New Overtime Rules


2020's New Overtime Rules

The Washington State Department of Labor & Industries announced new rules Wednesday, December 11th2019 requiring employers to pay overtime to some salaried employees who would otherwise be exempt from state wage and hour laws.

The rules update standards last updated in the 1970s that required overtime pay for salaried employees making no more than about $13,000 a year. The new threshold will start at just over $35,000 a year and increase to an estimated $83,356 a year by 2028, when the new rules will be fully phased in. You can find the timeline for implementation of thresholds here.

The change does not require employers to give their salaried employees raises. Employers can still set salaries below the threshold — but they will have to limit those employees to 40 hours per week or pay them overtime if they exceed 40 hours in a given week.

Redefining ‘exempt’

L&I’s new rules also update job duties criteria used to determine whether an employee can be considered exempt, bringing the language and standards more in line with those of federal rules.

Some salaried employees can’t be exempted from wage and hour laws even if they meet the salary threshold — the exemption applies for executive, administrative, IT, outside sales and professional staff, which typically means white-collar workers in managerial roles. Below are the Department of Labor’s definitions for each exemption.

Executive Exemption

To qualify for the executive employee exemption, all of the following tests must be met:

· The employee must be compensated on a salary basis (as defined in the regulations) at a rate not less than $684* per week;

· The employee’s primary duty must be managing the enterprise, or managing a customarily recognized department or subdivision of the enterprise;

· The employee must customarily and regularly direct the work of at least two or more other full-time employees or their equivalent; and

  • The employee must have the authority to hire or fire other employees, or the employee’s suggestions and recommendations as to the hiring, firing, advancement, promotion or any other change of status of other employees must be given particular weight.

Administrative Exemption

To qualify for the administrative employee exemption, all of the following tests must be met:

· The employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $684* per week;

· The employee’s primary duty must be the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers; and

  • The employee’s primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.

Computer Employee Exemption

To qualify for the computer employee exemption, the following tests must be met:

· The employee must be compensated either on a salary or fee basis at a rate not less than $684* per week or, if compensated on an hourly basis, at a rate not less than $27.63 an hour;

· The employee must be employed as a computer systems analyst, computer programmer, software engineer or other similarly skilled worker in the computer field performing the duties described below;

  • The employee’s primary duty must consist of:

  • The application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software or system functional specifications;

  • The design, development, documentation, analysis, creation, testing or modification of computer systems or programs, including prototypes, based on and related to user or system design specifications;

  • The design, documentation, testing, creation or modification of computer programs related to machine operating systems; or

  • A combination of the aforementioned duties, the performance of which requires the same level of skills.

The computer employee exemption does not include employees engaged in the manufacture or repair of computer hardware and related equipment. Employees whose work is highly dependent upon, or facilitated by, the use of computers and computer software programs (e.g., engineers, drafters and others skilled in computer-aided design software), but who are not primarily engaged in computer systems analysis and programming or other similarly skilled computer-related occupations identified in the primary duties test described above, are also not exempt under the computer employee exemption.

Outside Sales Exemption

To qualify for the outside sales employee exemption, all of the following tests must be met:

· The employee’s primary duty must be making sales (as defined in the FLSA), or obtaining orders or contracts for services or for the use of facilities for which a consideration will be paid by the client or customer; and

  • The employee must be customarily and regularly engaged away from the employer’s place or places of business.

The salary requirements of the regulation do not apply to the outside sales exemption.

Learned Professional Exemption

To qualify for the learned professional employee exemption, all of the following tests must be met:

· The employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $684* per week;

· The employee’s primary duty must be the performance of work requiring advanced knowledge, defined as work which is predominantly intellectual in character and which includes work requiring the consistent exercise of discretion and judgment;

  • The advanced knowledge must be in a field of science or learning; and

The advanced knowledge must be customarily acquired by a prolonged course of specialized intellectual instruction.

Creative Professional Exemption

To qualify for the creative professional employee exemption, all of the following tests must be met:

· The employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $684* per week; and

  • The employee’s primary duty must be the performance of work requiring invention, imagination, originality or talent in a recognized field of artistic or creative endeavor.


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