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Navigating the Legal Landscape: Washington Employers’ Guide to Changes in 2024

2024 is right around the corner and so are some significant changes in Washington employment law.  It is time to prepare for these changes, which include wage increases and PFML premium decreases.  A summary of the significant changes is below:

Minimum Wage Increase

Effective January 1, 2024, Washington’s minimum wage for non-exempt employees will rise to $16.28 per hour, far exceeding the national minimum and making Washington the highest-wage state in the country.

Within the City of Seattle, however, the minimum wage varies based on employer size and employee benefits. Here’s a breakdown:

Large Employers (501+ employees):

  • Minimum wage: $19.97 per hour
  • Applies to all employees, regardless of benefits or tip income.

Small Employers (500 or fewer employees):

  • Scenario 1: Low Medical Benefits or Low Tip Income:
    • Minimum wage: $19.97 per hour
    • Applies if employees receive less than $2.72 per hour in medical benefits or earn less than $2.72 per hour in tips.
  • Scenario 2: Higher Medical Benefits or Higher Tip Income:
    • Minimum wage: $17.25 per hour
    • Applies if employers provide at least $2.72 per hour in medical benefits or employees earn more than $2.72 per hour in tips.

Exempt Employee Salary Threshold Increase

Get ready for a substantial increase in the salary threshold for overtime exempt employees. Starting January 1, 2024, Washington’s minimum weekly salary for exempt employees jumps to $1,302.40, translating to an annual salary of $67,724.80.  This represents a notable rise over the 2023 thresholds, which stood at $57,293.60 for small employers and $65,478.40 for large employers.

For exempt computer professionals, the option to pay an hourly rate remains.  The minimum hourly rate for these professionals in 2024 will be $56.98.

Remember, these new thresholds apply to all exempt employees, except for exempt computer professionals when paid an hourly rate. Ensure your employee compensation complies with the updated regulations to avoid potential legal issues. In addition, remember that the overtime exemption requires that employees meet both the minimum salary threshold and job duties requirements.  We are ready to help you evaluate whether your exempt positions meet the job duties requirements.

Worker’s Compensation Rate Increase

Washington state-fund employers will see a 4.9% increase in their workers’ compensation insurance rates starting January 1, 2024. This translates to an additional $65 per year, on average, for each full-time employee, according to the Washington State Department of Labor & Industries (L&I).

Drug Testing – Cannabis Testing Limitations

Effective January 1, 2024, Washington employers can no longer base hiring decisions solely on pre-employment drug test results that detect non-psychoactive cannabis metabolites. This means that employers can’t reject candidates solely because they have used cannabis off-duty if it doesn’t impair their ability to perform the job.

However, there are important exceptions:

  • Psychoactive Cannabis: Employers can still use drug tests that detect psychoactive cannabis metabolites which indicate recent cannabis use and potential impairment.
  • Other Testing Scenarios: Drug testing is still allowed in other situations beyond pre-employment, such as following an accident or when there’s reasonable suspicion of impairment.
  • Exempt Positions: Certain jobs requiring federal background checks or security clearance are exempt from the new law. Some positions deemed “safety-sensitive” by the employer are exempt if impairment “presents a substantial risk of death.” This includes law enforcement, fire services, first responders, airline and aerospace industries, corrections officers, and other roles where safety is paramount.

Next Steps for Employers:

  1. Confirm Testing Vendor Compliance: Ensure your drug screening vendor can provide tests that comply with the new law by January 1st. If they cannot, you may need to stop pre-employment marijuana testing for positions that are not exempt.
  2. Identify Safety-Sensitive Jobs: Clearly identify and list any “safety-sensitive” positions in job postings to justify pre-employment marijuana testing.
  3. Seek Legal Counsel: Consider consulting with legal counsel for specific guidance on implementing the new law in your workplace.

This new legislation aims to balance the protection of employee privacy and off-duty activities with the employer’s right to maintain a safe and productive workplace. By understanding the law’s nuances and taking appropriate action, Washington employers can navigate these changes effectively.

Paid Family and Medical Leave – Premium Decrease!

The Washington Paid Family and Medical Leave (WPFML) program is experiencing its first-ever premium rate decrease! Effective January 1, 2024, the rate will drop from 0.8% to 0.74% of covered wages. There are also slight changes to the employer/employee split of the premium:

  • Employers: Responsible for 28.57% of the total premium (up from 27.24% in 2023).
  • Employees: Responsible for 71.43% of the total premium (down from 72.76% in 2023).

In addition to enjoying a reduced premium payment, employers will also appreciate greater access to employee claims. Effective January 1, 2024, employers will be classified as an “interested party,” which allows access to certain WPFML claim information about current employees. This includes the type of leave, requested duration, approved dates, and whether benefits were approved and paid for specific weeks. The Employment Security Department has stated that the information will be available as a new tab in each employer’s portal account, accessible through Secure Access Washington (SAW), where employers currently file WPFML quarterly reports and pay premiums.

Next steps for employers:

  • Review Payroll Systems: Confirm with your payroll provider that they are prepared to reflect the new premium rate and employer/employee split. (Do not assume that the payroll provider is prepared for this)
  • Employee Communication: Inform your employees about the changes to the program and their contribution amount.
  • Review SAW account: Review and file any additional information about current employees taking Paid Family Medical Leave.

Sick Leave Payout to Construction Workers.

Beginning January 1, 2024, employers of short-term, nonresidential, construction workers in Washington must cash out sick leave upon the employee’s exit. This change in the law ensures construction workers are compensated for accrued sick leave, even if their employment is brief.

Here are some key points for employers to remember:

  • The new law applies to all construction workers covered under NAICS Code 23, excluding those involved in residential building construction.
  • Employees who terminate employment within 90 days must be paid for their accrued, unused sick leave.
  • Employers are not required to reinstate the employee’s sick leave balance if they are rehired within 12 months.

At PRK Livengood, we are committed to helping you achieve your business goals and continue to have compliant employment practices in the ever changing legal landscape in Washington so you can thrive in the New Year.

As always, we are here to answer any questions you may have and assist you in implementing compliant and effective strategies.

Firm Contacts:

Marcia Ellsworth
Kevin Hansen
David Seeley
Lauren Titchbourne

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