Fair Labor Standards Act & Washington Minimum Wage Act

Most employees covered by the Washington Minimum Wage Act (WMWA) must be provided a minimum wage, overtime for working above 40 hours in a seven day workweek, and paid sick leave. WMWA exempts certain kinds of covered employees from its requirements, including bona fide Executive, Administrative, and Professional (EAP) workers.

More information on changes to overtime rules is located on the Washington State Department of Labor & Industries (L&I) website.

Unlike the federal law, WMWA does not include a “highly compensated employees” (HCE) standard.  The total annual compensation requirement for highly compensated employees under federal law, can be found on the U.S. Department of Labor website.

The minimum salary threshold for overtime exempt workers will increase incrementally until 2028 when the change will be fully implementated at 2.5 times the state minimum wage. After that, annual updates will be based on adjustments to the state minimum wage due to inflation. The phased in salary thresholds can be found at WAC 296-128-545.

Note: in limited circumstances, the salary threshold does not apply to certain professionals (e.g., teachers, doctors, and lawyers) because those professionals are considered exempt under the WMWA based on their duties alone. In addition, there are other specialized rules which apply in higher education settings, as discussed in number 4 below.

The new state rules went into effect July 1, 2020. As noted above, the minimum salary threshold overtime exempt workers will increase incrementally until 2028. After that, annual updates will be based on adjustments to the state minimum wage due to inflation. Each September, L&I determnines the minimum wage for the following year, which becomes effective January 1 of each subsequent year.

Not necessarily.  The salary threshold required to exempt EAP employees from overtime protections under FLSA are different. Earnings thresholds from minimum wage and overtime protections under the FLSA can be found on the U.S DOL website. Under the WMWA, the standard salary threshold is higher and more favorable to the worker.  Where there are differences between the state and federal overtime rules, the employer must follow the rule that is most favorable to the worker.  Since state law is more favorable, employees who are currently exempt under FLSA may now be overtime eligible under state law requiring the employer to provide overtime pay to those employees.

Employees considered exempt from WMWA’s overtime requirements must meet both the threshold salary test and the duties test of a particular position.

It depends. For classified employees and those employees exempt from civil service the salary threshold should be applied in order to exempt the position. For academic employees, consult your assigned AAG about whether the new salary basis threshold applies. This salary threshold would not apply to individuals whose primary duty is teaching, and there are other specialized rules that apply in the higher education settings. L&I Administrative Policy ES.A.9.5; WAC 296-128-530(2)(a); See also for guidance attached DOL Fact Sheet.

In most circumstances, yes. Employees have to meet both the threshold salary test and the duties test to be considered overtime exempt.  It is not enough to meet one test but not the other unless the claimed exemption is one for a professional whose duties alone make them exempt regardless of the salary paid or if other specific rules apply, such as in higher education (see #4 above and #1 Note).

For non-represented positions, WAC 357-28-245 requires general government employers to get OFM approval when changing a position’s overtime eligibility designation from overtime eligible to overtime exempt. For represented positions, refer to the appropriate collective bargaining agreement to ensure required notifications occur when making changes to an employee’s overtime status.

Total Compensation: Premium pay and all the rest of the “wage types” are part of the salary as a whole and should be considered when looking at total compensation.

Look at total compensation. When the compensation is regular and ongoing, total compensation may be used to determine if an employee can be exempted from earning overtime. Compensation that one would expect the employee to receive all time. For example:

• An employee’s workstation is in King County, and they are eligible for the King County premium pay. This compensation would be considered regular and ongoing. (It is expected they will receive all the time)
• An employee’s regularly scheduled work shift is nightshift. Because of this they receive shift differential for those hours worked between 6pm and 6am. This compensation would be considered regular and ongoing. (It is expected they will receive all the time)

Do not include one-off payments, incentives, or commissions when looking at total compensation for determining whether an employee can be exempted from earning overtime. For example:

• An employee’s regular work shift is M-F 8am through 4:30pm. They are occastionally required to work after 6pm. Although they may be eligible for shift differential for those hours worked after 6pm, this additional compensation cannot be used as part of total compensation for determining whether an employee can be exempted from earning overtime. The reason is this additional compensation is not regular and ongoing.

The relevant inquiry is what the standard salary level is to qualify for exemption under state law.

The salary threshold is a set amount and cannot be prorated or adjusted based on hours worked. If the position calls for the employee to work 40 weeks out of the year, then the ability to exempt the position from WMWA would depend on whether or not the employee meets the duties test requirements and the specified weekly minimum salary threshold to qualify as exempt.

If the person’s pay is tied to the amount of time (i.e., the quantity) that they work, they are hourly employees and overtime eligible because they are not being paid on a salary basis pursuant to WMWA rules.  Specifically, under WMWA rules an employee will be considered to be paid on a “salary basis” if the employee regularly receives for each pay period of one week or longer (but not to exceed one month) a pre-determined monetary amount (the salary) consisting of all or part of their compensation, which amount will not be less than what is required to be paid pursuant to WAC 298-128-510 through 295-128-530. The salary shall not be subject to deduction because of various in quantity or quality of the work performed, subject to exceptions in WAC 296-128-532(3).  WAC 296-128-532.

Note: This is the same standard used under FLSA, 29 C.F.R. § 541.602(a).

It does not matter if the employee is working full-time or part-time. The salary threshold is a set amount. As such, absent the limited exceptions for higher education, if a part-time employee doesn’t meet the specified weekly minimum salary threshold and the duties test requirements, they are eligible for overtime.

Split-level pay ranges are salary ranges in which the new WMWA salary threshold falls somewhere in the current salary range on the general service salary schedules. For impacted positions, you should review current positions based on the salary threshold and duties test and prepare to make adjustments to impacted employees’ overtime eligibility where necessary. The split-level pay range will depend on the salary schedule for a particular position.

Employees could switch from overtime eligible to overtime exempt once their salary exceeds the new salary threshold, provided employee’s duties also meet the WMWA exemption criteria.  It is up to the agency to apply the new salary basis test so that employees would switch from overtime eligible to overtime exempt mid-pay range.

Agencies should be reviewing their current positions to ensure that they are properly classified. Agencies are responsible for determining whether a worker’s job duties and salary meet the requirement to be overtime exempt under WMWA. You are highly encouraged to take a close look not only at the salary, but at whether the position duties meet the job duties test under L&I’s rules.

Agencies or higher education institutions should contact their assigned Labor and Personnel or Education Division AAG.

This is a very fact specific question that should be asked of your assigned Labor and Personnel or Education Division AAG.  The WMWA rules state that an employee who otherwise meets the salary basis requirements shall not be disqualified from the exemption if that public employee is paid according to a pay system that is established by statute, ordinance, regulation or by a policy or practice established according to the principles of public accountability under which the employee accrues personal leave (annual, vacation, etc.) and sick leave and which requires the public agency employee’s pay to be reduced or such employee to be placed on leave without pay for absences for personal reasons or because of illness or injury of less than one work-day when accrued leave is not used by a public employee. WAC 296-128-533(1)(a). See also federal law for guidance, 29 C.F.R. § 541.710(a).

The salary threshold test should be applied to the pre-determined salary set by the salary schedule without regard to potential furloughs that may arise.  If in the future the employer requires a furlough of less than one week, it will destroy the salary basis for that workweek if the employee performs work. See WAC 296-128-533(1)(c). For that week only, the employee would be entitled to protections under the Minimum Wage Act, which would include payment for all time worked over 40. You will want to change them to overtime eligible only for the week when the furlough occurs. Otherwise, they remain overtime exempt.

L&I has determined calculating minimum wage for determining overtime is by workweek. A workweek is defined as any 7 consecutive days beginning on the same day and time every week. While the state pays on a semi-monthly basis, calculating the salary by the number of hours in any given pay period is an inaccurate representation of an employee’s compensation. Semi-monthly pay cycles result in pay periods of varying hours, ranging as much as 80-96 hours. This variation would result in varying per hour rates in spite of the fact that salaried non-exempt employees are not paid hourly without regard to the actual annualized salary. The State salary schedules meet or exceeds the state’s minimum wage requirements.

Under both federal and state law, teachers are exempt if their primary duty is teaching, tutoring, instructing or lecturing to impart knowledge and that person also performs these duties at an educational establishment.  Coaches are exempt under the professional exemption, when their primary duty is teaching student athletes how to perform their sport.  L&I Administrative Policy ES.A.9.5; WAC 296-128-530(2)(a).

If the teaching activities are covered by the professional exemption then the employee is also exempt from paid sick leave coverage.  RCW 49.46.010(3)(c).

An employee whose primary duty is in an overtime eligible position will carry that eligibility over to the nonexempt assignment, while an employee whose primary duty is in an overtime exempt position can perform work that would be overtime eligible without losing the exemption. For employees with multiple appointment types with the same employer, it is sometimes unclear which position is their primary duty for purposes of determining exempt or nonexempt status. Please contact your assigned AAG for assistance with questions involving the impact of multiple appointment types on an employee’s overtime status.

The answer to this question is fact-specific and requires analysis of the position’s primary duties under the administrative exemption of WMWA. Please contact your assigned AAG for analysis.