2021 Salary Thresholds Set for Overtime Exempt Employees
With Wednesday’s announcement of the state minimum wage for 2021, the Washington State Department of Labor & Industries (L&I) has calculated the new state minimum salary thresholds for overtime exempt employees. The new thresholds will go into effect Jan. 1, 2021.
Using data from the U.S. Bureau of Statistics, L&I has determined the minimum wage for next year will be $13.69 an hour, up from $13.50 an hour in 2020.
That new minimum wage will impact some employees exempt from overtime and other protections of the Minimum Wage Act. Employees defined as executive, administrative and professional, as well as outside salespeople and computer professionals must perform certain duties and usually must earn a salary that meets or exceeds a minimum specified threshold.
L&I changed how this minimum threshold is determined when updates to the state overtime rules took effect July 1. The salary thresholds are now a multiplier of the minimum wage.
Using the 2021 minimum wage, L&I has calculated the salary thresholds taking effect Jan. 1, 2021:
Small businesses (1-50 employees): An exempt employee must earn a salary of at least 1.5 times the minimum wage, or $821.40 a week ($42,712.80/year).
Large businesses (51 or more employees): An exempt employee must earn a salary of at least 1.75 times the minimum wage, or $958.30 a week ($49,831.60/year).
In addition, the new minimum wage changes the 2021 thresholds for computer professionals who are paid by the hour.
Because the new state thresholds will be more favorable than the federal threshold of $684/week ($35,568/year), Washington employers will have to adhere to the state thresholds in 2021.
The threshold multiplier will be phased in until it reaches 2.5 times the minimum wage in 2028. At that point, increases will be determined by any changes in the minimum wage caused by inflation.
As part of its education and outreach efforts, L&I is offering webinars to help employers and employees understand the rule changes. The webinar begin with a 45-minute presentation by outreach specialists from L&I’s Employment Standards program, followed by 30 minutes for questions and answers. You can register at L&I’s calendar of workshops, events and webinars. Look for “Overtime Exemptions Training Sessions (Webinar)” in the “Event Title” pull down menu.
L&I has also developed an array of digital tools. They include an online course plus facts sheets, case examples, technical documents, and threshold implementation charts that can be found at L&I’s overtime resource center web page.
You can read the complete rules in WAC 296-128, sections 500-545.
For additional information, you can contact L&I’s Employment Standards program at EAPRules@Lni.wa.gov or toll free at 1-866-219-7321.
You also can sign up to receive email updates on the overtime employment rule changes and other wage matters at Lni.wa.gov/wagenews.