For a lot of workers, the 40-hour workweek feels about as current as the pearls and heels June Cleaver wore while making dinner on “Leave It to Beaver.” Back then in the 1960s, most workers earned overtime when they worked more than 40 hours a week, including those paid salaries. But now, few salaried workers get paid anything for extra hours, even when they have meager base salaries.
Working Washington has collected stories from workers across a range industries documenting the negative impacts on health and family life of overwork for little pay. These aren’t isolated examples. In a recent poll of employed U.S. adults, 32 percent said they typically worked 45 to 59 hours per week and 12 percent said more than 60 hours.
Washington State last updated the rules on overtime pay in 1976, deciding then that if you made less than $13,000 annually, you were entitled to overtime – even if you were salaried. That level was equivalent to a 40-hour workweek at 2.7 times minimum wage. At that time, 63 percent of salaried workers nationally qualified for overtime pay.
Unfortunately, the state threshold was not tied to inflation, and hasn’t changed been updated. It’s still $13,000. The federal threshold is $23,660, so supersedes Washington’s – but a minimum wage full-time worker in Washington earns $23,920. Essentially, no salaried worker in Washington qualifies for overtime pay, unless they’re willing to challenge their employer over whether they meet the complicated duties test.
At least some of that drain on time for family, rest, and life may be about to change. The Department of Labor & Industries (L&I) is rewriting the rules governing whom is protected by state overtime, minimum wage, and sick leave laws.
L&I has proposed an increase in the threshold to between 2 and 2.5 times state minimum wage– or between $56,160 and $70,200. That’s about the minimum income needed for a modest standard of living in most parts of the state outside King County.
Although below the historic level, this announcement has triggered outrage from some employers. Most comments to date on the proposal are from restaurant owners, clearly cutting and pasting from a form letter, along with a few nonprofit managers. They claim that the proposed increase would cause layoffs, conversion of “prestigious” salaried positions to hourly, and harm professional development opportunities.
This isn’t the first time employer associations have opposed a new labor standard. In 2011, when the Seattle City Council was considering a paid sick days law, it was opposed by the Seattle Chamber of Commerce and restauranteurs like Tom Douglas, who projected grossly inflated costs that would hurt workers and close businesses. A year after sick leave was implemented, they admitted it hadn’t been such a big deal.
Other business owners have routinely supported strong workplace standards, including sick leave, minimum wage, and paid family and medical leave. They’ve recognized that healthy and economically secure workers who have time to care for their families end up being more committed to their employer, providing better customer service, and helping boost the bottom line.
Updating the rules for overtime, minimum wage, and sick leave protections is long overdue. It will require some employers to adjust their practices – that’s the point. Wages have been languishing far too long for most workers, to the detriment of working families and all our communities.
Some employers will bump up salaries to the new level to avoid triggering overtime, but others can choose to continue paying people salaries below the new threshold. Those employees can still work flexible hours, work from home, and sometimes work late. When they do clock more than 40 hours in a week, they would be eligible for time and a half their equivalent hourly rate (annual salary divided by 2,080 hours).
For example, someone making $42,000 who worked 50 hours a week during the 2-month busy season would make an extra $2,700. If they worked 65 hours a week for three months, they’d make an extra $6,000, or $48,000 total for the year – a nice bump, but affordable for employers who are getting the benefit of that extra labor.
The state could also give businesses and nonprofits time to plan and adjust by phasing in an increase, just as the minimum wage boost approved by voters in 2016 is phasing in over four years.
Costs for housing, health care, child care, and other basic necessities have risen much faster than wages for most workers all across the state. Administrative assistants, restaurant managers, and nonprofit employees barely able to scrape together rent each month could use a boost in pay – or at least a little more control of their precious time and the right to paid sick leave. It’s time to tamp down the alarmist rhetoric and get real about the impacts. Washington should follow through and update its threshold to at least 2.5 times minimum wage early in the new year.
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