State moves to close overtime pay loophole

Long-awaited rule update will help Washington workers ‘get their time back’

TUMWATER, Wash. (June 5, 2019) — Washington state is poised to begin closing a gigantic loophole in the state’s wage-and-hour laws — and to help its citizens bring their working lives back into balance.

The state Department of Labor and Industries announced today its long-awaited proposed rule to restore overtime pay rights. L&I has proposed to gradually increase the overtime salary threshold, below which all workers in the state must be paid time-and-a-half for working beyond a 40-hour workweek, to 2.5 times the state minimum wage by 2026. That would mean anyone making less than about $80,000 per year seven years from now, regardless of whether they are classified as hourly or salaried employees, would get time-and-a-half pay beyond 40 hours per week.

The current salary threshold, which has not been updated since 1976 to adjust for inflation, is $23,660 per year. That’s less than what a full time minimum wage worker in Washington earns today. Anyone who earns more than $23,660 that can be declared “exempt” salaried employees and forced to work additional hours beyond 40 per week for free. In the decades that salary threshold has been frozen, the percentage of American workers eligible for overtime pay has gone from more than 60% in the 1970s to less than 7% today.

The proposed rule is projected to restore time-and-a-half pay to more than 250,000 workers who’ve lost those protections because rules haven’t been updated in more than 40 years. And the support for L&I and its proposed rule was immediate and widespread.

“As working families struggle to pay the bills, they have been working longer and longer hours, sometimes for free because of our outdated overtime pay rules,” said Larry Brown, President of the Washington State Labor Council, AFL-CIO. “This update is badly needed so companies can’t exempt so many workers from the 40-hour workweek. It will mean extra pay for some, but importantly, it will help many people in Washington get their time back, too.”

Brown added that L&I’s proposed rule will help restore some balance to the working lives of thousands of Washington families.

“When your workweek never ends, your life becomes a constant scramble, and it’s almost impossible to maintain your health, care for your family, and make some time for yourself,” Brown said. “But when an employer has to pay more for extra work hours, it means more parents have more time for their children, more neighbors have time for their communities, and more people have time to pursue their passions.”

Inslee: States must step up where the federal government has failed

The Trump administration recently announced plans to dramatically scale back an Obama-era rule to update the federal salary threshold for overtime exemption. The Department of Labor wants to increase it to just $35,000 per year. Millions of Americans — well over half of the workers who would have gotten new or strengthened overtime protections under the 2016 rule to raise the threshold to $47,500 — will be left behind by Trump administration rule. Had the Obama rule, which provided for automatic inflationary updates of the threshold, remained in place, the threshold would be $51,064 today and $55,000 in 2022.

Gov. Jay Inslee, who directed L&I last year to begin the rule-making process for updating state overtime standards, said it is necessary because “yet again, it is up to the states to step up where the federal government has failed.”

“Washington state is stepping up to protect workers where the federal government has not,” Inslee wrote in a column that appeared in The Stand last fall. “Updating our decades-old overtime rule is one sensible step towards helping more workers share in our economic prosperity.”

L&I, which conducted “pre-draft” hearings on the rule update last fall,  has scheduled public hearings across the state on the proposed rule. Union members and other advocates for work-life balance are urged to mark their calendars and plan to attend the hearing near them. Check the Overtime Rulemaking web page for details on this public hearing schedule:

• Tumwater, July 15 at the Dept. of Labor & Industries headquarters.
• Seattle, July 16 at The Swedish Club.
• Bellingham, July 17 at Four Points by Sheraton Bellingham Hotel & Conference Center.
• Ellensburg, Aug. 5 at Hal Holmes Community Center.
• Kennewick, Aug. 6 at Springhill Suites by Marriot Kennewick Tri-Cities.
• Spokane, Aug. 7 at CenterPlace Regional Event Center.

Visit wslc.org/overtime for more information about L&I’s overtime rule and how you can support its passage.