OT Exemption is changing in WA State

Under proposed changes, employers will have to pay overtime to some employees who were previously considered exempt or raise their salaries to continue their exempt status. How will the rules work if the changes are adopted? Minimum required salary and specific job duties tests will determine whether an employee is considered “white collar” and therefore exempt from overtime under the state’s Minimum Wage Act. Salaried Executive, Administrative, Professional and Outside Salespeople in all industries in Washington State are affected by the proposed changes. Beginning in July 2020, if changes are made as proposed, the minimum required salary for overtime exemption will increase incrementally for most salaried Executive, Administrative, Professional and Outside Salespeople until it reaches 2.5 times the minimum wage for both small and large employers in 2026. Computer Professionals earning an hourly wage will remain overtime eligible below higher thresholds starting at $27.63 per hour for small employers in 2020 and rising incrementally for both small and large employers until 2022 when minimum required salary will be 3.5 times the minimum wage to be considered exempt from overtime in Washington, regardless of the size of their employer. Proposed changes are subject to a public comment period ending September 6, 2019. View the executive summary with your subscription to SoundCPA Insights for Business to find out more about the proposed changes, including how our state will define whether salaried employees are overtime exempt, whether your organization will be considered small or large under the new rules, and charts of the proposed implementation schedules of minimum required salary for overtime exemption.