Compensation

FLSA and WMWA overtime eligibility and exemption

About the FLSA and WMWA

The Fair Labor Standards Act (FLSA) and Washington Minimum Wage Act (WMWA) establish minimum standards that may be exceeded, but cannot be waived or reduced. The FLSA is federal law; the WMWA is state law. Employers must comply with any federal, state or municipal laws, regulations or ordinances, or collective bargaining agreements or employer implemented policies that provide greater benefits than those established by the FLSA. When state laws differ from the federal FLSA, an employer must comply with the standard most generous to employees.

Since the new, higher state salary threshold for overtime exemption under WMWA will be more generous than the FLSA salary threshold as of January 1, 2021, the WMWA threshold will be applied.

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FLSA and WMWA requirements

The Fair Labor Standards Act (FLSA) and Washington State Minimum Wage Act (WMWA) require that most workers receive a minimum overtime pay of 1.5 times the employee’s regular pay rate for all hours worked over 40 hours in a seven-day workweek. The UW calls positions that are covered by FLSA and WMWA overtime regulations “non-exempt” or “overtime eligible.” All hourly paid temporary and student workers are, by definition, overtime eligible. Only positions that meet certain narrowly defined criteria are exempt from the FLSA and WMWA’s overtime requirements. Compensation is responsible for determining the overtime status for all staff positions.

The workweek

The University has a single, standardized workweek for all employees in all locations on all campuses that begins Monday, 12:00 a.m. and ends the following Sunday at 11:59 p.m. This fixed block of seven consecutive 24-hour periods or 168 hours is sometimes referred to as the “Monday-Sunday workweek.”

Changes to the Overtime Exempt Salary Basis Level
Changes effective January 1, 2020

Effective January 1, 2020 under the FLSA, the minimum actual gross salary a position can be paid and still remain overtime exempt increased from $455 per week to $684 per week ($35,568 per year, or $2,964 per month). As a result, many professional staff, contract covered staff, and classified non-union overtime positions that had been overtime exempt were changed to overtime eligible because they did not meet the new, higher weekly salary threshold. This was particularly true of part-time positions, since the $684 per week threshold applies regardless of whether a position is part-time or full-time. For example, under the 2020 FLSA salary threshold, a professional staff employee with a full-time equivalent salary of $70,000 who works half time, would have a weekly salary below $684 per week and would need to be in an overtime eligible job code.

Changes effective January 1, 2021

Effective January 1, 2021 under the WMWA, the minimum actual gross salary a position can be paid and still remain overtime exempt will increase from $684 per week to $958.38 per week ($49,836 per year or $4,153 per month). As a result, professional staff, contract covered staff, and classified non-union overtime positions that do not meet the new, higher weekly salary threshold must be changed to overtime eligible. This is still particularly true of part-time positions, since the $958.38 per week threshold applies regardless of whether a position is part-time or full-time. For example, a professional staff employee with a full-time equivalent salary of $90,000 who works half time, would have a weekly salary of $865, below $958.38 per week, and would need to be in an overtime eligible job code.

The January 1, 2021 change mentioned above is one of a series of changes in the overtime threshold for employees who work in Washington State. These changes are required by a change in Washington State overtime law that sets salary thresholds at the state level which increase each year on January 1 until January 1, 2028, when the state threshold reaches 2.5 times the Washington State minimum wage. From that point on, the state threshold will increase annually each January 1 based on inflation by the same percentage that the Washington State minimum wage does.

Due to the monthly base pay model at the UW requiring a whole dollar amount, the UW’s thresholds are slightly higher than the state’s thresholds as shown in the table below:
L&I Salary Threshold Effective Jan 1, 2021

Weekly $958.38
Monthly $4,153
Annual $49,836
Overtime exempt to overtime eligible pairs

To assist managers, administrators and other staff in identifying the appropriate overtime eligible job code that corresponds to an overtime exempt professional staff, contract covered staff, or classified non-union job code, the compensation office has prepared a “walk across” document. If you know the employee’s current overtime exempt job code, you can look it up in the walk-across and find the overtime eligible “pair” for that job.

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FLSA and WMWA overtime exemption standards

To be exempt from FLSA and WMWA overtime regulations, a position’s salary amount and job duties must meet criteria specified in the regulations. These criteria are referred to as the “salary basis” and “duties” tests, respectively. Some types of “blue collar” and “Police, Fire Fighters, Paramedic & Other First Responder” work do not qualify for exemption by definition.

Compensation is responsible for performing analysis on each position to determine the positions that are covered by the FLSA and WMWA overtime regulations. This determination is normally made at the time a position is created and may be reviewed when a position is reviewed for reclassification (classified titles) or for salary or title assignment (professional staff positions).

All of the following requirements must be met for a position to be exempt from the FLSA and WMWA overtime payment requirement:

  1. 1. The position must be paid on a salary (not hourly) basis, except for certain computer workers (see the Computer Professional Exemption). Being paid on a salary basis means that an employee is paid the same amount per workweek regardless of the hours the employee actually works.
  2. In 2020 the position must be paid at least $684 per week ($35,568 per year or $2,964 per month), regardless of percent time worked: e.g. a half-time employee who is paid $683 per week and a full-time employee who is paid $683 per week are both overtime covered, regardless of their job duties, even though the full-time equivalent pay for the half time employee is actually $1,366 per week.ALERT: Effective January 1, 2021, a change in Washington State overtime law that sets salary thresholds at the state level raises the salary threshold minimum to $958.38 per week ($49,836 per year or $4,153 per month). This minimum salary requirement applies to both full-time and part-time employees regardless of how many hours they work.
  3. The position’s job duties must meet the duties test for one or more for one of the exemption categories—see below.

Under the overtime provisions of the WMWA, a higher-than-FLSA rate will apply starting January 1, 2021 according to the following schedule established by the Washington State Department of Labor and Industries:

Effective Date Weekly Salary Monthly Salary Annual Salary
January 1, 2021 (actual) $958.38 $4,153 $49,836
January 1, 2022 (estimated) $986 $4,273 $51,272
January 1, 2023 (estimated) $1,152 $4,992 $59,904
January 1, 2024 (estimated) $1,177 $5,101 $61,204
January 1, 2025 (estimated) $1,353 $5,863 $70,356
January 1, 2026 (estimated) $1,382 $5,989 $71,864
January 1, 2027 (estimated) $1,569 $6,799 $81,588
January 1, 2028 (estimated) $1,603 $6,946 $83,356

Note: The values in the above chart shown as “estimated” were calculated by the Washington Department of Labor and Industries based on an assumption that inflation as measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-U) will increase at the rate of 2.17% per year. Actual threshold values for each year will vary based on the actual rate of inflation. For example, the estimated annual salary threshold for 2021 was originally estimated at $50,180. The actual salary threshold as announced in October 2020 was lower than the original estimate due to an inflation rate of less than 2.17%.

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FLSA and WMWA exemption categories and checklists

The following are summaries of the FLSA- and WMWA-defined exemption criteria. Checklists for the most commonly applied exemption criteria may be used to help employees and managers assess whether a position is likely to be covered by or exempt from the FLSA and WMWA overtime regulations. These are also known as “duties tests.” The duties tests under the WMWA parallel those under the FLSA. A link to the checklist follows the exemption category description. Some terms have special meanings as applied by the FLSA and WMWA regulations. See the FLSA Terms & Definitions webpage.

The exemption categories in the following list are described below.

To qualify for the executive exemption, all of the following tests must be met:

  • The employee must be compensated on a salary basis (as defined in the regulations) at a rate not less than $684 per week. This is going up to $958.38 per week effective January 1, 2021;
  • The employee’s primary duty must be managing the enterprise, or managing a customarily recognized department or subdivision of the enterprise;
  • The employee must customarily and regularly direct the work of at least two or more other full-time employees or their equivalent; and
  • The employee must have the authority to hire or fire other employees, or the employee’s suggestions and recommendations as to the hiring, firing, advancement, promotion or any other change of status of other employees must be given particular weight.

Executive Exemption Checklist (PDF)

To qualify for the administrative exemption, all of the following tests must be met:

  • The employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $684 per week. This is going up to $958.38 per week effective January 1, 2021;
  • The employee’s primary function must be to perform office or non-manual work that is directly related to the management or general business operations of the employer or the employer’s customers; and
  • The employee’s primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.

Administrative Exemption Checklist (PDF)

To qualify for the learned professional exemption, all of the following tests must be met:

  • The employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $684 per week. This is going up to $958.38 per week effective January 1, 2021;
  • The employee’s primary duty must be to perform work requiring advanced knowledge, defined as work which is predominantly intellectual in character and which requires the consistent exercise of discretion and judgment;
  • The advanced knowledge must be in a field of science or learning, such as law, medicine, nursing, accounting, actuarial computation, engineering, education, and various types of physical, chemical, and biological sciences; and
  • The advanced knowledge must be customarily acquired by a prolonged course of specialized intellectual instruction.

To qualify for the creative professional exemption, all of the following tests must be met:

  • The employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $684 per week. This is going up to $958.38 per week effective January 1, 2021;
  • The employee’s primary duty must be to perform work requiring invention, imagination, originality or talent in a recognized field of artistic or creative endeavor, such as music, writing, acting, and the graphic arts.

Learned or Creative Professional Exemption Checklist (PDF)

To qualify for the computer professional exemption, the following tests must be met:

  • The employee must be compensated either on a salary or fee basis (as defined in the regulations) at a rate not less than $684 per week. This is going up to $958.38 per week effective January 1, 2021, or, if compensated on an hourly basis, at a rate not less than $47.92 an hour;
  • The employee must be employed as a computer systems analyst, computer programmer, software engineer, or other similarly skilled worker in the computer field; and,
  • The employee’s primary duty must consist of:
    • The application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software or system functional specifications;
    • The design, development, documentation, analysis, creation, testing or modification of computer systems or programs, including prototypes, based on and related to user or system design specifications;
    • The design, documentation, testing, creation, or modification of computer programs related to machine operating systems; or
    • A combination of the aforementioned duties, the performance of which requires the same level of skills.

Computer Professional Exemption Checklist (PDF)

Employees performing office or non-manual work and who are paid total annual compensation of $107,432 or more (which must include at least $684 per week paid on a salary or fee basis) are exempt from FLSA overtime regulations if they customarily and regularly perform at least one of the duties of an exempt executive, administrative, or learned or creative professional employee identified in the standard tests for exemption.

To qualify for the outside sales employee exemption, all of the following tests must be met:

  • The employee’s primary duty must be making sales (as defined in the FLSA), or obtaining orders or contracts for services or for the use of facilities for which a consideration will be paid by the client or customer; and
  • The employee must be customarily and regularly engaged away from the employer’s place or places of business.

Outside Sales Exemption Checklist (PDF)

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Duties that do not qualify for FLSA and WMWA overtime exemption

Blue Collar Workers – The exemptions apply only to “white collar” employees who meet the salary and duties tests (see below) set forth in the regulations. The exemptions do not apply to manual laborers or other “blue collar” workers who perform work involving repetitive operations with their hands, physical skill and energy. FLSA- and WMWA-covered, non-management employees in production, maintenance, construction and similar occupations such as carpenters, electricians, mechanics, plumbers, iron workers, craftsmen, operating engineers, longshoremen, construction workers, and laborers are entitled to overtime premium pay under the FLSA and WMWA, and are not exempt under the regulations no matter how highly paid they might be.

Police, Fire Fighters, Paramedics & Other First Responders – FLSA and WMWA overtime exemptions do not apply to police officers, detectives, deputy sheriffs, state troopers, highway patrol officers, investigators, inspectors, correctional officers, parole or probation officers, park rangers, fire fighters, paramedics, emergency medical technicians, ambulance personnel, rescue workers, hazardous materials workers, and similar employees, regardless of rank or pay level, who perform work such as preventing, controlling or extinguishing fires of any type; rescuing fire, crime or accident victims; preventing or detecting crimes; conducting investigations or inspections for violations of law; performing surveillance; pursuing, restraining and apprehending suspects; detaining or supervising suspected and convicted criminals, including those on probation or parole; interviewing witnesses; interrogating and fingerprinting suspects; preparing investigative reports; or other similar work.

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Moving nonexempt job duties to exempt employees

If an overtime exempt employee’s duties permanently change such that the employee’s actual duties no longer meet a duties test or the employee’s pay falls below the overtime salary threshold, the employee must be moved to an overtime eligible job code. Once this takes place, the employee must track all hours worked and must be paid 1.5 times their regular hourly-equivalent rate for hours worked in excess of 40 hours in a workweek.

Temporary emergency performance of nonexempt job duties

During the period of a public health emergency declared by a Federal, State, or local authority, exempt employees may temporarily perform nonexempt duties without losing their exempt status as long as they continue to be paid on a salary basis of at least $684 per week. This is going up to $958.38 per week effective January 1, 2021.

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