Minimum Wage and Overtime. As of January 1, 2021, the minimum wage in the state of Washington is $13.69 per hour. The Department of Labor and Industries (L&I) calculates the state minimum wage. Washington employers must pay most employees at least the minimum wage for every hour worked. Most employees who work more than 40 hours in a seven-day workweek must be paid overtime. Overtime pay must be at least 1.5 times the employee's regular hourly rate and employees may not waive their right to overtime pay. Employers must pay overtime to eligible workers regardless of employer size. Collective bargaining agreements and employers may provide more generous overtime pay than state law requires. L&I handles worker rights complaints under the Wage Payment Act. Workers may also choose to file a civil action for violations under the Minimum Wage and Wage Payment Acts.
Overtime Exemptions. Although most employees are entitled to overtime pay after working 40 hours in a seven-day workweek, there are specific categories of employees who are not required to receive overtime, such as executive, administrative, and professional employees in some circumstances; casual laborers; certain seasonal employees; workers performing forest protection and fire prevention activities; and most agricultural workers.
Overtime does not apply to individuals working on a farm involved in:
Recent Washington Supreme Court Case. On November 5, 2020, the Washington Supreme Court ruled in Jose Martinez-Cuevas v. DeRuyter Bros. Dairy, Inc., that the current law exempting agricultural workers from overtime pay, as applied to dairy workers, is unconstitutional under the Washington State Constitution. Specifically, the court held that the stated purpose of the Minimum Wage Act is to protect the health and safety of Washington workers, as required by the constitution, and under it, the agricultural exemption to overtime pay granted an impermissible privilege or immunity to dairy employers not to pay overtime to their workers. The decision did not address whether dairy employers must pay retroactive overtime for work in excess of 40 hours prior to the date of the decision because neither party raised the issue in its statement of grounds for review, therefore, the issue was not properly before the court.
Affirmative Defense. In any cause of action filed in court on or after October 11, 2017, and before June 30, 2024, seeking overtime pay under state law, the employer and any other person alleged to be liable for overtime pay shall have an affirmative defense to any claim or cause of action for recovery of wages and related damages, penalties, and fees, if the liable party pays the compensation owed under the act.
To establish an affirmative defense, agricultural employers (employers) may elect to make payments, including statutory interest, to employees for previously unpaid overtime for the three years before the effective date of the act. Employers must make reasonable and good faith efforts to make the specified payments. If employers cannot locate the employees owed, employers may pay the overtime owed to L&I, with supporting documentation. An employer who elects to pay overtime owed, but through good faith error fails to do so, shall not be held liable for certain overtime claims if the employer pays the overtime owed to the employee within 30 days of discovering the error.
Account. The agricultural overtime pay reimbursement account (account) is created. If an employer pays overtime owed to L&I through the process above, the funds must be deposited into the account. An employer may apply to L&I to received overtime owed. As of June 30, 2024, any funds in the account must be distributed on behalf of agricultural workers as directed by a committee selected and chaired by L&I.
Other. The statute of limitations tolling in certain overtime pay cases is extended until the employer completes payment of all overtime owed. The agricultural exemption contained in the Minimum Wage Act is removed.
The committee recommended a different version of the bill than what was heard. PRO: This bill does not overturn a court decision but does address an issue the court was silent on, whether farmers are liable to pay three years of retroactive overtime. The bill is needed to rectify an unfair situation. This is a matter of fairness. Dairy employers operated under the current laws and interpretations and now they are being told to go back and pay overtime. Farmers were not violating the law, the law changed on them. Dairy farmers are not opposed to paying overtime. If employers have to pay overtime they will be out of business and not hire workers. Farms are being sued to collect overtime wages even though they never violated the laws.
CON: We should let the courts do their job and apply the standards already in place to decide the issue. The agricultural exemption has existed for 60 years and has saved the industry millions of dollars. The bill seeks to grant the same unconstitutional privilege to the industry the court invalidated. This bill will hurt Washington workers. The bill is not limited to exceptional cases and this would allow back-pay in many cases, whether related to agricultural employers or not.
OTHER: This bill also matters in other parts of the business community, not just agriculture.