Educational establishment means an elementary or secondary school system, an institution of higher education, or other educational institution.
  • Exclusive of board, lodging, or other facilities means "free and clear" or independent of any claimed credit for noncash items of value that an employer may provide to an employee. Thus, the costs incurred by an employer to provide an employee with board, lodging, or other facilities may not count towards the minimum salary amount required for an exemption.
  • Primary duty means the principal, main, major or most important duty that the employee performs. Determination of an employee's primary duty must be based on all the facts in a particular case, with the major emphasis on the character of the employee's job as a whole. Because the burden of proving an exception to the definition of "employee" falls on the employer claiming the exception, the burden falls on the employer to demonstrate that the employees meet the primary duty requirement. The amount of time spent performing exempt work can be a useful guide in determining whether exempt work is the primary duty of an employee. Employees who spend more than 50% of their time performing exempt work will generally satisfy the primary duty requirement. Employees who do not spend more than 50% of their time performing exempt duties may meet the primary duty requirement if the other factors support such a conclusion. Factors to consider when determining the primary duty of an employee include, but are not limited to:
    • The relative importance of the exempt duties as compared with other types of duties;
    • The amount of time spent performing exempt work;
    • The employee's relative freedom from direct supervision; and
    • The relationship between the employee's salary and the wages paid to other employees for the kind of nonexempt work performed by the employee.

+WAC 296-128-505.

Executive Employees

Employees will qualify as exempt executive employees if they:

  • Have a primary duty of management of the enterprise in which they are employed or of a customarily recognized department or subdivision thereof;
  • Customarily and regularly direct the work of two or more other employees;
  • Have the authority to hire or fire other employees or have their suggestions and recommendations as to the hiring, firing, advancement, promotion, or any other change of status of other employees be given particular weight; and
  • Are compensated on a salary or fee basis at the specified rate.

Employees also will qualify as exempt executive employees if they:

  • Own at least a bona fide 20% equity interest in the enterprise in which they are employed, regardless of whether the business is a corporate or other type of organization; and
  • Are actively engaged in its management.

Two or more other employees means two full-time employees or their equivalent. One full-time and two half-time employees, for example, are equivalent to two full-time employees. Four half-time employees are also equivalent. Hours worked by an employee may not be credited more than once for different executives.

Management includes, but is not limited to, activities such as:

  • Interviewing, selecting, and training of employees;
  • Setting and adjusting their rates of pay and hours of work;
  • Directing the work of employees;
  • Maintaining production or sales records for use in supervision or control;
  • Appraising employees' productivity and efficiency for the purpose of recommending promotions or other changes in status;
  • Handling employee complaints and grievances;
  • Disciplining employees;
  • Planning the work;
  • Determining the techniques to be used;
  • Apportioning the work among the employees;
  • Determining the type of materials, supplies, machinery, equipment or tools to be used or merchandise to be bought, stocked and sold;
  • Controlling the flow and distribution of materials or merchandise and supplies;
  • Providing for the safety and security of the employees or the property;
  • Planning and controlling the budget; and
  • Monitoring or implementing legal compliance measures.

A customarily recognized department or subdivision must have a permanent status and a continuing function. It need not be physically within the employer's establishment and may move from place to place. When an enterprise has more than one establishment, the employee in charge of each establishment may be considered in charge of a recognized department or subdivision of the enterprise. Continuity of the same subordinate personnel is not essential to the existence of a recognized department or subdivision with a continuing function.

+WAC 296-128-510.

Administrative Employees

Employees will qualify as exempt administrative employees if they:

  • Have a primary duty of management of the performance of office or nonmanual work directly related to the management or general business operations of the employer or the employer's customers;
  • Have a primary duty that includes the exercise of discretion and independent judgment with respect to matters of significance; and
  • Are compensated on a salary or fee basis at the specified rate.

Employees also will qualify as exempt administrative employees if they:

  • Have a primary duty of performing administrative functions directly related to academic instruction or training in an educational establishment or department or subdivision thereof; and
  • Are compensated on a salary or fee basis at the specified rate or or on a salary basis which is at least equal to the entrance salary for teachers in the educational establishment by which they are employed.

The term directly related to management or general business operations means work directly related to assisting with the running or servicing of the business, as distinguished, for example, from working on a manufacturing production line or selling a product in a retail or service establishment.

The term discretion and independent judgment means the comparison and the evaluation of possible courses of conduct, and acting or making a decision after the various possibilities have been considered. The phrase "discretion and independent judgment" must be applied in the light of all the facts involved in the particular employment situation in which the question arises. The exercise of discretion and independent judgment implies that the employee has the authority to make an independent choice, free from immediate direction or supervision. However, employees can exercise discretion and independent judgment even if their decisions or recommendations are reviewed at a higher level. The exercise of discretion and independent judgment must be more than the use of skill in applying well-established techniques, procedures or specific standards described in manuals or other sources. The exercise of discretion and independent judgment also does not include clerical or secretarial work, recording or tabulating data, or performing other mechanical, repetitive, recurrent or routine work.

+WAC 296-128-520.

Professional Employees

Employees will qualify as exempt professional employees if they:

  • Have a primary duty consisting of the performance of work:
    • Requiring knowledge of an advanced type in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction; or
    • Requiring invention, imagination, originality or talent in a recognized field of artistic or creative endeavor; and
  • Are compensated on a salary or fee basis at the specified rate.

Employees also will qualify as exempt professional employees if they:

  • Have a primary duty of teaching, tutoring, instructing or lecturing in the activity of imparting knowledge and are employed and engaged in this activity as a teacher in an educational establishment by which the employee is employed and are compensated on a salary or fee basis (however, the specified rates for other employees do not apply to these teaching professionals); or
  • Hold a valid license or certificate permitting the practice of law or medicine or any of their branches and are actually engaged in the practice thereof; or
  • Hold the requisite academic degree for the general practice of medicine and are engaged in an internship or resident program pursuant to the practice of the profession (employees engaged in internship or resident programs, whether or not licensed to practice prior to commencement of the program, qualify as exempt professionals if they enter such internship or resident programs after the earning of the appropriate degree required for the general practice of their profession).

In the case of medicine, the exemption applies to physicians and other practitioners licensed and practicing in the field of medical science and healing or any of the medical specialties practiced by physicians or practitioners. The term "physicians" includes medical doctors including general practitioners and specialists, osteopathic physicians (doctors of osteopathy), podiatrists, dentists (doctors of dental medicine), and optometrists (doctors of optometry or bachelors of science in optometry).

"Customarily acquired by a prolonged course of specialized intellectual instruction" restricts the exemption to professions where specialized academic training is a standard prerequisite for entrance into the profession. The exemption is also available to employees who attained substantially the same advanced knowledge through a combination of work experience and intellectual instruction.

A field of science or learning means the traditional professions of law, medicine, theology, accounting, actuarial computation, engineering, architecture, teaching, various types of physical, chemical and biological sciences, pharmacy, and other similar occupations that have a recognized professional status.

A recognized field of artistic or creative endeavor includes music, writing, acting and the graphic arts.

A work requiring advanced knowledge means work that is predominantly intellectual in character, and that includes work requiring the consistent exercise of discretion and judgment, as distinguished from performance of routine mental, manual, mechanical or physical work. An employee who performs work requiring advanced knowledge generally uses the advanced knowledge to analyze, interpret, or make deductions from varying facts or circumstances. Advanced knowledge cannot be attained at the high school level.

Computer Professionals

Employees will qualify as exempt computer professional employees if they:

  • Are a computer system analyst, computer programmer, software engineer, or other similarly skilled worker; and
  • Have a primary duty consisting of one of the following:
    • The application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software, or system functional specifications;
    • The design, development, documentation, analysis, creation, testing or modification of computer systems or programs, including prototypes, based on and related to user or system design specifications;
    • The design, documentation, testing, creation or modification of computer programs related to machine operation systems; or
    • A combination of the aforementioned duties, the performance of which requires the same level of skills; and
  • Are compensated on a salary or fee basis or on an hourly basis at a rate as follows:
Date Minimum Hourly Rate for Computer Employees
Small Employers
(50 or Fewer Employees)1
Large Employers
(51 or More Employees)1
Current $27.63 2.75 × the minimum wage ($37.125)
January 1, 2021 2.75 × the minimum wage ($37.125 + CPI) 3.5 × the minimum wage ($47.25 + CPI)
January 1, 2022 3.5 × the minimum wage, regardless of employer size ($47.25 + CPI)

1 The size of the employer is based solely on the number of Washington-based employees it employs at the time of the effective date for each increase. Each Washington-based employee counts as an employee for the purposes of determining the size of the employer, regardless of whether that employee works full-time or part-time. An employer classified as employing fewer than 50 employees under +Rev. Code Wash. (ARCW) § 50A.10.030(8)(c) may rely on that classification for purposes of determining the size of the employer for the following calendar year.

The exemption for computer professionals does not include:

  • Employees engaged in the manufacture, repair, or maintenance of computer hardware and related equipment; or
  • Employees whose work is highly dependent upon, or facilitated by, the use of computers and computer software programs (e.g., engineers, drafters and others skilled in computer-aided design software), but who are not primarily engaged in computer systems analysis and programming or other similarly skilled computer-related occupations (i.e., computer system analyst, computer programmer, software engineer, or other similarly skilled worker).

Outside Salespersons

Employees will qualify as exempt outside salespersons if they:

  • Have a primary duty that is:
    • Making sales; including any sale, exchange, contract to sell, consignment for sale, shipment for sale or other disposition; or
    • Obtaining orders or contracts for services or for the use of facilities for which a consideration will be paid by the client or customer; or
  • Are customarily and regularly engaged away from the employer's place or places of business in performing such primary duty;
  • Are compensated on a salary or fee basis (however, the specified rates for other employees do not apply to outside salespersons); and
  • Are advised of their employee status as an "outside salesperson."

Technical corrections adopted April 7, 2020, strike language that was inadvertently included in the final rule adopted on December 11, 2020, which would have:

  • Included the demonstration of products or equipment for sale and the sale of services and performance of the service sold when the compensation to the employee is computed on a commission basis as a qualifying primary duty; and
  • Required that outside salespersons spend no more than 20% of the hours worked in the workweek by nonexempt employees on work of a nature other than the primary duties listed above (provided that work performed incidental to and in conjunction with the employee's own outside sales or solicitations, including incidental deliveries and collections, is not regarded as nonexempt work).

Removing the unintended language brings the state's rules back into closer alignment with the federal regulations, according to L&I.

Other Exempt Employees

The following other employees also are exempt from Washington's minimum wage and overtime requirements:

  • Certain agricultural employees working as hand harvest laborers and paid on a piece rate basis in an operation that has been, and is generally and customarily recognized as having been, paid on a piece rate basis in the region of employment, who commute daily from their permanent residence to the farm on which they are employed, and who have been employed in agriculture less than 13 weeks during the preceding calendar year;
  • Casual laborers employed in or about a private home, but not in the course of the employer's trade, business or profession;
  • Volunteers engaged in the activities of an educational, charitable, religious, state or local governmental body or agency, or nonprofit organization where the employer-employee relationship does not in fact exist or where the services are rendered to such organizations gratuitously;
  • Individuals employed full time by any state or local governmental body or agency who provide voluntary services but only with regard to the provision of the voluntary services;
  • Newspaper vendors or carriers;
  • Railroad and pipeline employees subject to regulation by Part 1 of the Interstate Commerce Act (see Wage and Hour > Employee Classification > Transportation Employees);
  • Individuals engaged in forest-protection and fire-prevention activities;
  • Individuals employed by any charitable institution charged with child care responsibilities engaged primarily in the development of character or citizenship or promoting health or physical fitness or providing or sponsoring recreational opportunities or facilities for young people or members of the armed forces of the United States;
  • Individuals whose duties require that they reside or sleep at the place of their employment or who otherwise spend a substantial portion of their work time subject to call and not engaged in the performance of active duties;
  • Residents, inmates or patients of a state, county, or municipal correctional, detention, treatment or rehabilitative institution;
  • Elected and appointed officials;
  • Employees of the state legislature;
  • Members of Washington state ferry crews; and
  • Seamen on foreign vessels.

+Wash. Rev. Code § 49.46.010.

Overtime-Only Exemptions

Several employees are exempt from Washington's overtime requirement (but not necessarily its minimum wage requirement). +Wash. Rev. Code § 49.46.130.

Commissioned Retail or Service Salespersons

Employees of a retail or service establishment are exempt from Washington state's overtime requirements if:

  • Their regular rate of pay is more than one and one-half times the minimum wage (see Wage and Hour > Minimum Wage: Washington); and
  • More than half of their compensation for a representative period (of at least one month) represents commissions on goods or services.

Commissioned Vehicle Salespersons

Salespersons who primarily sell to ultimate purchasers automobiles, trucks, recreational vessels, recreational vessel trailers, recreational vehicle trailers, recreational campers, manufactured housing or farm implements are exempt from Washington state's overtime requirements if they are paid a straight commission, a salary plus commission, or a salary plus bonus applied to gross salary that is greater than what they would have earned if they were paid the minimum wage and overtime for all hours worked beyond 40 in a workweek.

Other Employees

The following other employees also are exempt from Washington state's overtime requirements:

  • Seamen, regardless of whether or not they are employed on an American vessel or a foreign vessel;
  • Seasonal employees who are employed at concessions and recreational establishments at agricultural fairs, including those seasonal employees employed by agricultural fairs, within the state provided that the period of employment for any seasonal employee at any or all agricultural fairs does not exceed fourteen working days a year;
  • Any individual employed as a motion picture projectionist if that employee is covered by a contract or collective bargaining agreement which regulates hours of work and overtime pay;
  • Truck drivers and bus drivers subject to the federal Motor Carrier Act, if the compensation system under which they are paid includes overtime pay reasonably equivalent to that required by Washington state (see Wage and Hour > Overtime: Washington);
  • Farm workers who cultivate the soil or who raise or harvest any agricultural or horticultural commodity;
  • Farm workers employed by the owner or tenant or other operator of a farm in connection with the operation, management, conservation, improvement, or maintenance of such farm and its tools and equipment;
  • Farm workers who pack, package, grade, store or deliver to storage, or to market or to a carrier for transportation to market, any agricultural or horticultural commodity; and
  • Farm workers engaged in commercial canning, commercial freezing, or any other commercial processing, or with respect to services performed in connection with the cultivation, raising, harvesting and processing of oysters or in connection with any agricultural or horticultural commodity after its delivery to a terminal market for distribution for consumption;

Future Developments

There are no developments to report at this time. Continue to check XpertHR regularly for the latest information on this and other topics.