Washington and Maine Approve Salary Increases for White Collar Exemptions in the New Year, with Colorado Poised to Follow Suit

As previously discussed, the federal Department of Labor has begun the process of increasing the minimum salary threshold for employees that fall under the “white collar” exemptions. Joining Alaska, New York, and California, Washington State and Maine have now approved higher salary thresholds for employees that fall under the exemptions; Colorado is expected to follow in early 2020.

Effective July 1, 2020, Washington employers will be required to pay a higher salary to satisfy the professional, administrative, and executive exemptions, with gradual increases from July 1, 2020, until January 1, 2026. Over the years, the increases will differ for small employers (50 or fewer employees in Washington) and large employers (51 or more employees in Washington), as multipliers of minimum wage. The annual increases will include an adjustment for the Consumer Price Index.  A full breakdown of the effect of Washington’s changes to the exemption minimum salary, by employer size and for exempt computer professionals, is below:

Washington State will require a minimum hourly rate for exempt computer professionals:

Along with Washington, Maine’s salary threshold for exemption from overtime eligibility will increase to $36,000 per year, higher than the federal increase to $35,568 per year. Effective January 1, 2020, the Maine Department of Labor has changed the state’s minimum wage from $11 to $12 per hour for most workers, which simultaneously will increase the minimum salary for the white-collar exemptions to a minimum salary of $692.31 per week.

In addition, the Colorado Department of Labor and Employment is expected to adopt an increase in minimum salary by January 10, 2020, through the Colorado Overtime & Minimum Pay Standards Order (“COMPS Order”), with the first changes effective beginning July 1, 2020. Here is an annual breakdown:

Currently, certain provisions of the Colorado Minimum Wage order apply only to employees in certain industries (e.g., retail, commercial, food & beverage, and health & medical). If adopted, when the COMPS Order would go into effect on March 1, 2020, it would apply to all employees in the state. This would expand the daily overtime and break time rules to all employers in the state. Colorado employers are also required to provide notice to employees via a display of a Minimum Wage Order poster in each workplace, unless such posting would be impractical given the workspace, and must also update their employee handbooks and handbook acknowledgement forms to include a copy and signed receipt of the COMPS Order. Colorado has issued new vacation payment and carryover rules, which will require reviewing handbook policies, as well.

With January 1, 2020, quickly approaching, employers should review their current policies and employee exemption status to determine where changes may be necessary to comply with federal and state requirements.