Below you will find changes in Washington State and local laws set to go into effect in January 2021. We suspect that due to the ongoing pandemic, the number of expected changes for 2021 are lower than in years past, and we anticipate additional laws and regulations affecting Washington employers will be forthcoming in 2021 as the Legislature and agencies continue to adjust, and COVID-19 continues to impact all aspects of the employment relationship.
Minimum Wage Increase
Washington’s minimum wage increases in 2021 from $13.50 an hour to $13.69 an hour. The minimum wage for particular cities in Washington may be higher than the state’s minimum wage, so be sure to verify. For example, the city of Seattle’s minimum wage for 2021 is $16.69 per hour for employers with 501 or more employees or employees with 500 or fewer employees if the employer does not contribute at least $1.69 per hour toward the employee’s medical benefits and/or where the employee does not earn at least $1.69 per hours in tips. For employers with 500 or fewer employees that meet the contribution requirement, the 2021 minimum wage is $15.00 per hour. See here for more from Seattle's Office of Labor Standards.
New Salary Thresholds for Overtime Exempt Employers
The minimum wage increase will affect employees exempt from overtime and other protections of the Minimum Wage Act. Effective January 1, 2021, as a result of the minimum wage increase, Washington State’s overtime pay thresholds for executive, administrative, and professional employees will be as follows:
- Small businesses (1-50 employees): An exempt employee must earn a salary of at least 1.5 times the minimum wage, or $821.40 per week ($42,712.80/year).
- Large businesses (51 or more employees): An exempt employee must earn a salary of at least 1.75 times the minimum wage, or $958.30 per week ($49,831.60/year).
Additionally, the minimum wage increase will affect computer professionals who are paid by the hour. The increase will be as follows:
- Small businesses (1-50 employees): An exempt computer professional paid hourly must earn at least 2.75 times the minimum wage, or $37.65 per hour.
- Large businesses (51 or more employees): An exempt computer professional paid hourly must earn at least 3.5 times the minimum wage, or $47.92 per hour.
Computer professionals paid by salary are subject to the same salary thresholds as other professionals. The new state thresholds are higher than the federal threshold ($684/week or $35,568/year). Washington employers will have to adhere to the state thresholds beginning in 2021.
Seattle Payroll Tax
Beginning in 2021, the City of Seattle will be imposing a payroll expense tax on all businesses within Seattle. Payroll expenses are split into three tiers. The payroll expense tax due is calculated using the applicable tier multiplied by a set rate according to each employee’s annual compensation. The tax due for 2021 is due on the same date that the tax payment for the fourth quarter of 2021 is due. Certain businesses are exempt, including for example, any business with payroll expenses of less than $7 million in the most recent calendar year. Additional information can be found here.
Background Checks: Nursing Homes, Assisted Living Facilities, and Early Childhood Educators
Several amendments related to Certificates of Parental Improvement that affect Nursing Homes, Assisted Living Facilities, and Early Childhood Educators will go into effect on January 1 as part of House Bill 1645. Sections 5 and 6 of that bill amend current law to prohibit nursing homes and assisted living facilities from denying employment to care providers where a background check reveals that the individual has a finding of child abuse or neglect in their record, but has since obtained a certificate of parental improvement. Section (3)(1)(b) prohibits the state from denying licensing to an early childhood educator under those circumstances. The text of the bill can be found here.
As part of the phase-in of training and safety requirements, RCW 49.860 (ESHB 1817) requires contractors and subcontractors in Washington refineries and chemical plants to employ 20 percent journey-level workers who have graduated from state-approved apprenticeship programs by 2021. The required percentage increases to require 35 percent to be apprenticeship graduates by 2022, 45 percent by 2023, and 60 percent by 2024. More information can be found here.