Washington State Labor Laws on Exempt Employee Salaries
Federal labor laws require most employers to pay overtime at the rate of 1.5 times the employee’s normal rate for all hours the employee works in excess of 40 hours during a seven-day period. An employment contract providing an alternative arrangement for overtime pay may take precedence, such as a collective bargaining agreement. The federal law allows employers to exempt certain salaried occupations from the overtime provision. The state of Washington also has labor laws in effect regarding the issue. If state laws do not agree with federal laws, employers should follow the statute that gives the greater protection or benefit to the employee.
Employees who perform manual labor must receive overtime pay for all hours worked over 40 in a workweek, regardless of the level of skill the task requires. Executives, administrators, professionals, computer employees and outside sales personnel must meet specific job duties to qualify as exempt from overtime. Executives must directly manage two or more full-time employees or an equivalent number of part-time employees. The executive must have total or significant control over hiring, promotions and terminations. Administrators must exercise independent judgment in important matters, and their work must relate directly to the management of the business. Professionals must possess either advanced knowledge or talents in a creative or intellectual area and spend most of their time in such pursuits. Computer employees, such as programmers and analysts, may be exempt if their work involves designing, testing, analyzing or documenting computer equipment or software.
Outside sales personnel may be exempt if they spend the majority of their time away from the business to make calls on clients. Under Washington law, outside sales personnel must meet more stringent requirements than federal law mandates. Washington rules state that the salesperson must also have control over the number of hours he works each week, limits the time he can spend performing office tasks unrelated to outside sales to a maximum of 20 percent of his total time and allows him to receive a guaranteed salary, commissions, fees or a combination of payment methods.
Both Washington and federal labor laws require a minimum salary for exempt employees. The federal standard is $455 per week, but the state standard is $250 per week. Since the federal standard is more favorable to employees, employers must apply the federal statute when determining whether employees meet the salary test for exemption. Federal statutes allow computer professionals to receive either a weekly salary of at least $455 or an hourly salary of at least $27.63. White-collar workers earning at least $100,000 annually are exempt under state law. Federal law requires that they also routinely perform one or more functions applicable to professionals, executives or administrators. Since Washington law does not require a duties test for highly compensated employees, it offers the greater benefit to workers, eliminating the need for them to meet a duties test.
Federal laws allow employers to place an employee on an unpaid suspension for infractions of workplace conduct rules. The suspension under federal law may be for as little as one day. Under Washington law, however, suspensions must be for a minimum of a full week unless the infraction was a violation of a significant safety rule, in which case the suspension may be for a shorter period.