On June 5, 2019, the Washington Department of Labor & Industries issued proposed amendments to Washington State’s white-collar overtime exemption regulations.  Both under the federal Fair Labor Standards Act (FLSA) and the Washington state law, employers generally must pay exempt employees a salary of a specified minimum amount, and the employees must perform exempt duties.  If adopted and not successfully challenged in court, the proposed amendments would increase the minimum salary level necessary for most exemptions to apply in Washington to an initial rate of $49,140/year effective July 1, 2020 ($35,100/year for employers with 50 or fewer employees in Washington), ramping up to $70,200/year, plus consumer price index (CPI) adjustments, for all employers effective January 1, 2026.  For the exemption applicable to computer professionals, which both the federal and state laws permit to be paid by the hour instead of via salary, the minimum for employees paid hourly would increase to $37.13/hour, effective July 1, 2020, for employers with more than 50 employees in Washington, rising to $47.25/hour, plus CPI adjustments, for all employers effective January 1, 2022.

The proposed amendments would also amend the duties tests under Washington state law to conform to the federal FLSA duties tests, except that the amendments would continue to leave Washington without a highly compensated employee exemption.

Proposed Increased Minimum Pay Rates for Exempt Status

For the executive, administrative and professional exemptions, the proposed minimum salary basis and fee basis rates are:

For the hourly computer professional exemption, the proposed minimum hourly rates are:

For the outside sales exemption that is available under both the FLSA and Washington state law, there would continue to be no minimum pay rate under the FLSA or Washington state law.  The proposed amendments would retain a unique Washington requirement, however, that outside salespeople be compensated on a guaranteed salary, commission or fee basis, and be advised of their status as outside sales employees.

For the professional exemption for teachers, the proposed amendments would require payment on a salary or fee basis, but without mandating a minimum pay rate.  The FLSA does not specify a form or minimum amount of payment for exempt teachers.

Proposed Changes to the Duties Tests

The proposed amendments would amend the Washington duties tests to bring the state regulations into conformity with the revised duties tests adopted under the FLSA in 2004.  As already noted, however, the proposed amendments would continue to leave Washington without a highly compensated employee exemption.

Deadline for Comments

Comments on the proposed rule amendments are due by September 6, 2019.  The proposal has a projected adoption date of December 3, 2019.