State OT changes doubtful: Local laws likely to trump federal

By Shirleen Holt
Seattle Times business reporter

July 12, 2003

Even if the Bush administration relaxes federal overtime rules, workers in Washington are unlikely to be affected any time soon.

The state's own wage laws, which offer more protections to employees than the proposal now being debated in Congress, will remain in place unless the Department of Labor and Industries decides to change them, a process that could take months or even years.

"Our agency is waiting to see whether the federal laws are actually adopted before we'll analyze any potential changes for the state's overtime rules," said Patrick Woods, who helps manage compliance for Washington's labor department. Even then, Woods added, "it doesn't necessarily mean we rush to change state law."

Washington's overtime rules mirror the current federal standards, which basically say employees are entitled to get paid time-and-a-half for working beyond a 40-hour week unless they fall into the exempt categories of salaried executives, administrators or professionals.

The proposed federal changes, the first major overhaul in 50 years, are responding in part to a string of class-action lawsuits over unpaid overtime. Many of the revisions would make it easier for employers to classify some jobs as exempt, a move applauded by business interests and criticized by labor.

The labor department says the revision would affect at least 644,000 white-collar workers, although the labor-backed Economic Policy Institute argues that as many as 8 million workers would be denied overtime.

The plan also would make salaried employees earning less than $22,100, or $425 a week, automatically eligible for overtime. This is nearly three times the current threshold of $8,060 ($155 a week) and a benefit to an estimated 1.3 million low-wage workers nationwide.

If the federal plan is adopted this year, Washington employers would be bound by whatever law is more favorable to workers. (Federal rules, however, will apply to U.S. government workers in Washington.) This is already the case with the minimum wage. Washington employers must pay hourly workers at least $7.01 an hour, while most other states follow the federal minimum of $5.15.

Still, the prospect of having two standards, even if they're temporary, concerns Bellevue lawyer Mark Busto, who represents employers.

"You've got pages of regulations on the federal level that you must apply to determine if the employee's exempt or not. Some of those may have been adopted by the state and some may not have been."

Determining who is and who isn't exempt from overtime has been at the heart of several high-profile lawsuits and a key reason that the U.S. Department of Labor decided to overhaul the rules. Many of them have been in place since 1938 when the Fair Labor Standards Act was enacted to protect Depression-era workers from exploitation.

In May, Bank of America settled a $4 million overtime suit brought by salaried employees in Washington who said they were encouraged to work off the clock selling bank services. Under the proposed changes, most of those earning more than $65,000 would be exempt from overtime.

Starbucks settled an $18 million suit filed by store managers in California. The managers said that more than half of their time was spent performing routine coffee-bar duties, making them only partial supervisors.

Under existing law, a manager in the service industry can't be exempt if he spends more than 40 percent of his time doing nonmanagerial duties. The new rules eliminate the 40-60 test, making it more difficult for service-industry managers to be eligible for overtime.

In 2001 workers filed 79 overtime class-action lawsuits against employers, surpassing for the first time job-discrimination suits.

Shirleen Holt: 206-464-8316 or sholt@seattletimes.com

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