ACTION ALERT: Significant change to labor law under review

November 26, 2018

Do you have salaried staff making under $70,000 per year?  The state is proposing a change that affects how you do business. 

Washington State’s Department of Labor and Industries released a new draft proposal that could make any employee earning under $70,200 per year entitled to overtime pay. Read on to learn more. Additionally, please make sure to share this with your nonprofit’s finance and budgeting staff.

According to the Department’s latest pre-draft overtime pay rules, Washington State’s overtime pay exemption threshold could be set at 2X or 2.5X the state minimum wage beginning January 1, 2020. This effectively means the salary exemption threshold for overtime pay will be either $56,160 or $70,200 per year – which is significantly higher than the proposal issued by the Obama Administration in 2016.

Multiplier of the State Minimum Wage Beginning January 1, 2020 Per Week Salary (Employees earning less that this receive overtime pay) Per Year Salary (Employees earning less that this receive overtime pay)
2X $1,080 $56,160
2.5X $1,350 $70,200

It’s no secret that this is a difficult pay threshold for most nonprofits to accommodate.  The Department of Labor & Industries needs to hear from nonprofits about how this affects us.  You can submit general comments, or provide a more detailed analysis.  Either way, please weigh in.

We urge your nonprofit to take these actions:

  1. Analyze what this threshold means for your ability to deliver services. These questions are particularly important considerations:
  • How would the increased personnel cost impact your ability to deliver services?
  • Will you have to reduce services or cut certain services entirely in order to comply with the increased labor costs?
  • What changes will you need to make to your staffing plans?
  • Where will you find the extra money to cover the increased personnel costs?
  1. Tell your story to the Department before its December 14, 2018 commenting deadline. Include specifics about how the changes would impact your organization.  The full proposal and all commenting information are available here. Be sure to look at the cover page for the proposal, since it has additional questions for employers to answer. All you will need to do to comment is type your analysis and comments in a word document and upload it to the engagement site.
  2. Complete this brief survey from Washington Nonprofits so that we can have aggregate data available to inform our comments.
  3. Share your analysis with your Washington State legislators and your public and private funders so that they are aware of how this potential rule change will impact your organization.
  4. Post these messages on social media to spread the word:

For Twitter:

. @LNIWa is proposing a major expansion of overtime pay. Expanding #nonprofitovertime will mean changes for how we serve the community. Join us in commenting on this proposal and RT us to spread the word about this change. #WANonprofits

For Facebook:

@LaborandIndustries is proposing to expand overtime pay to employees in our state making under $56,000-70,000 per year. Expanding #nonprofitovertime will mean changes for how we serve the community. Visit @WANonprofits blog to learn more #WANonprofits

You can also comment in-person on this proposal this week at the upcoming feedback sessions in Seattle, Yakima, and Vancouver. The event information is:

November 27, Seattle
10 a.m. – Overview
10:30 a.m. – 12:30 p.m. – Feedback Session
The Swedish Club, Stockholm Room
1920 Dexter Avenue N.
Seattle, WA 98109
November 28, Yakima
10 a.m. – Overview
10:30 a.m. – 12:30 p.m. – Feedback Session
Hilton Garden Inn, Cascade Room
401 E. Yakima Avenue
Yakima, WA 98901
November 29, Vancouver
10 a.m. – Overview
10:30 a.m. – 12:30 p.m. – Feedback Session
L&I Vancouver Service Office
312 SE Stonemill Drive, Suite 120
Vancouver, WA 98684

If one of the sessions is in your area, please try to have your organization represented so that you can weigh in on the policy proposal. Washington Nonprofits will be testifying at the upcoming hearings and submitting comments on your behalf.  We plan to make the following points:

  • Nonprofit professional staff members should be fairly paid, and we want to see their compensation increase. However, in considering implementation of a new rule, state officials need to consider how nonprofits can raise revenue to meet increased labor costs.  This should include increasing reimbursement rates for state contracts and phasing in the increase over time.
  • State officials need to consider the realities of nonprofit employment. The thresholds proposed above exceed the compensation of many executive directors at small nonprofits, especially those outside the Seattle metropolitan area.
  • Some nonprofits employ part-time professional staff. A provision to pro-rate the salary threshold for part-time workers would be helpful to some nonprofits.

Please contact us with any questions or to let us know if you will be attending and testifying.

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