EAP Pre-Draft Proposed Rule Language

(Submitted on 10/25/18 by Porntip Wiborg)

Dear Labor and Industries,

I appreciate the opportunity to express my thoughts on the pre-draft rules for the Executive, Administrative and Professional exemptions from the state Minimum Wage Act, including the update of the salary overtime threshold.

I am a hospitality industry operator who is proud to provide jobs at all levels to people in my community. The hospitality industry is an industry of opportunity that offers everything from first-time jobs to lifelong careers. I want to continue to invest in my employees and provide them with opportunities to advance their careers in hospitality or elsewhere.

I am very concerned about tying the salary overtime threshold to a range of 1.5-3 times the minimum wage. Adopting a high salary threshold will create a wage gap between my employees and management and will ultimately impact jobs by eliminating middle-management positions. The proposed rule changes will negatively affect the hospitality career ladder and remove opportunities of growth for my employees.

I am also concerned with these pre-draft rules because the U.S. Department of Labor is currently examining the federal rules surrounding the Executive, Administrative and Professional overtime exemptions and there is uncertainty surrounding the outcome. I ask that Labor and Industries align any proposed changes to these exemptions with federal rules. As a business operator, we need alignment at the local, state and federal levels of government to help reduce confusion.

I am a proud member of my community and want to continue to provide jobs for employees at all levels, including middle-management positions. I ask for Labor and Industries to consider the impact of these pre-draft rules on the hospitality careers and our community and economy.

Thank you for the ability to submit my comments to you.

(Submitted on 10/25/18 by Barry Galen)

Dear Labor and Industries,

I appreciate the opportunity to express my thoughts on the pre-draft rules for the Executive, Administrative and Professional exemptions from the state Minimum Wage Act, including the update of the salary overtime threshold.

I am a hospitality industry operator who is proud to provide jobs at all levels to people in my community. The hospitality industry is an industry of opportunity that offers everything from first-time jobs to lifelong careers. I want to continue to invest in my employees and provide them with opportunities to advance their careers in hospitality or elsewhere.

I am very concerned about tying the salary overtime threshold to a range of 1.5-3 times the minimum wage. Adopting a high salary threshold will create a wage gap between my employees and management and will ultimately impact jobs by eliminating middle-management positions. The proposed rule changes will negatively affect the hospitality career ladder and remove opportunities of growth for my employees.

I am also concerned with these pre-draft rules because the U.S. Department of Labor is currently examining the federal rules surrounding the Executive, Administrative and Professional overtime exemptions and there is uncertainty surrounding the outcome. I ask that Labor and Industries align any proposed changes to these exemptions with federal rules. As a business operator, we need alignment at the local, state and federal levels of government to help reduce confusion.

I am a proud member of my community and want to continue to provide jobs for employees at all levels, including middle-management positions. I ask for Labor and Industries to consider the impact of these pre-draft rules on the hospitality careers and our community and economy.

Thank you for the ability to submit my comments to you.

(Submitted on 10/25/18 by Keith Mourer)

Dear Labor and Industries,

I operate a business in Washington state, which gives me the opportunity to give back to my community. It is also increasingly challenging to navigate labor laws that differ significantly federally, at the state level, and locally. It is not only difficult for our company to navigate, but it’s also confusing for employees. A significant amount of our time is spent comparing and complying with numerous requirements on the same issue, and it takes time away from overseeing our operations, serving our customers, and providing for our employees.

Our state law on salary overtime threshold is outdated and irrelevant because the federal requirement is higher. It makes sense to update our state law to align with the federal law, but the proposed rules as written would be yet another dramatic difference between one layer of requirements and another. It is difficult to provide feedback on the range of possibilities and impacts of the proposed rules – it has the ability to have additional employment requirements that are confusing to completely altering our business model and wipe out career positions in our industry.

We urge the department to pause rulemaking until the new federal standard is adopted, and then align our rule.

Thank you for your consideration.

(Submitted on 10/25/18 by Sandra Oh)

Dear Labor and Industries

Thank you for the opportunity to submit comments on behalf of the pre-draft rules for the Executive, Administrative and Professional exemptions from the state Minimum Wage Act including the update of the salary overtime threshold.

We understand that an update on this topic is appropriate; however, I would like to raise several concerns with elements of the pre-draft proposal. My first concern is about the future of the hospitality industry and its career ladder.

The hospitality industry is known for providing opportunities to first jobs, re-entry to the workforce and lifelong careers. As a business operator, I am proud to be able to invest in my employees, see them gain valuable skills and transfer them into leadership opportunities as they advance their careers. I am concerned that tying the salary overtime threshold to a range of $37,000 - $75,000 annually or 1.5-3 times the minimum wage will discourage my ability to provide more upward career growth opportunities.

Adopting any multiplier of the minimum wage would create a wage gap between my employees and management. Undercutting my employees by removal of the middle-management career ladder rungs would not benefit them, my business or the state economy.

My second concern with these pre-draft rules is that there is currently uncertainty with the federal government. Without clear guidance and rules in place for the Executive, Administrative and Professional exemptions, including the salary overtime threshold, this leaves our state vulnerable to adopting rules that may have to be fixed later. I am asking Labor and Industries to wait for the federal government to update their rules before moving forward with this process. We need alignment at the local, state and federal levels of government.

I appreciate the ability to be a part of the solution and submit my comments to you.

(Submitted on 10/25/18 by Satinderpal Bajwa)

Dear Labor and Industries

Thank you for the opportunity to submit comments on behalf of the pre-draft rules for the Executive, Administrative and Professional exemptions from the state Minimum Wage Act including the update of the salary overtime threshold.

We understand that an update on this topic is appropriate; however, I would like to raise several concerns with elements of the pre-draft proposal. My first concern is about the future of the hospitality industry and its career ladder.

The hospitality industry is known for providing opportunities to first jobs, re-entry to the workforce and lifelong careers. As a business operator, I am proud to be able to invest in my employees, see them gain valuable skills and transfer them into leadership opportunities as they advance their careers. I am concerned that tying the salary overtime threshold to a range of $37,000 - $75,000 annually or 1.5-3 times the minimum wage will discourage my ability to provide more upward career growth opportunities.

Adopting any multiplier of the minimum wage would create a wage gap between my employees and management. Undercutting my employees by removal of the middle-management career ladder rungs would not benefit them, my business or the state economy.

My second concern with these pre-draft rules is that there is currently uncertainty with the federal government. Without clear guidance and rules in place for the Executive, Administrative and Professional exemptions, including the salary overtime threshold, this leaves our state vulnerable to adopting rules that may have to be fixed later. I am asking Labor and Industries to wait for the federal government to update their rules before moving forward with this process. We need alignment at the local, state and federal levels of government.

I appreciate the ability to be a part of the solution and submit my comments to you.

As a small business owner with multiple locations around the state of Washington, I would like to offer my perspective on two points: First, having a state wide rate at the higher end of the proposed range would not reflect the diverse economic situations of Washington. I have employees in rural areas of eastern WA where a 40k position is a good job and certainly qualified for exemption status under the FLSA. While I concede that this type of compensation would not necessarily be good for down town Seattle (where I also have locations) I can say that the market has already seen to ensuring that employers like myself must pay a more reasonable wage to attract the needed talent. I urge the decision makers on this issue to consider the lower end of the range to best reflect the situation of all of Washington as a whole or index this standard based on cost of living per MSA. Second, tying the increase to this standard to minimum wage by a multiple will create wage parity problems quickly. If hourly workers are increasing, as per the WA state law, each year and this is multiplied by the suggested 150% then the gap between hourly and salary workers will continue to widen and create an unsustainable cost increase for employers. In my case specifically, we serve seniors on fixed incomes, our costs cannot always be simply passed on to the customer as is customary in Washington State without having negative effects on the most vulnerable of our population. This policy as proposed seems regressive in that way. I highly recommend that the State allows for the free market, especially in this environment of full employment, to manage itself and avoid changing the established standards under FLSA. Furthermore, the DOL at the federal level is in the process of examining the FLSA standards and any municipality or even state level regulation creates unnecessary burden for businesses and other organizations to be forced to abide by. Thank you for taking comments.

The minimum salary for overtime exemption should be raised to 3 times the minimum wage. Employers shouldn't get to take advantage of their low paid employees. Inequality is much too high now. High rates of overtime exemption are part of the cause. Every hour of unpaid labor takes money from the working class and puts it in the purse of the undeserving rich. Every one should get paid decently for the work they do and employers shouldn’t get too take advantage of their employees.

Jay Herzmark
SafeWork Washington

With a small company in agriculture that business dictates unpredictable hours as well as some long hours your rules are making it difficult to stay in business

To whom it may concern,

As the HR Director of a non-profit in an economically suppressed community, I am very concerned with the proposed policy change. I understand the intentions of this law but the proposed changes would have a negative impact on staffing as well as the services we are able to provide. As others have stated this change would likely result in layoffs as well as a reduction in services offered to community members. We could possibly support a proposal of separate guidelines based on cost of living.

I appreciate the opportunity to give feedback in regards to this issue.

Thank you.

Statewide feedback session in Richland, Washington on October 17, 2018, feedback.

As discussed at the meeting increasing the salaried level beyond 1.5 x Washington State minimum wage would be a great burden on employers in Eastern Washington. Increasing it beyond the Federal salaried weekly level would put many small companies out of business or drastically reduce their workforce and hinder many nonprofits from offering services. Eastern Washington (with the exception of Spokane and the Tri-Cities area) is agricultural based. Our area farmers, ranchers and orchardist and warehouses and grain elevator companies in Eastern Washington are limited in the ability to increase sales to cover increased payroll expenses. Farmers, ranchers, orchardists and the warehouses they work with operate under the Commission Merchant Act. The farmer that sells to a warehouse cannot control what he receives as income for the sale of his product. The warehouse acting as middle man cannot control what he receives for the commodity (even as they set the price) as that can fluctuate and the product is perishable and, when it arrives at destination, it might not even be good and no income will be received and no income is passed to the farmer (some have even received bills in the past rather than payments). The cattlemen and row crop farmers (grain, soy, etc.) are at the mercy of the commodities markets as well. All these businesses cannot predict if they will have net income or net loss at the end of the year. They do not have the ability to increase wages for salaried employees and cover the additional costs the way Western Washington does with fixed prices that can be built into budgets for the coming year. Because these businesses are the base for Eastern Washington, all other businesses up the ladder are affected by what our agricultural industry can or cannot do.

As I stated at the meeting, the Department of Labor & Industries can bring our RCWs up to date with Federal standards but we don't need to go beyond that. We don't always have to be the leader. Our state had the highest minimum wage for years until Alaska increased their minimum wage. This has hurt businesses. Recently Amazon threatened to pull out of Western Washington because of this issue with the City of Seattle. Boeing already has a plant in the mid-west. The unions want to protect the workers but do the workers have to be babysat? If you don't feel your wage is what you expect, move on to another business, occupation, etc. If our wages are too high in Washington, our citizens won't have jobs as businesses will relocate elsewhere.

Can we think outside the box for a change and come up with something like length of work history for a firm where the individual is rewarded with increased wages based on length of time worked for that firm. Many salaried individuals like the flex schedules provided by their employers for time off with pay. Accounting firms' salaried employees put in many hours during tax season but offer compensation (beyond sick leave and vacation) that can be used during the slow time to take additional time off. This is a big reason why many employees stay in this field and work in public accounting. They could work elsewhere 40 hours a week for a larger salary but would probably get 52 - 80 hours of paid time off. We could become a leader in new thinking outside the box instead of following wage increases that have been around for 110 years or more.

It is time to quit throwing money at these issues. When you do that everyone increases the price of their product or merchandise to cover the increased wages and taxes (don't forget that as wages increase so do the taxes at the Federal and State levels). This is called inflation. The young individual graduating from high school or college is not worth the same hourly wage or salary as the individual who has education and years of work experience. Let's reward those individuals. Let's put into place some choices such as paid time off that allows the worker to choose between higher wage or more paid time off. You would be surprised how many would chose the PTO.

Also, suggested was a system that looks at the state in sections like Oregon does. We cannot compete with Seattle with their high wages (and yes they need those just to purchase a home and car). We are small communities and our small town governments with small tax bases, businesses and nonprofits cannot fund what you are proposing. You must factor in our wage base, our cost of living, our housing market, etc. You cannot treat us like Seattle, Vancouver, Tacoma and Olympia or even Spokane and the Tri-Cities.

Please take your time to get all view points. You can even use the Department of Revenue to get an idea of what the volume of sales for wholesale, retail and services is in the smaller communities and how this would impact our businesses. You would see that comparing these figures to Western Washington would show quite a variance.

Please think of all businesses that must generate income. If you work for government, you don't usually generate income so it is never a question of:

"How will I pay for this increase?" Those in private business and our nonprofits out there must answer this question every day.

Thank you for the opportunity to give feedback on your proposals. Please remember the little guys out here in Eastern Washington. We are citizens of this state too.

(Submitted on 10/25/18 by Ray Thomas)

Dear Director Sacks:

My name is Ray Thomas. My wife and I have lived in Bothell for 37 years. I have worked as a nuclear medicine technologist for 40 years, twenty-three as Manager of the Nuclear Medicine Department at the University of Washington.

Please place into effect regulations that will require all employers of any worker making less than three times the minimum wage, currently about $75,000 per year, to pay these employees time and a half for any hours beyond their scheduled shift and any over forty hours per week.

This is important because:

1. A middle income in Washington State now exceeds $75,000 per year and in many areas that barely meets a livable wage.
2. Employers and their Human Resource departments (whatever happened to Personnel Departments!?) have manipulated the system by liberally applying such titles as lead, supervisor, and others to low paying jobs and labelling them as overtime exempt.
3. As a manger I fought hard to insure my staff were paid well for their services and fought policies that attempted to deny them compensation for their hours and dedication.
4. As a staff member and union member, I witnessed attempts to manipulate the payroll and schedule systems to deny or reduce overtime compensation. I worked with union organizers to add leads and supervisors who often made as little as 3-5% more than staff positions but covered over time when departments were short staffed and yet were denied over time or sometimes only paid straight time for their OT.
5. My son works for an employer who promoted him to an exempt position paying less than he was making with OT but still requires him to work excessive hours with no compensation or time off. This detracts from his time with his two children, reduces the quality of time due to his fatigue, and limits his ability to independently support them in this area since his salary is capped below $60,000. He additionally has to use leave time for any medical or child related time off.
6. As a manager and worker, I have also seen employers alter workers' schedules to limit overtime within 80 hour pay periods, rescheduling or altering shifts to avoid paying overtime .
7. These policies effectively decrease pay, weaken workers' family and community networks and ultimately weaken our communities and state.

Changing current policies would help to decrease what is fundamentally systemic wage theft. Restoring and strengthening overtime rights will improve conditions for workers and their families and produce more income in our communities and neighborhoods.

Workers that can proudly support their families build stronger, healthier communities and help to create more jobs.

(Submitted on 10/25/18 by Billy Henry)

To Whom It May Concern:

I writing to express my concerns about L&I’s intent to change the rules governing EAP pay. As the Executive Director of a small, social services, nonprofit organization, the proposed policy change would have a significant and profound impact on our ability to retain our current staffing and continue to provide high-quality programs to improve the lives of individuals in our state. I urge you to reconsider changing any rules as this change would likely result in layoffs at numerous nonprofits, and most importantly, reductions in social services to individuals across our state who benefit from services.

(Submitted on 10/25/18 by Bobbi Keen)

While I agree that the exempt wage needs to increase, I am concerned with the factors being proposed, 1.5 is reasonable but anything more than that at once will hurt small businesses. I am also concerned that the federal rates are also being looked at and it would be easier on businesses to implement if they are the same.

(Submitted on 10/25/18 by Greg Parker, Iron Horse Brewery)

The 3x minimum wage is crazy. Literally every single salaried employee I have will have to go to hourly and start tracking their hours. I assure you, none of them will be satisfied with that outcome, nor will I. Salary is such a great way for people to get the compensation they deserve while allowing them the flexibility to work when they need and are called to work by their duties without having to monitor and track every minute. My managers set their own schedules and seldom average much more than 40 hours a week but when conditions are presented in which they must work longer hours, the only way our organization could manage that would be to then cut their hours later to offset the substantial cost.

I highly recommend limiting the minimum to 1.5X minimum wage. Let us not forget that Washington minimum wage is quite high and on it's way up. I operate in Eastern Washington and while it $75,000 may not be much of a wage in the Puget Sound area, I assure you, it is a quite substantial one in rural Washington.

I really don't see the need for this change at this time. The labor market is strong and any employee who is being treated poorly and theoretically being 'abused' by an employer by the use of salary would have little trouble finding a better work environment.

As a business that has to compete for business on a national level, it is imperative to our success that we follow federal standards and not have restrictions and costs that others in our industry are not bearing.

This will keep us from being competitive against other growers and packers of onions and potatoes in Idaho, Texas, Georgia, etc.We already face huge geographical challenges to get our products to market, this will add to our burden.

We do not support this proposed rule, it not only puts us at a huge disadvantage on a domestic level but even larger disadvantage for us to compete on an international level.

The proposed rule is not well thought out and the costs cannot be absorbed by Washington state companies that need to sell their products and services against other domestic business doing the same. It will drive business out of our state and into other states.

I oppose the proposed chart, of increasing the L&I salary and overtime rules by a range of 1.5 to 3x. Our agency cares for people with developmental disabilities, our state's most vulnerable population. The type of change you are proposing does two things: 1) stretches our limited staff with an unnecessary burden of figuring out the difference between Federal and State regulations. 2) limits services to those we serve due to this unnecessary compliance requirement. We need to MATCH Federal law! The population we serve depends on our support, and our employees depend on their jobs. This proposed change jeopardizes both, and definitely limits job growth. Please help the business in Washington State, not harm us. I ask that you go back to the drawing board with this and do not make increases at this time. The unintended consequences of this type of increase would be both negative and long term. Cindy O'Neill

Thank you for this opportunity to comment on the proposed overtime rules. My name is Jared Wiberg and I am proud to employ over 200 people in Spokane Wa and our organization employs over 700 in WA state. We have been a Top 100 Employer in WA State 6 times and we our proud of our employees and the work that they do every day to serve the citizens of Washington State.

Our industry is that of caring for others - seniors, disabled, DD or developmentally delayed and vulnerable people. The work we do is tremendous and hugely impactful. I am very concerned about the proposed overtime rules. As an employer I know this will create wage gaps between employees and management. This will eliminate opportunity for employees to move to middle management or to have a viable career growth opportunity. This will cause us to rely more heavily on automation/technology to keep costs down. Our business simply won't be able to handle the additional costs without cutting employees or benefits somewhere else to help offset the additional burden imposed.

Operating within WA state already has significant challenges for employers with the increasing number of differing regulations between federal, state and city. This additional burden being proposed will be difficult for all employers and like it the world typically works, the burden will be passed on to the consumer. In our industry we serve predominately seniors who are on a fixed income and every additional burden placed on our business to operate (increasing cost to exist as a company) increases cost to this vulnerable population which reduces the number of people who can receive care. Where do these people go to get help once they can no longer afford the assistance?? Providing care inside a person's home is the cheapest aid a vulnerable person can get and with minimum wages going up so much and costs of healthcare - so too does the cost to our vulnerable seniors. This is a crisis that is escalating quickly across the nation and very much so here in Washington State.

These proposed rules will have devastating impacts on every service line that serves senior and vulnerable people. The Federal rules being created regarding this topic are still a huge concern for our industry and to take action on something that is already in motion but yet not finalized will only cause additional hardship for every employer in WA state. We urge the department to wait on rule making until the new federal standard is created and then align any rule making with the federal standard to keep continuity and fairness.

Thank you for your time and consideration.

Our non-profit aquarium and education center with a budget under $350,000 has been working hard over the last four years to increase and diversify revenue to pay fair wages and offer benefits to staff members. We cannot simply raise prices on our services and call it a day to pay for these changes. In four years we have increased our revenue by approximately $50,000 through extensive hours put into fundraising and grant writing and pricing review for our minimal earned revenue. With those long hours, we have turned 5 part-time positions into 3 full-time and 3 part-time positions. The full-time employees also receive limited benefits, when there were no benefits before. Along the way we have complied with the state minimum wage increase, concurrently increasing wages for full-time employees, included the sick leave provision for part-time employees, and are preparing for Family Leave provisions. When we do not have enough staff coverage, we cannot care for our marine life adequately or conduct the the learning programs that form the core of our mission. For a building of 3,200 sq ft, we reach approximately 25,000 people per year through these efforts. My concerns for our organization lie with the proposed duties test changes and the wide range of the multiplier. With a small staff, it is entirely reasonable that a person described as an executive or a professional would devote more than twenty percent of their duties to non-managerial functions, such as staffing the cash register, cleaning the bathroom, repairing exhibits, teaching programs or other duties as needed. We also must write grants, conduct donor meetings, assist with the Board of Directors, place marketing and public relations pieces, write strategic plans, comply with financial reporting, report on mission impact, and other core functions. If we expand the multiplier to 3x the minimum wage in 2020 no one in our organization would be exempt, which would have a significant negative impact on our programming offerings (reducing service hours and program outputs), as well as on our ability to raise funds to meet increased costs of doing business. Labor costs are increasing in a concentrated fashion at a time when donors and foundations are increasingly reluctant to pay for 'overhead' including the many long hours that go into fundraising work in order to pay equitably in our sector. As such, we please request that you look at the 1.5x minimum wage multiplier, which, though still a major stretch for our organization, would lead to fewer program cuts. We also recommend increasing the percentage of time spend non-managerial functions to greater than 20%.

Thank you for the opportunity to comment on the proposed overtime rules under consideration. While I am supportive of ensuring that workers and specifically exempt workers are paid a fair wage, the range of 1.5 to 3 would not be sustainable in very rural areas of the state. When the final adjustment for the minimum wage goes into effect, the salary threshold of $84,200 at 3X the amount of minimum would result of our organization having to re-classify over 50% of our current exempt staff. Many of those staff are Directors with large staff to supervise and the need for flexible schedules. The cost of living in Forks is dramatically different than many parts of the state. A salary of 50,000 in Forks would need to be 110,270 in Seattle. To create the same rules for cities with a vastly different cost of living places a great disadvantage to businesses in rural communities. The 1.5 factor seems reasonable to all parts of the state or the rule must take into consideration variations in the state.

(Submitted on 10/23/18 by Kevin McCarthy, White Pass Co., Inc.)

Thank you for allowing me to comment on the new overtime rule under consideration. I was in attendance at the Tri-Cities forum on October 17th. It was a good concise presentation by Josh Grice, Allison Drake and Brent DeBeaumont. The issue of most interest was the salary pay level at which the Department will choose to include salaried employees in the overtime rule.

I am asking the Department to step back and be as non-invasive as possible to employers and companies due to some facts of employment that must be taken into account when deliberating changes to the overtime rule.

1) All employers value good employees and will do everything possible within the company's financial capability to retain those employees; higher pay, medical benefits, vacation benefits, sick leave, family leave, flexible hours. In short, a good employee is invaluable.
2) Not all industries are as financially successful as others; for instance, it is not possible to compare a large engineering firm with a small non-profit.
3) Thankfully, we have individuals who would rather work for a small company than a large corporation, do not penalize their company with overly burdensome rules (see #2).
4) Not all employers are decent and generous, however, the vast majority are and therefore, there are always better options for those seeking employment; good employers succeed, poor ones struggle. Employees always have the right to choose a better job situation.

I ask you to not penalize the remarkably high majority of good employers just to thwart the few. A lower increase in the 1.3-1.5 times minimum wage is as intrusive as the Department should go for the reasons stated above. Washington has a very high minimum wage, the bar starts very high!

Thank you for your work on this issue.