Washington Planning to Increase Exempt Status Salary and Revise Other White Collar Exemptions

By Kalia J. Walker - Bullard Law

February 7, 2019

Many may recall that in 2016, the Obama administration’s Department of Labor issued new rules proposing a significant increase in the minimum salary required to qualify for a white-collar exemption. While President Trump’s election halted these changes, some Washington residents may see an increase in their base salaries after all.

Currently, the annual salary for an exempt employee is $23,660 under federal law. The Washington State Department of Labor and Industries (L&I) intends to propose a new rule that would raise the salary threshold to between 2 and 2.5 times the state minimum wage for a 40 hour work week. Because Washington’s minimum wage will increase to $13.50 in 2020, the new salary threshold would be between $56,160 and $70,200 annually. The L&I proposal is slated to take effect on January 1, 2020.

L&I also intends to update Washington’s white collar exemptions for employees working in an executive, administrative, or professional capacity, or in the capacity of an outside salesperson. The agency seeks to align the Washington state and federal duties tests, but it is unclear how the recent public commenting period will impact the final rule.

In December 2018, L&I issued its second pre-draft version of the proposed rules and public commenting closed at the end of the year. The next step in the rulemaking process is a Cost-Benefit Analysis/Small Business Impact Statement, with public hearings and the formal proposed rule to follow sometime in 2019. Bullard Law will continue to track rulemaking developments and attorneys are available to answer any questions about the potential business impacts of the proposed rule.