What is an Exempt Employee in Washington State?

As a recruiter or hiring manager, it is essential to understand how to classify employees as either exempt or non-exempt in Washington State. Exempt employees are exempted from overtime pay and may not be eligible for some state labor laws. To determine employee classification, certain criteria must be met. In this post, we will discuss the criteria for an exempt employee in Washington state to provide you with better clarity on the subject.

Salary Basis Test

To qualify as an exempt employee in Washington State under the salary basis test, the employee must be paid on a salary basis. To be paid on a salary basis, the employee must receive a predetermined amount of salary, regardless of the number of hours worked or the quality of work performed. The minimum weekly salary required for an exempt employee in Washington State is $821.40, which translates to an annual salary of $42,712.80. If the employee is salaried but makes less than this amount, they are considered non-exempt.

Executive, Administrative, or Professional Test

An employee can also qualify as exempt if they meet the executive, administrative, or professional test requirements. For the Executive test, the employee must supervise and direct the work of two or more full-time employees, and have the authority to hire and fire employees. For the Administrative test, the employee must perform work that is directly related to the management of the employer's business operations. For the Professional test, the employee must have advanced knowledge in a specific field that requires specialized education.

Outside Sales Test

Employees who engage in sales outside the employer's establishment are exempt from overtime and minimum wage laws under the Outside Sales Test. Those who work in an inside sales role do not qualify for this exemption.

Computer Professional Test

To meet the Computer Professional Test criteria, employees must be employed as a computer systems analyst, computer programmer, software engineer, or a similar position. The primary job duties must involve the application of systems analysis, programming, or software engineering principles in developing or modifying software or hardware.

Highly Compensated Employee Test

Another way to qualify as an exempt employee is through the Highly Compensated Employee Test. To do so, the employee must earn an annual salary of at least $107,432.00, and the primary duty may include performing office or non-manual work.

What is the Minimum Salary for an Exempt Employee in Washington State 2023?

The Washington State Department of Labor and Industries announced in September 2021 that the minimum salary threshold for an employee to be classified as exempt under the state's Minimum Wage Act will increase to $83,356 annually starting in 2023. This represents a significant increase from the current threshold of $49,831, which has been in effect since 2020. The increase is part of a phased approach to gradually raise the minimum salary threshold over several years.

For employers in the state, this means that they will need to pay close attention to the salaries of their exempt employees to ensure compliance with the new salary thresholds. If an employee is currently classified as exempt but does not meet the new salary threshold, they may become eligible for overtime pay for any hours worked over 40 in a workweek, unless another exemption applies.

Talent Sourcing with EasySource

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Conclusion

In conclusion, understanding the criteria of exempt employees in Washington State is essential as a hiring manager or recruiter. By ensuring that the employees are appropriately classified, they can be paid appropriately and treated according to their status. Remember, a misclassification can lead to significant legal and financial consequences. We hope this blog post has provided you with valuable information on exempt employee classification in Washington State.