Op-Ed: State’s proposed overtime rule “risks harming the employees it’s intended to help.”

The Department of Labor and Industries proposed major change to the state’s overtime pay regulations that will have sweeping and negative consequences for employers and workers. That’s the point made by Association of Washington Business president Kris Johnson in an op-ed in the Wenatchee Valley Business World.

Thousands of professional salaried employees in Washington state could be converted into hourly workers if a new proposal from the state Department of Labor and Industries goes into effect.

For individual workers, the change may or may not result in a pay cut. In some cases, employees might end up making about the same amount or even more money once overtime pay is added to their base pay.

But there’s no guarantee employers could afford to pay overtime, especially small businesses. And the rule change could trigger a number of unintended consequences, including a loss of flexible schedules, fewer opportunities for advancement and — for nonprofits in particular — a major impact to the bottom line that could force a reduction in service.

We wrote about the proposal early last month. L&I says the proposal will “significantly increase the minimum amount employees must earn before they can be exempt from receiving overtime pay.” The Washington Research Council summarized,

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.

Johnson writes in the op-ed,

By all accounts, Washington’s current salary threshold is outdated and needs updating. In fact, it’s so outdated that Washington is currently governed by the federal overtime threshold, which is also in the process of being updated.

But the new rule laid out by L&I officials is an astonishing increase over the current rule and will likely catch many small businesses and nonprofits by surprise.

Public hearings are scheduled this summer. Here’s the list we pulled down from the L&I website this morning.

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.

People can also comment by email to the Overtime Rule Program or by mail to the Employment Standards Program, P.O. Box 44510, Olympia, WA 98504-4510. Comments may be submitted by fax: 360-902-5300.

The department says rule-making may take up to six months.