Employers may want to consult legal counsel about how this rule may impact them. Departments do not need to take action for the minimum wage increase. Keep in mind that reclassification means more than just . Public input during the rulemaking processL&I updated the overtime rules through a rulemaking process that began in March 2018. Employees aged 14 to 15 years must earn at least $13.38 per hour. The new state minimum wage for 2023 is $15.74 an hour. These workers are typically "white collar" workers who often have more economic security and relative bargaining power than lower-wage workers. Some states have laws and ethical rules regarding solicitation and advertisement practices by attorneys and/or other professionals. Effective January 1, 2023 under the WMWA, the minimum actual gross salary a position can be paid and still remain overtime exempt increased from $1,014.30 per week to $1,259.20 per week ($65,484 per year or $5,457 per month). Justice and Commerce Departments Announce Creation of Disruptive United States Department of Justice (DOJ), Biden Executive Order 14091 Strengthens Equity for Federal Agencies. BY Good News for American Businesses: H1-B Denial Rates Plummet Under USCIS Extends Comment Period for Proposed Fee Increases, OFCCP Rescinds Trump-Era Religious Exemption Rule. Sign up to receive email updateson the overtime employment rule changes and other wage matters. In addition, work volume is dependent on operational needs and work must be performed to meet those needs. For employees working in Seattle and the City of SeaTac, the local minimum wage rate applies as long as it remains higher than the state minimum. Information regarding minimum wage can be found on theHRS website. These laws require the university to provide overtime pay to employees for any work hours exceeding 40 hours in a given workweek unless that employee is exempt from these laws. The 2023 threshold of $65,484 will be approximately 24.1% higher than the 2022 threshold. State Developments, Wage and Hour, Washington. If an employee is covered by both federal and state law but doesn't meet both sets of tests, employers should consult with counsel to determine how they should classify the employee in that particular situation. The content and links on www.NatLawReview.comare intended for general information purposes only. Their current minimum wage is $17.54 per hour. These changes affect executive, administrative, and professional (EAP) workers as well as outside salespeople and computer professionals across all industries in Washington. Waters of the United States and Winston Churchill. Given the steep increase in the minimum wage, the states salary requirements for exempt employees are also increasing significantly. Vice President for Human ResourcesSU People and Culture Strategies, By using our website, you agree to our cookie policy, Skip to Apply, Request Info, Jobs, Contact links, Institute for Catholic Thought and Culture, Center for Ecumenical and Interreligious Engagement, Washington State 2023 Salary Threshold Change. In 2023, large employers must pay exempt employees at least $1,259.20 per week ($65,478.40 per year) to meet the states minimum salary requirement to be exempt from overtime requirements. See L&Is Administrative Policy ES.A.9.6 (Exemption from Minimum Wage Act Requirements for Computer Professional Employees). US Executive Branch Update March 2, 2023. (s#%=]XzqEh$P=%D&H.&Ab}d!,x\pK+!r dev"! University of Washington School of Law, J.D. Hes full of profound truisms, and this one has always, On January 14, 2023, the Washington Department of Labor & Industries (L&I)s COVID-19 (coronavirus) emergency rules that had been in place for temporary worker housing (TWH) in the, Evaluate classifications for employees paid a daily rate Noncompete Agreements: Washington law prohibits noncompete agreements with employees who earn less than the states annual threshold. The changes update minimum salary level and job dutiesUnder the approved changes, the minimum pay a salaried worker must receive to be considered exempt would increase incrementally to 2.5 times the state minimum wage by 2028. The salary threshold under federal law is only $684 per week, so employers in Washington must pay at the higher state level. See our Legal Guide, Noncompetition Agreements, for guidance on additional requirements in Washington. Using the 2023 minimum wage starting January 1, 2023, L&I calculated . Free Speech Shines Bright, Illuminates Patent Owners Right to Allege California Supreme Court to Address Rounding of Employee Time. Some states also bumped their exempt . It will continue to increase annually thereafter based on inflation. This rate is subject to mandatory annual adjustments which are usually announced in October or early November. Large employers (fifty-one or more employees) must pay exempt employees at least two times the minimum wage to meet the minimum salary requirements. 2023, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved. The state of Washington minimum wage will increase from to$14.49 to $15.74 per hour on January 1, 2023. Each September, L&I uses the Consumer Price Index for Urban Wage Earners and Clerical Workers (referred to as CPI-W) from the U.S. Bureau of Labor Statistics to determine the minimum wage for the following year. 1/1/2023 . The annually increasing salary thresholds specifically apply to the many university positions within the Executive, Administrative, and Professional exemptions. This content provides practical information concerning the subject matter and is provided with the understanding that ADP is not rendering legal advice or other professional services. Managers will need to assess staffing patterns and design the work to balance resources and overtime. Visas for F and M Students Can Now Be Issued 365 Days Ahead of Program Start Date. In Minnesota, if an employer's gross revenue was $500,000 or more, then the minimum wage increased to $10.59 while an employer's whose gross revenue was less than $500,000 only needs to . Given the steep increase in the minimum wage, the states salary requirements for exempt employees are also increasing significantly. Use tab to navigate through the menu items. Employers have several options to comply with the new federal and state salary thresholds: Reclassify exempt positions as hourly, non-exempt positions. Our faculty colleagues (and some staff members) whose primary duty is teaching, coaching, instructing, or lecturing are fully exempt from these laws regardless of their salary amount. For the professional exemption, employees must satisfy certain duties tests, but there is no minimum salary requirement under state law. Our employment attorneys and workplace safety experts will take a look at your question and possibly select it for our next post. Its Here The New National Cybersecurity Strategy. Following a nationwide trend (including California, Delaware, Illinois, Pennsylvania, and other states), Wisconsin Governor Tony Evers announced he will be issuing a safer-at-home order in response to the COVID-19 outbreak. This same threshold applies to part-time employees; it is not pro-rated for employees who are less than full-time. Cities are allowed to set higher minimum wages. The computer professionals exemption was added in 1997, but these are the first major changes to the states rules since 1976. Who are these workers?A combination of a predetermined fixed salary, the salary meeting a minimum threshold, and specific job duties determines whether a worker meets the definition of an executive, administrative, or professional worker, outside salesperson or computer professional contained in state rules. L&I has created an online overtime resource center to assist employers in understanding these salary requirements, including charts, fact sheets, workshops, and webinars. As a result of a new state minimum wage, the salary thresholds used to determine which workers are exempt from overtime under state law also increased effective January 1, 2023: Note: Employers of any size may pay exempt computer professionals by the hour, provided they pay at least 3.5 times the minimum wage ($55.09 per hour in 2023). Beginning January 1, 2023, these employees must earn at least: In Colorado, employees must meet certain salary and duties tests to qualify for exemption. The governor-appointed Ombudsman would be an advocate for injured workers by accepting, investigating, and attempting to resolve complaints related to workers compensation. As a result, employers must pay a salary of at least $1,240 per week beginning January 1, 2023 to qualify for the exemption. If you have questions about which rates apply to your employees or whether they are exempt, contact your Vigilant Law Group employment attorney. In a recent decision from the U.S. Supreme Court, an employee who was paid on a daily rate basis and earned more than $200,000 annually, The U.S. Department of Labor (DOL) recently released a Field Assistance Bulletin No. This increase represents an increase of $1.25 per hour, or an 8.66 percent increase year over year. L&I determines the amount based upon a multiplier of the Washington state minimum wage and inflation, causing the final amount to potentially differ from published projected amounts. In 2019, at the direction of Governor Inslee, the Washington State Department of Labor & Industries (L&I) published a new schedule of minimum salary thresholds through January 1, 2028. So You're Green Prove It or Be Prosecuted: ACCC Sweep Finds 57 California Court of Appeal Addresses When Violations are Willful or Whats new in Belgium on the employment front? Effective January 1, 2023, student and non-student hourly employeeswith a pay rate below minimum wage will be automatically increased to $15.74 per hour. 2023 Exempt Status Salary Threshold by City and State . Starting Monday, December 26, 2022, they will need to track the hours that they work following the established time tracking procedure in their department. The increases mandated by voter-approved Initiative 1433 stopped in 2020. New salary threshold implementation schedule, Threshold phase-in schedule for computer professionals paid hourly. In many cases, the state criteria are harder to meet than the federal criteria. Employers Beware: Non-Disparagement and Confidentiality Covenants in Consultation Paper On Review of Corporate Governance Norms For A High Californias War On The Fast-Food Industry Continues. The state previously used two job duties tests that have been reduced to one test with language that now more closely aligns with the federal job duties tests. The following is a comprehensive list of the exempt status salary threshold by state. Noncompete Agreements: Washington law prohibits noncompete agreements with employees who earn less than the state's annual threshold. g Seattles minimum wage rates apply to all nonexempt employees for all hours they work within the city limits. The National Law Review is a free to use, no-log in database of legal and business articles. As you know, SU complies with federal, state, and local laws relating to employee wages and hours, including the federal Fair Labor Standards Act (FLSA) and the Washington State Minimum Wage Act (MWA). H-2B Cap for Fiscal Year 2023 Is Met: A Supplemental Cap Increase As COVID-19 Emergency Waivers End, DEA Proposes to Expand Tele- How Employers Need to Prepare for the End of the COVID Public Health USPTO To Transition To Electronically Granted Patents In April 2023, Reductions in Force: Some High-Level Issues To Consider, CMS Streamlines Stark Law Self-Referral Disclosure Protocol (SRDP), The Alice Eligibility Two-Step Dance Continues, FTC is Talking Trash and Zeroing-in on Recyclable Claims, FTC Hosts Forum on Proposed Rule to Ban Noncompete Clauses. If you have any questions regarding this change, please see the FAQ document or discuss them with your departments HR administrator. Federal updated its highly compensated employee salary threshold to $107,432/yr. For the outside sales employee exemption, there is no minimum salary requirement. Exempt computer professionals may be paid based on either the exempt salary threshold ($52,743.60 annually for 2022) or by the hour. For more information on overtime exemptions in Washington, see our Legal Guide, State Laws on the White Collar Exemption from Overtime. Large employers with 51 or more employees must pay exempt employees a weekly salary of at least $1,259.20 ($65,478.40 per year). Small employers with 1-50 employees must pay exempt employees a salary of at least $1,101.80 per week ($57,293.60 per year). Part 1 training plans. The Supreme Court Grants Petition to Decide Constitutionality of CFPB Understanding Your Law Firms Value Proposition, Spike in Migrants Crossing U.S.-Canada Border Raising Concerns, Bill to Amend the Gramm-Leach-Bliley Act Introduced to Congress, Energy & Sustainability Washington Update March 2023. Large employers (fifty-one or more employees) must pay exempt employees at least two times the minimum wage to meet the minimum salary requirements. HRS will assist colleges/areas in evaluating the impact of these changes. Ogletree, Deakins, Nash, Smoak & Stewart, P.C. On September 30, 2022 the Washington State Department of Labor and Industries announced the new state minimum wage effective January 1, 2023: $15.74 per hour. Breaking the Link New Developments on U.S. Employees aged 14 to 15 years old must earn at least $13.38 per hour in 2023. of Business Administration. Expanding Regulatory Reach over Intermediaries That May Constitute How to Value Digital Assets for Donation to Charity. Small employers (with 1-50 employees) will have a more gradual phase-in schedule to give them additional time to comply with the new rules compared to large companies (51 or more employees). She has successfully defended cases before the United States Court of Appeals for the Ninth Circuit and the Washington State Court of Appeals. For these two exemptions, the state generally sets the minimum salary requirement at 75 times the state minimum wage, which differs based on the region of the state. Accordingly, please do not send us any information about any matter that may involve you unless we have agreed that we will be your lawyers and represent your interests and you have received a letter from us to that effect (called an engagement letter). In Washington, employees must satisfy certain salary and duties tests to be classified as exempt from overtime under state law. Under the states exemption for highly technical computer employees, the employee may be paid by salary (at least $961.54 per week in 2023) or by the hour ($31.41 per hour in 2023). For the computer professional employee exemption, the employee may be paid by salary (as long as it is at least $684 per week) or by the hour (as long as it is at least $27.63 per hour). The hearings were held in July and August 2019 in Tumwater, Seattle, Bellingham, Ellensburg, Kennewick, Spokane and Vancouver. With the state salary thresholds for exempt employees now a multiplier of the state minimum wage, one of the thresholds multipliers will rise on Jan. 1, 2023. www.grsm.com is using a security service for protection against online attacks. HR will provide more information in the coming days, including supervisor guidance and direct communications to staff colleagues directly impacted. Due to the monthly base pay model at the UW requiring rounding up to a whole dollar amount, the UWs monthly and annualized thresholds are slightly higher than the states weekly threshold as shown in the table below: L&I Salary Threshold effective Jan 1, 2023. Effective January 1, 2023, civil service employees at these impacted salary ranges and step will be adjusted to minimum wage. In other cases, employers may need to increase salaries for exempt employees. For 2022, the wage for 14 and 15 year olds will be $12.32 per hour. Mar 02, 2023 Colorado. Effective Jan. 1, 2020, the federal minimum salary threshold increased to $684 a week. Effective January 1, 2023, employees must earn $65,478.40 annually ($5,456.55 monthly) to be exempt from overtime, regardless of duties and responsibilities. Y321N-!s%/ 6aG3TbAx1}Net3BIYr[@KdqZ?w*. As a result of the Colorado Overtime & Minimum Pay Standards Order, the minimum salary required to qualify for the executive/supervisor, administrative, and professional exemptions under state law increased to $961.54 per week on January 1, 2023. The following 5 Part Strategy was voted by the UCC Executive Committee to help navigate the implications of the Washington Salary Threshold on our Conference: Radical prayer We ask for your devoted prayers and financial support for our 2022 Tithe to exceed $500,000 above budget. This is true in certain other states as well, some of which will have a new minimum wage in 2023. HERE IT IS: The Czars HUGE Breakdown of the FCC NPRM is NOW Telehealth Update: DEA Issues Long-Awaited Proposed Rule on CFPB Provides Guidance on Auto Finance Data Pilot, Two Maui Men Sentenced for Racially Motivated Attack on White Man, US Executive Branch Update March 3, 2023, EPA Holds Third and Final TSCA Engineering Initiative Webinar. 2023 salary thresholds set for overtime exempt employees, Chapter 296-128 of the Washington Administrative Code. 2023, Ogletree, Deakins, Nash, Smoak & Stewart, P.C. Note: There is also a professional exemption under state law. The minimum salary threshold will increase through January 1, 2028, at which time it is projected to reach $93,288. The 2023 minimum wage rate in Washington State will increase to $15.74 per hour for employees sixteen years of age and older, the Washington State Department of Labor & Industries announced on September 30, 2022. The salary threshold is adjusted for inflation each year by L&I, and will increase from $107,301.04 (the 2022 rate) to $116,593.18 for 2023. Important information for employers is also available via the firms webinar and podcast programs. Dirty Steel-Toe Boots, Episode 16: Investigations and the OSH Acts DOE Issues FOA for Carbon Capture Large-Scale Pilots and Carbon A Forward Look at IRAs Sweeping Impact on the EV Sector [PODCAST]. Ms. Fletcher advises employers on personnel You are responsible for reading, understanding and agreeing to the National Law Review's (NLRs) and the National Law Forum LLC's Terms of Use and Privacy Policy before using the National Law Review website. This means, for example, that a 50% (half-time) employee whose annualized salary is $120,000 would be overtime eligible because their actual, half-time salary would be $60,000, which is less than the new $65,484 threshold. The salary rates may vary depending on the city/county where an employee resides/works in California. Due to the monthly base pay model at the UW requiring a whole dollar amount, the UW's thresholds are slightly higher than the state's thresholds as shown in the table below: Note: In Colorado, an exempt employees salary generally must also be sufficient to satisfy the minimum wage for all hours worked in a workweek. The National Law Review - National Law Forum LLC 3 Grant Square #141 Hinsdale, IL 60521 Telephone (708) 357-3317 ortollfree(877)357-3317. The cities of Seattle and SeaTac also have higher minimum wage requirements that are increasing in 2023. The Washington state overtime threshold for exempt jobs as of January 1, 2023 is set by state rule at 2 times the state minimum wage and will be $1,259.20 per week. Six states increased the minimum salary requirement for overtime exemption on January 1, 2023. The service requires full cookie support in order to view this website. Many states have their own salary and duties tests for determining whether an employee is exempt from overtime under state rules. At least 1.75 times the minimum wage, or $1,101.80 per week ($57,293.60 per year), At least 2.0 times the minimum wage, or $1,259.20 per week ($65,478.40 per year). The Washington state overtime threshold for exempt jobs as of January 1, 2023 is set by state rule at 2 times the state minimum wage and will be $1,259.20 per week. Federal law allows us to use to calculate salary threshold. Unlike teaching professionals, however, positions falling within the Executive, Administrative, or Professional exemptions are subject to a state-required minimum salary to be classified as exempt.. The overtime threshold . The Washington State Labor and Industries (L&I) announced the minimum salary an employee must earn to be exempt from overtime. The Health AI Frontier: New Opportunities for Innovation Across the FTC to Hold Workshop on Recyclable Claims. NLRB Places New Limitations on Confidentiality and Non-Disparagement Settlement Will Benefit Many Aging-Out Children in the Green Card SEC Commissioner Discusses Reform to Regulation D, Massachusetts AG Settles Enforcement Action Against Auto Lender. 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Using the 2023 minimum wage starting January 1, 2023, L&I calculated the salary thresholds for employers with 1-50 employees to be at least 1.75X the state minimum wage, or $1,101.80/week ($57,293 . Salaried exempt employees have to earn at least the state thresholds because they are higher than the federal threshold. Critically, the "nonexempt" classification is not a reflection of the importance of a position. On January 1, 2021, Washington's minimum wage will increase from $13.50 to $13.69. They will be paid for all hours worked, and time and a half (or compensatory time at time and a half) for all hours worked over 40 in a workweek. SeaTac minimum wage: The City of SeaTac also maintains its own minimum wage rate covering certain transportation and hospitality employees working within the city. HR will reclassify those employees as "nonexempt" on January 1, 2023. The exact threshold depends on the employer's size: For employers with 1-50 employees, the threshold salary level will be 1.75 times the state minimum wage. You can read theadopted rule language in Chapter 296-128 of the Washington Administrative Code. Thank you for suggesting a question for our next Q&A post! Check outtheovertime rulemaking documents. National Law Review, Volume XII, Number 277, Public Services, Infrastructure, Transportation. www.grsm.com is using a security service for protection against online attacks. In addition to the change in the minimum salary level, the new rules update the job duties tests. The Emergency Family and Medical Leave Expansion Act (EMFLEA) and the Emergency Paid Sick Leave Act (EPSLA) authorize the DOL to issue regulations to exempt health care providers and emergency responders from eligibility for coverage under the FFCRA. 2023-1 providing guidance on wage and hour topics related to employees who, Accident prevention is a journey, not a destination. The effective date for the changes was July 1, 2020. Beginning January 1, 2022, the Washington State's minimum wage will be $14.49 per hour, increasing from the current minimum wage of $13.69 per hour. Governor Evers stated he would issue the order on Tuesday, March 24, 2020. Federal law establishes a minimum salary of $684 per week for the professional exemption. If other salary changes are needed, departments should process those actions in accordance withuniversity policies. Changes to these rules mean some employers might have to provide overtime, minimum wage, and paid sick leave to some employees who were previously treated as exempt. The U.S. Department of Labor in September 2019 updated the federal overtime rules regarding executive, administrative, and professional workers. White House Reviewing Proposed Regulations on Reinstated Superfund You Dont Need a Machine to Predict What the FTC Might Do About Is It Compensable? White House Requires Removal of TikTok App from FDA Withdraws Proposed Rule on General Principles for Food Standards New FAQs Dramatically Expand Scope of California Labor Contractor Today is the Day Dont Miss the Employer Deadline to Report to OSHA, PTO Seeks Comments on Role of Artificial Intelligence in Inventorship. Federally Recognized Holidays, Employer Considerations for DOLs New AEWR Rule. The minimum salary threshold will increase through January 1, 2028, at which time it is projected to reach $93,288. The National Law Review is not a law firm nor is www.NatLawReview.com intended to be a referral service for attorneys and/or other professionals. Mandatory Arbitration Agreements Remain Valid in California, Antitrust Practitioners Expect Activity With Climate Issues. When state and federal thresholds conflict, businesses must meet the threshold most favorable to employees. Chris Edison. Details are available on the Department of Labor and Industries (L&I) Washington minimum wage webpage. Heres what we know about these rate increases: Statewide minimum wage: The statewide minimum wage rate for nonexempt (overtime-eligible) workers will rise to $15.74 per hour (up from $14.49), effective January 1, 2023. Before classifying and treating any employee as exempt from overtime, employers should confirm that the employee satisfies all applicable tests for overtime exemption under federal and state laws. Effective January 1, 2023, employees must earn $65,478.40 annually ($5,456.55 monthly) to be exempt from overtime, regardless of duties and responsibilities. We cannot become your lawyers or represent you in any way unless (1) we know that doing so would not create a conflict of interest with any of the clients we represent, and (2) satisfactory arrangements have been made with us for representation. Under certain state laws the following statements may be required on this website and we have included them in order to be in full compliance with these rules. The changes are summarized below: To be classified as exempt from overtime under state law (Alaska Statute 23.10.055), bona fide administrative, professional and executive employees must satisfy certain salary and duties tests. 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