Washington State Considers Raising Minimum Salary for Overtime-Exempt Workers as High as $74,880

Author: Michael Cardman, XpertHR Legal Editor

August 13, 2018

The minimum salary for most overtime-exempt employees in Washington state could be raised as high as $74,880 under a proposal being considered by the state labor department.

The Washington State Department of Labor & Industries has released what it is calling "draft rule concepts" for updating its regulations governing the overtime exemptions for executive, administrative and professional employees.

Based on feedback received from business and labor stakeholders, the concepts provide a menu of sorts from which the department may choose when updating the regulations. Options for the weekly minimum salary level are:

  • A multiple of the state minimum wage, either:
    • One and one-half times the minimum wage (which would be $720 per week in 2019);
    • Two times the minimum wage (which would be $960 in 2019); or
    • Three times the minimum wage (which would be $1,440 in 2019);
  • A fixed level based on the current:
    • Statewide median weekly wage ($956);
    • Statewide average weekly wage ($1,205); or
    • Weekly wage for the median salaried worker in the Western Census region ($1,329);
  • Multiple salary levels that vary by business size or geography; or
  • A salary level equal to the federal salary threshold ($455).

The draft rule concepts also provide options for automatic updating, duties tests, highly compensated employees and effective dates.

The current regulations were issued in 1976, at which time the minimum salary for most overtime-employees in Washington was set between $155 per week (or $8,060 per year) and $250 per week (or $13,000 per year), depending on the type of employee and the duties he or she performs. In the meantime, the federal minimum salary level for most overtime-exempt employees was raised to $455 per week (or $23,660 per year) in 2004.

In 2016, the Obama administration tried to raise the minimum salary threshold to $47,476, but this increase ultimately was struck down by the courts. The US Department of Labor (DOL) has said it plans to issue new rules in January 2019 that would raise the minimum salary to a level expected to be "somewhere around $33,000."

Currently, a handful of states have minimum salary levels for overtime-exempt employees that are higher than the federal minimum of $455. Some observers had predicted that more states would raise their minimum salary levels after the Obama administration's increase fell through in 2016. However, so far, only Pennsylvania has proposed doing so.

Employers are invited to comment on Washington's draft rule concepts online or by emailing EAPRules@Lni.wa.gov before September 5.

The department plans to issue proposed regulations this fall. It will then hold public hearings and solicit more public comments before finalizing the regulations.