Dayton Chronicle - Your Hometown News Source

OLYMPIA–If you are not an employer, you may not care about exempt and non-exempt employee salary ranges, but changes to an obscure state law is causing many employers to lay off staff and reduce available working hours, so you might want to pay attention.

Washington State requires employers to pay non-exempt employees (those employees that don't meet several thresholds the state defines) overtime for every hour worked. Over the last few years, the minimum salary threshold to qualify as an exempt employee has been increased. This minimum salary is based on an arbitrary multiplier of the state minimum wage and 2,080 hours. The current multiplier is 1.75 and it is changing next year to 2.00.

Since the minimum wage is also increasing to $16.28 in 2024, the exempt salary minimum is increasing from $57,293 to $67,724. Just 3 years ago the threshold was $35,100 and by 2028 it will be $92,560.

For every salaried or hourly employee making less than the threshold working over 40 hours a week, overtime payment is required.

For non-profit organizations, the problem is especially acute given the large number of volunteer hours their employees give to an organization.

Bill Tsoukalas, the Snohomish County Executive Director of the Boys and Girls Club brings the problem into sharp relief. The Boys and Girls Club provides before and after-school hours activities for kids and is primarily funded through local donations. Over the last few years, Tsoukalas has seen overtime costs skyrocket, to the tune of several hundred thousand dollars per year, as the minimum threshold has increased.

"You can't just shut the doors at 5pm to avoid paying overtime", Tsoukalas says. "Parents get stuck in traffic or have other emergencies and we have to take care of the kids until they arrive to pick them up."

When an employee is exempt, they can stay late and volunteer their time.

For a non-profit organization reliant on donations, the salary range requirement can only be met by laying staff off, reducing service hours or asking for more donations. In the case of the Boys and Girls Club, it's a little of everything.

The problem is similar in the case of for-profit businesses. Employees that used to be exempt are now classified as non-exempt and overtime becomes mandatory. For employers that may have offered flexible working hours to allow employees to start later to meet family obligations, can no longer offer that flexibility as they cannot afford to pay overtime on the hours made up by the employee.

Another profession that is exempt from the minimum salary range, are teachers, but recent proposals from the federal government, backed by the National Teachers Association (NEA) seek to change that. The result will be a massive increase in the costs of running schools, a reduction in teaching hours, teacher layoffs and increases in class sizes. Another likely result is an increase in school levies and taxes to meet the additional costs.

Changes to the state exempt and non-exempt salary ranges cause significant impact to businesses (particularly small businesses) and non-profits. Washington will have increased the minimum by almost 300% over an 8-year period.

The Snohomish Boys and Girls Club, because of the bureaucratic change, have seen a reduction in the services they can offer.

"The change doesn't affect the higher paid employees; it affects the employees who work directly with the kids. Less hours means we can't provide all the services we would like and keep childcare affordable", said Tsoukalas.

Washington legislators should re-visit the salary range limits this upcoming legislative session and either suspend or repeal the proposed increase in salary minimums. The current increases are destroying jobs and reducing employees working hours.