December 16, 2019
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Major change to overtime rule as state approves $80,000+ minimum for salaried employees



"Washington state is adopting some of the nation's most aggressive overtime rules," The Associated Press reports, after the Department of Labor & Industries approved a rule that, when fully implemented, will set a minimum of $83,400 a year for an employee to be considered salaried and overtime-exempt.

In other words, by 2028, any employee making less than $83,400 must be paid overtime. The new rule takes effect July 1, with phase-in through 2028. At that time, a worker will need to make at least 2.5 times the minimum wage to be exempt from overtime pay requirements.

The implications for employers will be significant, said AWB President Kris Johnson.

"We’re disappointed officials chose to raise the overtime threshold by such a large amount," Johnson said. "The current rule needed updating, but this new rule will require employers to pay salaried workers more than $83,000 per year by the time it's fully implemented. This is a huge increase over the current rule, and one that is likely to carry unintended consequences, especially for small businesses and nonprofit organizations."

He added, "For small businesses and nonprofits that can't afford to pay overtime, the new rule could lead to a reduction in services or program offerings. It could also force some organizations to reclassify employees from salaried to hourly positions, leaving employees with fewer opportunities for advancement and a loss of schedule flexibility."

AWB's Bob Battles expanded on the risks of unintended consequences in an interview with The Spokesman-Review.

"Small businesses and nonprofits are not going to be able to afford this," Battles said, noting that some employees might lose opportunities for advancement that come through working extra time and learning a business.

Battles said AWB will be working with the Legislature on adjustments to the law.

And while the new state rule will be phased in over the coming years, a new federal overtime rule begins Jan. 1. The new federal rule clarifies which perks and benefits must be included in the regular rate of pay, as well as which perks and benefits an employer may provide without including them in the regular rate of pay.

With so many changes to employment law on the state and federal level, AWB's upcoming HR & Employment Law webinar series is timely for employers of all sizes.

And the 2020 AWB Legislative Day & Hill Climb is an opportunity for employers to make their voices heard to lawmakers about the impacts of these and other laws, regulations, rules and mandates.

Contact Bob Battles, AWB government affairs director for employment law, to learn more.



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Spreading Christmas Joy
Holiday Kids Tree

Sharing the Spirit of the Season Across Our State

By AWB President Kris Johnson

As the state's business and manufacturing association, AWB is proud to lead a number of statewide efforts. Perhaps the most heartwarming is our job each December to coordinate the decorations and lighting of the state's holiday tree. Those decorations are always bundled up after the new year and donated to a local children's hospital.

Washington employers have donated a total of $438,000 to the Holiday Kids' Tree project over the last three decades. Just before the annual tree-lighting ceremony, we give bags of toys and checks to representatives from rural fire districts who distribute the food and toys to families in need. This year we were able to spread holiday cheer to families across the state, from Camano Island to Chelan and Walla Walla.

And speaking of trees, your state Capitol this year was filled with the greenery of a 34-foot noble fir, donated by Weyerhaeuser from its Vail Tree Farm near Rainier.

The tree was harvested from a small area that is being cleared to make room for a series of wind turbines at the new Skookumchuck Wind Farm. This 38-turbine project, a partnership between Puget Sound Energy, Weyerhaeuser, TransAlta and RES, will generate 137 megawatts of power -- enough to power 48,000 homes. That will be a gift for generations to come...

Read the full guest column in The (Centralia) Chronicle