Spokane Journal of Business

The Journal’s View: Speak up now to ensure new overtime rules are balanced

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The business community here and throughout rural and Eastern Washington should make its voice heard regarding changes to overtime and salary rules currently proposed by the Washington state Department of Labor and Industries.

While we believe it’s true the rules need to be updated to ensure that salaried employees working long hours aren’t compensated an average hourly rate below what a minimum wage worker would earn, L&I also should take care to ensure regulations are appropriate for all of Washington state.

As proposed, the final rules would phase in increases for salaried employees to reach a minimum level of 2.5 times Washington’s minimum wage in 2026 -- an estimated minimum annual salary of nearly $80,000. Being tied to the minimum wage, the minimum salary levels also would be adjusted annually after 2026.

Simply put, we believe the proposed rules are too aggressive, and we believe L&I should be more conscious of the unintended negative consequences they would bring. When fully implemented, the rules would hurt small businesses, startups, and nonprofits the hardest -- especially those in rural and border communities, which make up a considerable portion of the state.

L&I will hold six public hearings around the state starting this month, with the only Spokane-area hearing scheduled last, on Aug. 7. That meeting will be at the CenterPlace Regional Event Center, in Spokane Valley, with an explanatory discussion of the rules starting at 9 a.m. and the hearing from 10 a.m. to noon.

Employer advocacy groups are calling for a robust turnout among small business owners and nonprofit leaders to either attend public hearings or submit written comments to ensure L&I has a better understanding of how the proposed rules will negatively impact their organizations.

Meanwhile, the U.S. Department of Labor Wage and Hour Division also is developing final overtime and salary rules. As proposed, the federal minimum salary would increase to $35,300 and include a commitment to periodic reviews to update the salary threshold.

The state L&I has indicated that it’s looking to align the state duties test with the federal duties test to ensure that to be considered exempt from overtime, employees must primarily perform executive, administrative, professional, or outside sales duties.

Such an alignment in state and federal definitions is especially important for border communities, such as Spokane, to remain economically competitive and consistent with communities in neighboring states. Employers should press that issue of competitive consistency, because L&I also says on its website that it doesn’t plan to amend its proposed regulations in response to changes in federal overtime laws.

L&I estimates its proposed changes will impact more than 250,000 Washington workers by 2026. Here, many of those salaried workers likely will be converted to hourly status. While that might be appropriate for some, it will limit flexibility for others who currently enjoy the option not to work regular office hours. At the minimum salary level proposed, it also will add an unrealistic hardship on the most vulnerable employers.

Now is the time for employers to express loudly to L&I that the new rules should balance the interests of employees and employers statewide.

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