Washington employers, remember to review exempt salaries for 2021
In late 2019, the Washington Department of Labor & Industries (L&I) outlined new rules for exempt employees, including base salaries. The salary threshold for exempt employees is now a multiplier of the state minimum wage. Each September, L&I sets the state minimum wage for the next year based on US Bureau of Labor Statistics. As a result, the salary threshold for exempt employees will also change each January 1st as well. By 2028, the salary level will be 2.5 times the state minimum wage, but the increase is phased in over the next seven years with a more gradual increase for employers with 50 or fewer Washington employees.
Effective January 1, 2021, the new state minimum wage will be $13.69 per hour. For 2021, the salary threshold for exempt employees will be 1.5 times the state minimum wage for employers with 50 or fewer employees ($821.40/week or $42,712.80/year) and 1.75 times the minimum wage for employers with 51 or more employees ($958.30/week or $49,831.60/year). These salary levels now exceed the salary level under federal exemptions in the FLSA. Of course, employees must also still meet the “duties” test as well to be exempt.
For those interested, the exempt salary rule can be found in WAC 296-128-545. In addition, L&I is offering free training sessions on exempt employees. If you have questions about whether your employees are correctly classified as exempt, please give me a call at 503-595-2134.