EAP Pre-Draft Proposed Rule Language

(Submitted on 10/23/18 by Jessica Matthews, YMCA of the Inland Northwest)

My name is Jessica Matthews and I am the HR Director at the YMCA of the Inland Northwest, located in Spokane, WA. Our organization wants to ensure the new rule is fair to employees and employers, and we believe that 1.5x the minimum wage would be fair to both. Any multiplier beyond 1.5 will have significant impacts for our organization. We would also support separate guidelines for different areas of the state, based on cost of living. We strongly encourage you to use the 1.5x multiplier for the Executive, Administrative, Professional & Outside Sales exemptions.

(Submitted on 10/22/18 by Nicole Grant, MLK Labor)

Dear L&I,

MLK Labor represents 100,000 unionized workers in various industries across King County. We write today to express our express our support for restoring overtime rights by raising the threshold for overtime exemption to triple the minimum wage, about $75,000/year. We ask that this change be made as quickly as possible. Workers have been waiting 40 years for these rules to be updated and should not have to wait any longer to correct this historical wrong.

Please let us know if you have any questions.

(Submitted on 10/18/18 by Gary Benke, Dave Gedlund, Mike Kerbs, Mike Barnhart, Nolan Lockwood, and Howie Bargreen)

Dear Labor Standards Policy Drake,

I operate a business in Washington state, specifically within the grocery, food and beverage industry. It is increasingly challenging to navigate labor laws that differ significantly federally, at the state level, and locally. A significant amount of our time is spent comparing and complying with numerous requirements on the same issue, just at different levels of government. This causes confusion for employers and employees, duplication issues, and a need for administrative policies that explain the difference between the federal, state and local rules.

Our state law on salary overtime threshold is outdated and irrelevant because the federal requirement is higher. I agree that it needs to be updated, but the U.S. Department is Labor is already going through a process to update the federal law. The WA State Department of Labor and Industries should wait until the federal rulemaking process is finished, then align their rules with the federal rules. If the Department of Labor and Industries waits until the Department of Labor is finished, then Washington State will only need to go through the rulemaking process once instead of multiple times in order to meet the federal standard. This will save time and money for all parties involved in creating new state rules for the EAP exemptions.

I urge the department to pause rulemaking until the new federal standard is adopted, and then align our rules with the federal requirements.

Thank you for your time.

(Submitted on 10/15/18 by David Vitt; 10/17/18 by Desiree Seghetti)

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 10/12/18 by Denise Vickerman)

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 10/12/18 by Russell Brent, Gary Parker, Bret Wirta, and Jack Emmons)

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 10/12/18 by Kyle Simmons, Mike McKinnon, Chad Mackay, and Jeanette Palmer)

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 10/11/18 by Christopher Bebo and Jim Miller)

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 10/11/18 by Scott Perry and Gabriel Wiborg)

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 10/10/18 by Dennis Waldron, Jeanette Radmer, Mike Butler, Miles Wilkins, Michael Scott, Bonnie Avolio, Karen Beach, Jim Pulver, Ted Furst, Audrey McCombs, Michael Ellinghouse, Paul Twamley, Shawn Walker, and Randy Dixon)

Dear Labor and Industries,

As a business operator in our state I wanted to ensure my voice is heard in the rulemaking process for the Executive, Administrative and Professional exemptions from the Minimum Wage Act, including the update of the salary overtime threshold. As a member of Washington’s hospitality industry, I am particularly interested in preserving my ability to provide my employees with opportunities to advance their careers.

We know the hospitality industry is unique because of the variety of different positions offered, from entry-level, middle-level management to upper management and ownership. As currently written, the pre-draft rules propose to tie the minimum wage to the salary threshold to a range of $37,000 - $75,000 annually or 1.5-3 times the state minimum wage. Adopting a high salary threshold would erase those mid-career management positions that are critical to climbing the hospitality career ladder. Removal of the mid-career positions and leaving all managerial positions to upper management would undercut the workforce in an already tough labor market.

Additionally, the U.S. Department of Labor is also examining the federal rules surrounding the Executive, Administrative and Professional exemptions, including the salary overtime threshold. I believe Labor and Industries should align any proposed changes to these exemptions with the federal rules. In the long-run, alignment with the federal government’s rules will create less confusion and continued work on this topic.

I am proud to serve my community and provide all levels of jobs for my employees. I ask Labor and Industries to consider the overall economic impact these pre-draft rules could have on our state’s economy. The hospitality industry is not the only sector that may have to drastically shift because of the final outcome of these rules.

Thank you for the opportunity to be engaged with this process through the submission of my comments.

(Submitted on 10/9/18 by Patrick McPherson, Shawn Virk, Matthew Brawner, Cristy Smith, Sara Reilly, Debbie Wardrop, Derek Baziotis, Paula Craft, John Little, Russ Heaton, Mike Cavanaugh, Hannah Carter, Price Gledhill, Ami Grubbs, William Frederick, Kathryn Lowry, Paul Pickering, Tyler Floe, Peter Braun, Lee Carney, James Hull, Daniel Vavrniec, Katie Driscoll, Cindy Goulet, Jeffrey Farmer, Pat Farmer, Phil Costello, Chris Farmer, Ron Oh, Jim Ross, Travis Rosenthal, Simon Lee, Janelle Hoeglund, Michael McQuay, Satpal Sohal, Christopher Peacock, Jeff Roberts, Thomas Owens, Herb Baze, Pat Hosier, Juergen Oswald, Dean Feldmeier, Jack Emmons, Sabrie Evans, and Jacque Fatrell)

Dear Labor and Industries,

As a business operator in our state I wanted to ensure my voice is heard in the rulemaking process for the Executive, Administrative and Professional exemptions from the Minimum Wage Act, including the update of the salary overtime threshold. As a member of Washington’s hospitality industry, I am particularly interested in preserving my ability to provide my employees with opportunities to advance their careers.

We know the hospitality industry is unique because of the variety of different positions offered, from entry-level, middle-level management to upper management and ownership. As currently written, the pre-draft rules propose to tie the minimum wage to the salary threshold to a range of $37,000 - $75,000 annually or 1.5-3 times the state minimum wage. Adopting a high salary threshold would erase those mid-career management positions that are critical to climbing the hospitality career ladder. Removal of the mid-career positions and leaving all managerial positions to upper management would undercut the workforce in an already tough labor market.

Additionally, the U.S. Department of Labor is also examining the federal rules surrounding the Executive, Administrative and Professional exemptions, including the salary overtime threshold. I believe Labor and Industries should align any proposed changes to these exemptions with the federal rules. In the long-run, alignment with the federal government’s rules will create less confusion and continued work on this topic.

I am proud to serve my community and provide all levels of jobs for my employees. I ask Labor and Industries to consider the overall economic impact these pre-draft rules could have on our state’s economy. The hospitality industry is not the only sector that may have to drastically shift because of the final outcome of these rules.

Thank you for the opportunity to be engaged with this process through the submission of my comments.

My name is Nancy Kasmar. I live in Snoqualmie, Washington, I am an HR professional certified as a SHRM Senior Certified Professional. I have also earned the Certified Compensation Professional designation.

I am the 2018 President of Washington State SHRM, the statewide professional affiliate of the Society for Human Resource Management. Washington State SHRM represents the over 8,000 HR professionals working in Washington State. I am also the co-owner of Compensation Connections. We are a compensation consultancy with nine employees, serving hundreds of clients along the West Coast.

My comments are based on data gathered by my professional society and informed by my experience in working with my clients. Based on this information, I offer the following suggestions:

1. When changing the FLSA salary threshold, set the new threshold for the entire United States (a single standard). This is absolutely critical for multi-state employers.
2. Use the 20th percentile of salaried workers in the South, which is the same as the 2004 standard. Use the standard for all workers, not an industry subset.
3. Review the salary threshold every 5 years to avoid large jumps in the salary threshold over time.
4. Base the salary threshold on all performance compensation paid to employees.
5. The salary threshold chosen needs to be a reasonable workable standard to identify roles where exempt work is a possibility.
6. DO NOT ties increases in the salary threshold to the CPI or another indicator.
7. Keep the job duties tests as they currently exist.
8. Use a single salary threshold for all exemptions (administrative, executive and professional exemptions).
9. DO NOT restore the short and long duties tests.

Thank you,
Nancy Kasmar, MS, CCP, SHRM-SCP

By increasing costs and regulations on businesses, the state of Washington is creating a hostile business environment, which is counterproductive to the people it claims to help – the employees. First of all, increasing costs and regulations on businesses incentivizes businesses to automate. Automating certain positions are cheaper and more efficient as it reduces human error. In addition, increasing costs and regulations on businesses incentives businesses to outsource certain positions overseas or out-of-state, especially in border cities where minimum wage is much cheaper a few miles away. With increasing technology, many positions no longer need to be done onsite. Many positions can be done offsite and out-of-state. Moreover, increasing costs and regulations on businesses incentivizes businesses to sell here and/or move to another state with a friendlier business environment. We are already seeing that with companies like Amazon and Boeing. Instead of expanding their businesses here in Washington, they are building in other states that are more favorable for businesses. Finally, increasing costs and regulations on businesses incentivizes businesses to raise their prices to accommodate the government’s new taxes. This creates higher food prices, higher gas prices, higher disposal prices, higher daycare prices – higher costs across the board for consumers. In conclusion, when Washington creates a hostile environment for businesses to operate in this state, it does not help the people it claims to help - the employees. On the contrary, it directly hurts them. When employees’ jobs are eliminated, depending on the business cycle, they may not be able to readily replace it. So, the state not only lose a tax payer, which hurts their revenue, they gain another dependent, which increases their costs. If this happens in a massive scale, it will hurt all Washingtonians.

I understand and agree with the intention of this law, but have some significant concerns as the Executive Director of a small nonprofit in rural Washington. Specifically, the upper end of the proposed threshold would make it difficult if not impossible for us to continue to deliver the programs we do to our community. I would be in favor of a 1.5-2 times minimum wage threshold, with preference for 1.5. 2 times the threshold would be difficult, but feasible. 3 times the minimum wage would be crippling to our organization. As others have commented, we live here for a variety of reasons and the range of the cost of living in various areas of the state (outside of the Seattle area) should be taken into account with this update.

I appreciate the consideration of exempt staff and recognize the value in reviewing the income threshold, but I have major concerns with the upper end of the proposed threshold (e.g. anything greater than 2 times minimum wage) because it would exclude a significant number of the engineering professionals who may be in positions of authority, creative work, and performance goals. This is evidenced based on both state-wide and Spokane-specific income data from US Census and Salary.com. Not everyone is Washington State lives in Seattle and I don't appreciate the consideration that income in other areas should be commensurate with a Seattle cost-of-living. Professionals like me choose to live in other areas of the state for reasons other than income, but our businesses are still viable and critical enterprises.

I also agree that raising the salary base to 1.5 times and to perhaps phase year two or three to 2.0. The 3.0 is not an option for our non-profit as all funds earned through program and membership fees need to cover the costs of operations, therefore the proposed 3.0 times the state minimum wage (which also continues to rise) would then have to be passed on to the participants. This is not an option for most of our families. Funds raised through donations and grants currently covers children in need of scholarship. If the proposed 3.0 increase goes through, those funds raised would need to support the salary changes, not serving those in need. There is only so much funding available!

I wish to respectfully submit my opinion of the proposed salary basis for executive, administrative and professional employees. Specifically addressing the proposal for salary basis to equal a minimum of 1.5 to 3.0 times the state minimum wage. I support 2.0 times the state minimum wage. Since the pending federal salary base is approximately 1.98 times our current minimum wage, 2.0 times is slightly more generous. Plus with Washington State’s minimum wage slated to increase by 4.348% in 2019 and then by 12.5% in 2020 with CPI-W based COLA adjustments thereafter, every year the exempt salary basis will automatically increase to maintain the mandated relationship. Eg, if the basis is 2.0 times minimum wage, when minimum wage increases $1.50 per hour in 2020, the salary basis must increase by $3.00 per hour.

I am a CPA who is the general manager of a small international clientele business in Island County. This salary basis affects me personally. However, I have a fiduciary duty to my business and its other employees. In evaluating the impact of the state-wide minimum wage changes in combination with the proposed salary basis change for exempt employees proposed, increasing wages by the percentages noted above, plus the accompanying increases in employer-paid payroll taxes, my business is stretching past what it can afford. Given the global economic and geopolitical factors that affect my business, I cannot assume that my revenue stream will increase by the same percentages to offset these mandated wage increases.

Others have posted comments on this website from the non-profit side. Small for-profit businesses face the same challenges. In discussions with colleagues in similar positions at area small for-profit and non-profit businesses, all are concerned about the same issues I noted above.

Personally, qualifying as exempt allows me the freedom to put in the time needed to perform the job needed to manage my business versus watching the clock. Given today’s technology, even when not physically in the office, I am connected to the office and working. Tracking that time is challenging. My concern is if I am re-classed as non-exempt because my business cannot afford to pay the salary basis passed, will this lead to me working off clock or becoming less productive? Both will have negative impacts on my business. In discussions with my colleagues, they expressed the same concerns, plus I saw this same concern posted in other comments.

Fixing the exempt salary level at 2.0 times minimum wage will be a stretch for some small businesses and non-profits, but it is a lot fairer than mandating above that level. If a level above 2.0 is set, then I see this as discrimination against small businesses and non-profits causing employees in similar positions and otherwise meeting all other tests for exempt status, to be treated differently strictly due to the size of the employer.

Thank you for allowing me to submit my personal and professional opinions of the proposed change.

I support the adoption of the draft rules on EAP exemptions from the minimum wage act with a threshold of 3x the state minimum wage. Changes to these exemptions are long overdue. Far too many wage earners are required as a condition of employment to work hour beyond 40 per week, in some cases far beyond, without overtime pay. The rules as drafted make the exemptions much more closely fit the conceptual difference between overtime eligible work and overtime exempt work. The type of business is immaterial, including whether the business is a nonprofit. The regulations should be written for the type of work, not the type of business at which the work is performed. Either the nature of the work is such that it should be overtime exempt or it is not. Many types of businesses may cite various impacts, hardships, or funding constraints, just as employees may cite the various impacts hardships on themselves and their families when they are not compensated by overtime for long hours. Please adopt the rules as written with the threshold of 3x the state minimum wage.

We believe it is a good idea to tie the Exempt wages to the current minimum wage so that this wage amount stays current. We would suggest a 1.5 times the minimum wage amount. Many small non profit organizations have a very difficult time funding for high salaries, our employees want to do this type of work and the funding we receive does not allow us to compete with private business wages, We do however usually provide great benefits. 2 times the minimum wage would force individuals to not report all of the hours they work, simply because they are running the agency and cannot afford to pay overtime if they are not making the minimum amount to be exempt. Non profits also tend to have more inexperienced staff who are doing exempt work but are not paid 2 or 3X the minimum wage. Please consider 1.5x the minimum wage for the exempt staff salary so as not to hurt non profits. Thank you

This requirement "a) Who owns at least a bona fide twenty-percent equity interest in the enterprise in
which the employee is employed, regardless of whether the business is a corporate or
other type of organization, and who is actively engaged in its management; and.." may not be applicable to those who work within a PLLC agreement, i.e. no one holds a 25% equity interest but all have equal say