Employers in Washington State need to fully understand the requirements regarding Washington overtime laws and take action in order to avoid legal and financial penalties.
Under Washington Labor Law, employers must adhere to regulations regarding overtime under the Fair Labor Standards Act (FLSA) and Washington Minimum Wage.
In order to maintain compliance with Washington State Overtime Laws, workers must receive overtime compensation for all hours worked over 40 in a workweek. Overtime pay is not required for hours worked over eight in a single day, however, with the exception of (certain exceptions for public work projects).
Employers may define a workweek as any seven-consecutive-day cycle. The cycle must begin and end on the same day and time every week. If an employer does not define a workweek, then the workweek should defaults to a typical calendar week of Sunday through Saturday.
Like federal overtime law, employers in Washington must generally compensate employees at least 1.5 times the employee’s regular hourly rate for all overtime hours worked.
Employers may be required to pay employees greater than 1.5 times their regular hourly rate if certain collective bargaining agreements are established. Double-time pay is generally not required, with the exception of certain public works projects.
Below is an example of a standard overtime rate calculation in Washington State.
Washington Overtime Calculation Example:
40 Regular Hours Worked
X $20.00 Per Hour (Regular Pay Rate)
= $800.00 Total Regular Pay
$20.00 Per Hour (Regular Pay Rate)
+ 1 ½ Overtime Premium ($10.00 Per Hour)
= $30.00 Per Hour (Overtime Pay Rate)
10 Overtime Hours Worked
X $30.00 Per Hour (Overtime Pay Rate)
= $300.00 Total Overtime Pay
$800.00 Regular Pay
+ $300.00 Overtime Pay
= $1,100.00 Total Pay
An employee’s regular rate of pay or pay rate is their normal hourly wage. If an employee’s pay rate differs at times, then the average pay rate should be used as the regular rate of pay.
To determine an employee’s regular rate of pay add together weekly compensation (not including overtime) and divide by the total number of hours an employee worked during the week.
Washington Overtime rules apply to all employers. While the rules may apply to all employers, not all employees are eligible for overtime pay in Washington State.
Employers may mandate overtime work, requiring employees to work overtime with certain exceptions for the healthcare industry.
A common misconception is that salaried employees are exempt from overtime requirements. However, only those employees who meet a specific salary level test and the definition of either an executive, administrative, or professional employee are exempt from overtime.
On April 23, 2024, the U.S. Department of Labor announced a final rule regarding new exempt salary thresholds for the standard salary level, and the highly compensated employee total annual compensation threshold.
To learn more about the FLSA, click to access the FLSA Guide here. And for more help on classifying employees under FLSA guidelines, click through to see this article.
Washington salary thresholds are actually higher than the new exempt salary thresholds for FLSA. In Washington, to be considered except from overtime, an employee must make at least the following:
Salary Minimums to Be Exempt from Overtime |
||
Effective Date | Minimum Wage Multiplier | Standard Salary Level |
January 1st, 2024 | 2x | $1,302.40 per week ($67,724.80 per year) |
January 1st, 2025 | 2x | *$1,337.60 per week ($69.555.20 per year) |
January 1st, 2026 | 2.25x | *$1,538.10 per week ($79,981.20 per year) |
January 1st, 2027 | 2.25x | *$1,568.70 per week ($81,572.40 per year) |
January 1st, 2028 | 2.5x | *$1,780.00 per week ($92,560.00 per year) |
*Based on changes forecasted in the Consumer Price Index (CPI) and will be subject to further updates if / when the CPI differs from projections.
Salary Minimums to Be Exempt from Overtime |
||
Effective Date | Minimum Wage Multiplier | Standard Salary Level |
January 1st, 2024 | 2x | $1,302.40 per week ($67,724.80 per year) |
January 1st, 2025 | 2x | *$1,504.80 per week ($78,249.60 per year) |
January 1st, 2026 | 2.25x | *$1,538.10 per week ($79,981.20 per year) |
January 1st, 2027 | 2.25x | *$1,743.00 per week ($90,636.00 per year) |
January 1st, 2028 | 2.5x | *$1,780.00 per week ($92,560.00 per year) |
*Based on changes forecasted in the Consumer Price Index (CPI) and will be subject to further updates if / when the CPI differs from projections.
There are three definitions of employees that are exempt from Washington State Overtime Requirements as defined by the Washington State Department of Labor & Industries.
In order to qualify for an executive exemption, an employee must pass the Executive Job Duties Test. The employee must:
In order to qualify for an administrative exemption, an employee must pass the Administrative Job Duties Test. The employee must:
In order to qualify for a professional exemption, an employee must pass the Salary Level Test as well as:
Or
If an employee meets the salary level test and any of the above three definitions, the employee is exempt from overtime requirements.
In 2021 Washington State expanded its protections for overtime in the agriculture industry with the passage of ESSB 5172.
While prior to the new law, dairy workers were entitled to standard overtime requirements, now all agricultural workers are entitled to overtime requirements under Washington State Agricultural Overtime Law.
The state has a “phase-in period” for the new law, which will reduce the hours worked requirement each year. Below is a table overview of the phase-in period.
Date of Update |
Hours Worked Threshold |
Jan. 1st, 2022 |
55 hours during a single workweek |
Jan. 1st, 2023 |
48 hours during a single workweek |
Jan. 1st, 2024 |
40 hours during a single workweek |
Alternatives to overtime exist for public employers only, employees are eligible to receive time off instead of overtime compensation. This is known as “comp” or “exchange” time.
At the request of the employee, an employee may receive 1.5 hours of paid time off for each hour of overtime that was worked.
To learn more about processing payroll in Washington State or maintaining compliance with Washington State overtime pay and requirements, contact a Washington State Payroll Company. By leveraging experts for payroll outsourcing, or a modern paperless payroll solution, companies can avoid non-compliance fines and potential hefty legal penalties.
For help finding a provider, contact Employer Pass today.