L&I proposes changing overtime salary threshold to 2.5 times the minimum wage

By: Emily Makings
1:23 pm
June 5, 2019

The Department of Labor & Industries (L&I) has formally proposed tying the salary threshold that helps determine overtime eligibility for executive, administrative, and professional (EAP) workers and outside salespeople to the minimum wage. (This comes after two previous pre-draft versions were released last year.)

Currently, workers must be paid overtime if they work more than 40 hours a week, but there are some exemptions—including for EAP workers. To be exempt, these workers must perform certain duties and earn more than $455 per week ($23,660 per year). (This is the current federal salary threshold; the current state threshold is $250 per week.)

Under the proposal, the salary threshold would be increased by steps (depending on employer size) until it is 2.5 times the state minimum wage for all employers beginning Jan. 1, 2026. (Under I-1433, the state minimum wage will increase to $13.50 in 2020, after which it will be indexed to inflation.) Beginning July 1, 2020, the threshold would be 1.25 times the minimum wage ($675 per week, or $35,100 per year) for employers with 50 or fewer employees. The threshold would be 1.75 times the minimum wage ($945 per week, or $49,140 per year) for employers with more than 50 employees. (Employer size would be determined by the number of employees based in Washington.)

The table below (from L&I) shows how the threshold would increase. As estimated by L&I, as of Jan. 1, 2026, the salary threshold for all employers would be $1,536 per week, or $79,872 per year. L&I also estimates that the number of employees affected by the change would be 77,000 in 2020 and increase to 252,000 in 2026.

(For computer professionals, the threshold would step up until it is 3.5 times the minimum wage beginning Jan. 1, 2022.)

Comments on the proposal are due by September 6, and L&I expects to adopt the rule “in late 2019.”

Meanwhile, the federal government has also proposed new overtime rules. Under that proposal, the federal salary threshold would be $679 per week.

Categories: Categories , Employment Policy.