Second round of official comments to L&I on overtime scoping

Working Washington submitted the following comments to the Washington State Department of Labor & Industries as part of their official rulemaking process.

May 31, 2018

Re: Executive, Administrative, Professional (“EAP”) Overtime Rule Feedback (Second Round)

Dear Director Sacks and Deputy Director Smith,

One behalf of our 100,000 members and supporters across the state, thank you for providing robust opportunities for engagement throughout the rulemaking process to update overtime protections. Across the board, our members strongly support expanding access to overtime pay and are happy to hear that the state is considering moving in this direction. Below we provide you a summary of what we have heard from our members and supporters working in food service, retail, offices, and other jobs:

  • The current national standard is wildly inadequate for Washington state workers, and we cannot wait for further federal action. Current federal rules allow employers to exempt employees from overtime pay when they earn as little as $455/week. This works out to less than the current statewide minimum wage for a full-­time worker — which means that there is effectively no overtime threshold in our state. There is little reason to expect that any updated federal rule would be able to adequately address the needs of workers in Washington state.

  • Employers take advantage of the functionally non­existent overtime threshold by classifying workers as salaried when they want to avoid a risk of paying overtime. We've heard from restaurant workers, front desk managers, office workers, retail managers, and others that the day-to-­day reality they experience is that anyone who might get overtime pay is instead classified as salaried so that their employers can avoid the risk of paying overtime. While it may theoretically be possible to challenge some of these classifications under the duties test on a case­-by-­case basis, a higher threshold in line with the realities of our state's wage rates would provide substantially more clarity to both workers and their employers.

  • In the real world of work, employers indicate a workers' EAP status through their pay rate, not through the supposed "prestige" of being paid the same salary every pay period. An employer cannot credibly claim a worker is a "bona fide" Executive, Administrative, or Professional employee unless they are paid more than the average weekly wage or a multiple of the applicable local minimum wage. While any such change would be a significant increase from the current sub­-minimum­ wage standard, our economy has seen substantially higher thresholds, including the inflation­-adjusted overtime threshold peak of $1,263/week.

  • The issues employer groups raise as negative consequences of expanded overtime rights would actually have a positive impact. Many employer groups have stated that expanding overtime rights will lead to salaried workers seeing reduced hours or higher pay. While employer groups may see these as negatives, both of these "consequences" would be benefits to workers, their families, their communities, and the economy. The benefits of reduced work hours include lower injury rates, higher productivity, and more time to contribute to their families and communities. Further, moving income from distant corporate headquarters to local paychecks boosts local economic demand, and more free time means more opportunities to contribute to the economy as well.

  • Raising the threshold statewide protects workers statewide and eliminates any potential "race to the bottom" on labor standards that could otherwise cause businesses and nonprofits to bid against each other for contracts, a competition which nobody wins.

Expanding access to overtime is much needed, badly overdue, and wildly popular with workers across the state. We thank you for taking the concerns of workers into account as you consider this important issue, and we look forward to reaching out to our members to engage the process as rulemaking continues.