AN ACT Relating to allowing employee choice and flexibility in the executive, administrative, and professional exception to the minimum wage act; amending RCW 49.46.010; adding a new section to chapter 49.46 RCW; and creating a new section.

NEW SECTION. Sec. 1. The legislature finds that many employees want flexibility in when, where, or how they work to meet their individual and families' needs. Technological advancements such as mobile phones and laptop computers with email and high speed internet have also led many employers to allow salaried, overtime exempt employees to choose when, where, or how they work. However, the Washington state department of labor and industries recently adopted by rule new salary thresholds for executive, administrative, and professional employees to be exempt from overtime which will result in many employers reclassifying salaried employees to hourly employees and these employees losing the ability to work when, where, or how they want in order for employers to be in compliance with state law. The legislature therefore intends to provide employees meeting the overtime exempt duties test and earning a base salary of at least one and one-half times the minimum hourly wage under RCW 49.46.020 for a forty-hour week to voluntarily choose to be overtime exempt in order to provide them with the work flexibility that being an overtime exempt, salaried employee provides.

(a) Any individual (i) employed as a hand harvest laborer and paid on a piece rate basis in an operation which has been, and is generally and customarily recognized as having been, paid on a piece rate basis in the region of employment; (ii) who commutes daily from his or her permanent residence to the farm on which he or she is employed; and (iii) who has been employed in agriculture less than thirteen weeks during the preceding calendar year;

(c) Any individual employed in a bona fide executive, administrative, or professional capacity or in the capacity of outside salesperson as those terms are defined and delimited by rules of the director, subject to section 3 of this act. However, those terms shall be defined and delimited by the human resources director pursuant to chapter 41.06 RCW for employees employed under the director of personnel's jurisdiction;

(d) Any individual engaged in the activities of an educational, charitable, religious, state or local governmental body or agency, or nonprofit organization where the employer-employee relationship does not in fact exist or where the services are rendered to such organizations gratuitously. If the individual receives reimbursement in lieu of compensation for normally incurred out-of-pocket expenses or receives a nominal amount of compensation per unit of voluntary service rendered, an employer-employee relationship is deemed not to exist for the purpose of this section or for purposes of membership or qualification in any state, local government, or publicly supported retirement system other than that provided under chapter 41.24 RCW;

(e) Any individual employed full time by any state or local governmental body or agency who provides voluntary services but only with regard to the provision of the voluntary services. The voluntary services and any compensation therefor shall not affect or add to qualification, entitlement, or benefit rights under any state, local government, or publicly supported retirement system other than that provided under chapter 41.24 RCW;

(f) Any newspaper vendor, carrier, or delivery person selling or distributing newspapers on the street, to offices, to businesses, or from house to house and any freelance news correspondent or "stringer" who, using his or her own equipment, chooses to submit material for publication for free or a fee when such material is published;

(i) Any individual employed by any charitable institution charged with child care responsibilities engaged primarily in the development of character or citizenship or promoting health or physical fitness or providing or sponsoring recreational opportunities or facilities for young people or members of the armed forces of the United States;

(j) Any individual whose duties require that he or she reside or sleep at the place of his or her employment or who otherwise spends a substantial portion of his or her work time subject to call, and not engaged in the performance of active duties;

(l) Any individual who holds a public elective or appointive office of the state, any county, city, town, municipal corporation or quasi municipal corporation, political subdivision, or any instrumentality thereof, or any employee of the state legislature;

(o) An individual who is at least sixteen years old but under twenty-one years old, in his or her capacity as a player for a junior ice hockey team that is a member of a regional, national, or international league and that contracts with an arena owned, operated, or managed by a public facilities district created under chapter 36.100 RCW;

(6) "Retail or service establishment" means an establishment seventy-five percent of whose annual dollar volume of sales of goods or services, or both, is not for resale and is recognized as retail sales or services in the particular industry;

(7) "Wage" means compensation due to an employee by reason of employment, payable in legal tender of the United States or checks on banks convertible into cash on demand at full face value, subject to such deductions, charges, or allowances as may be permitted by rules of the director.

(1) The department of labor and industries must initiate a rule-making process to allow employees that: (a) Earn a base salary of at least one and one-half times the minimum hourly wage under RCW 49.46.020 for a forty-hour week; and (b) would otherwise meet duties-related criteria for exemption under RCW 49.46.010(3)(c), to voluntarily choose to be classified as an employee that is exempt from the overtime requirements established under RCW 49.46.130.

(2) In adopting such rules, the department must consider how to protect an employee from undue pressure from an employer to make a particular choice, how to protect an employee from retaliation based on the choice they made, and how to incorporate variable compensation into determining eligibility under the salary threshold for employees to choose such classification.