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Labor & Industries needs to rethink its new overtime rules | Guest Opinion

Here’s what the state of Washington does to keep workers safe

Washington State Department of Labor and Industries offers an overview of the Division of Occupational Safety and Health and its three primary roles in safeguarding Washington's workplaces; education, consultation and enforcement.
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Washington State Department of Labor and Industries offers an overview of the Division of Occupational Safety and Health and its three primary roles in safeguarding Washington's workplaces; education, consultation and enforcement.

I am a co-owner of a hospitality business that currently has 73 employees. That number will swell to over 110 around the 1st of September. The hospitality industry offers employment opportunities to a wide variety of people, including those who face disadvantages in employment.

Our workforce is more than 60% female. We welcome people of color, those with education challenges and members of the LGBTQ community. We offer employment to high school and college students, as well as opportunities to the blind and developmentally disabled.

I would also point out that we are currently in an employment environment where retaining quality people is challenging and training is expensive.

The abuses of overtime exempt salaried people that may have been prevalent in the past have become rare. If you are an exempt salaried person who believes that you are being mistreated by your employer, I would urge you to talk to the Washington State Department of Labor and Industries or to an attorney who specializes in labor and workplace issues. Remedies do exist.

Currently the State Department of L&I is seeking input on proposed changes to the rules and minimum salary levels for workers that fall under EAP (executive, administrative, professional and outside sales) overtime exempt rules.

Current minimum salary levels for exempt workers are $250 per week under Washington State rules and $455 per week under federal rules. L&I’s methodology was basically to return to the percentage pay differentials and rules that existed in the mid-20th Century when many of these rules were adopted.

L&I is proposing to move the minimum EAP exempt salary to an estimated $1,536 per week ($79,872 annually) over a 6-year period starting on January 1, 2020. The details can be found at bit.ly/lni_overtime.

While there is broad agreement that updates to EAP salaries are long overdue, many business owners and managers have grave concerns about the proposed rule changes and salary levels and believe that L&I’s methodology is flawed because current technology, work environments, workforce education and economy are vastly different from 60 or 70 years ago.

I don’t know of an industry that will not be adversely affected as the proposed rules and salary levels roll out over the next six years.

For our company, the ability to develop and promote workers into mid-management and executive positions, as we scale our business, will be severely hampered, as will our ability to effectively incentivize salespeople.

We are in an industry that averages 4.5% profit margins. Implementation of the proposed rules will require drastic changes in our operations and will cause significant worker displacements industry-wide. Businesses must do what they need to do to survive.

The most important thing that an employer can do for its staff is to stay in business.

In addition, the impact of the proposed rules and salary levels on non-profit service providers will be especially impactful. There will be members of our community who desperately need services, including children, who will no longer be able to receive those services.

I would ask L&I for the following:

1. Set the new salary minimums at no more than 1.75 % of minimum wage for a 40-hour workweek ($945) and allow adjustments annually based on the CPI-W from there.

2. Delay implementation until, at least, July 2021. Our industry and many others, including non-profit service providers, already will be dealing with a 12% payroll increase due to the last minimum wage adjustment from $12.00 to $13.50 on January 1, 2020.

3. Keep rule changes in line with federal rules.

4. Consider regionalization of salary levels. The difference in the cost of living between Seattle and the east side of our state is significant.

Please make your voice be heard! L&I must receive all comments by 5 p.m. September 6.

Steve Simmons is a local businessman and community and business advocate. This op-ed is adapted from testimony Simmons gave at a recent L&I hearing.

To comment

How to comment on the L&I’s proposed overtime rules:

Email: EAPRules@Lni.wa.gov

Mail written comments to: Employment Standards Program PO Box 4451 Olympia, WA 98504-4510

L&I must receive all comments by 5 p.m. September 6.

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