INSIGHTS

Overtime & Exemptions.

What you need to know

Many businesses have implemented WA’s 2023 overtime rules that took effect on January 1. It’s crucial to ensure all organizations are fully informed about these regulations to avoid potential fines, back wages, or legal issues due to non-compliance. 

Here is a breakdown of the key points you need to know: 

Defining the Workweek and Workday

  • Employers can establish a workweek as any continuous 7-day period starting on the same day and time each week. If unspecified, the default is Sunday through Saturday. 
  • In Washington state, overtime isn’t typically mandated beyond 8 hours in a day, with some exceptions for public projects.

Eligibility for Overtime

  • Overtime compensation applies to many hourly, piece-rate, commissioned workers, agricultural and dairy field workers, or specific salaried employees in executive, administrative, and professional roles, and those involved in prevailing wage projects. 
  • Some individuals are exempt from overtime, including those who don’t meet the “employee” criteria defined by the Minimum Wage Act and others as specified by the law.

Calculating Overtime Pay

  • Hours exceeding 40 per week must be compensated at a minimum of 1.5 times the regular hourly rate. 
  • The standard hourly rate cannot be lower than the state minimum wage. 
  • The calculation involves various components within the regular hourly rate, salaried rates based on fixed time frames, piece rates, flat rates per work unit, commissions as a percentage of sales or profit, and non-discretionary bonuses linked to contracts or agreements. 
  • Public employees are eligible for time off instead of overtime pay, this is known as “comp time.” This is credited at 1.5 hours off for each overtime hour worked. Private employers cannot implement this.

Agricultural Overtime

  • In 2021, new legislation was enacted to provide overtime protections for all agricultural workers, including those paid by piece rate. 
  • The rollout timeline for overtime eligibility varies. 
  • Dairy workers already receive overtime for hours beyond 40. Non-dairy agricultural workers gradually gain overtime eligibility, starting from January 2022 (for over 55 hours), January 2023 (for over 48 hours), and finally, January 2024 (for over 40 hours).

Overtime Exemptions

  • Overtime exemptions typically include eligibility after 40 hours per week, except for specific cases like salaried professionals and manual laborers. 
  • Additional exemptions encompass casual labor in private homes, specific industry roles under the Interstate Commerce Act, forest protection workers, and public officers.  
  • Most jobs require overtime pay but offer alternative compensation methods with non-standard federal overtime rules.

 

Stay compliant and informed to avoid potential complications arising from these important regulatory changes. For more guidance, reach out to us or visit the WA State Department of Labor and Industries website below: https://lni.wa.gov/workers-rights/wages/overtime/overtime-rules-resources

Cheyanna Strickland

Cheyanna Strickland

CAS Senior

Cheyanna joined Larson Gross in 2021 after graduating from Whatcom Community College with an associate’s degrees in both Accounting and Finance. 

Before joining Larson Gross, she worked for 15 years in social services at various nonprofits in Washington, New Jersey, and California. She is currently serving her second elected term as Treasurer on the executive board for a county-wide campaign. 

Cheyanna moved to Whatcom County in 2016. In her free time, Cheyanna is committed to public service and local community involvement. She also enjoys rock hounding, repurposing antique furniture, and spending time with her family.

Chie Tsutsui-Crenshaw

Chie Tsutsui-Crenshaw

Senior Associate

Chie joined Larson Gross in the fall of 2022 as a senior associate in the Client Accounting Services team.  With a background spanning diverse industries including real estate, manufacturing, health & wellness and more, she brings a unique and valuable expertise to the team. She works remotely from Issaquah and in her free time, she enjoys hiking and traveling with husband where they find the natural beauty of the landscapes and creating cherished memories along the way.

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