With the new year upon us, the below provides an update on what to expect in 2023 for Washington employers.
Wage Transparency
Effective January 1, 2023, certain Washington employers must provide updated wage disclosure information in all job postings. [1] Washington employers include businesses with at least one Washington-based employee and 15 or more employees. Washington employers also include businesses without a physical presence in Washington State but who engage in business in Washington or recruit for jobs that could be filled by a Washington-based employee. If the position to be filled is entirely out of state (e.g., wait staff in Idaho) but the posting may reach Washington-based applicants, the posting requirements do not apply. This "out-of-state" exception must be narrowly applied.
Going forward, covered employers must disclose the following information in job postings: (1) the wage scale or salary range for the position and (2) a general description of all of the benefits and other compensation to be offered to the hired applicant (e.g., healthcare benefits, retirement plans, vacation). For employees offered an internal transfer or promotion, wage scale or salary range must be provided upon request.
Individuals can file complaints with the Department of Labor & Industries ("L&I") or initiate a lawsuit if they believe an employer violated this provision. If a violation is found, the individual can recover actual damages, double statutory damages, or $5000, whichever is greater; interest at 1% per month; and their attorney's fees and costs. In addition, L&I can order payment of civil penalties. Penalties range from $500 to $1000 or 10% of damages. Finally, individuals and L&I can recover wages and interest for four years before the last violation.
Additional guidance from L&I can be found here and here.
Minimum Wage Increase
Beginning in 2023, the minimum wage will increase statewide and in several notable cities.
Statewide minimum wage increase
Washington’s minimum wage will go up $1.25 per hour to $15.74 effective on January 1, 2023. This is an 8.66% increase from 2022. The state minimum wage applies to workers 16 years and older. Employers can pay 85% of the minimum wage to workers ages 14-15, which is $13.38 in 2023.[2]
Seattle minimum wage increase
The city of Seattle’s minimum wage for 2023 is $18.69 per hour for employers with 501 or more employees or employees with 500 or fewer employees if the employer does not contribute at least $2.19 per hour toward the employee’s medical benefits and/or where the employee does not earn at least $2.19 per hours in tips.[3] For employers with 500 or fewer employees that meet the contribution requirement, the 2023 minimum wage is $16.50 per hour.[4]
SeaTac minimum wage increase
The City of SeaTac also increased minimum wage for 2023. Starting January 1, 2023, the minimum wage for hospitality and transportation employees within the City will increase to $19.06.[5]
New Salary Thresholds for Overtime Exempt Employees
Washington State
On January 23, 2023, Washington’s threshold for employees exempt from the Minimum Wage Act will increase as a result of the minimum wage increases.[6] The exact threshold depends on the employer’s size:
- For employers with 1-50 employees, the threshold salary level will be 1.75 times the state minimum wage. This means an employee exempt from overtime pay must earn at least $1,101.80 a week or $57,293.60 a year.
- For large businesses, meaning those with 51 or more employees, an exempt employee must earn a salary of at least two times the state minimum wage, which is $1,259.20 a week or $65,478.40 a year.
These rules also apply to computer professionals, who must be paid an hourly rate rather than a salary. Computer professionals are exempt if they earn at least 3.5 times the state minimum wage, which increases to $55.09 an hour effective January 1, 2023 as a result of the higher minimum wage.[7]
Federal Rules
The Washington threshold for exempt employees is currently higher than the federal threshold. The federal threshold set in 2019 is $684/week or $35,568/year. The United States Department of Labor was expected to issue a new exemption threshold in October 2022,[8] but missed its deadline to do so.
Seattle Reproductive Rights
In the wake of the Supreme Court’s decision in Dobbs v. Jackson Women's Health Organization, the Seattle City Council passed legislation to protect people seeking reproductive healthcare. Among other legislation, Seattle enacted:
- CB 120374, adds people who have received or are seeking abortions as a protected class, ensuring their civil rights protections.[9]
- CB 120375, establishes Seattle as a sanctuary city for those seeking abortion care and prevents pursuit of out-of-state warrants related to abortions by Seattle Police.[10]
- CB 120376, creates a misdemeanor charge for people who encroach on individuals seeking abortions or gender affirming care.[11]
Expand Fairness Act, Washington Regulation of Transportation Network Companies[12]
Effective December 31, 2022, transportation network companies ("TNC"), like Uber and Lyft, will have to comply with new regulations in Washington.
- Compensation: A TNC must ensure that a driver's total compensation meets the following requirements:
- For trips originating in cities with a population of more than 600,000 and for time and miles on trips driven in cities with a population of more than 600,000, the greater of (a) 59 cents per passenger platform minute and $1.38 per passenger platform mile; or (b) a minimum of $5.17 per dispatched trip.
- For all other trips, the greater of: (a) 34 cents per passenger platform minute and $1.17 per passenger platform mile; or (b) a minimum of $3 per dispatched trip.
- Notices: TNCs must provide the following notices to drivers and riders:
- Notices to drivers about their rights, including the right to a guaranteed per minute, per mile, and per trip rate and the right to be protected from retaliation;
- per trip receipts and weekly statements to drivers containing specific information about each trip; and
- per trip receipts to riders containing specific information.
- Paid Sick Time: TNCs must provide drivers 1 hour of paid sick time for every 40 hours of passenger platform time worked. Drivers can accrue paid sick time after recording 90 hours of passenger platform time on the TNCs platform, carry over up to 40 hours of unused paid sick time to the following year, and use sick time in increments of 4 hours or more.
- Industrial Insurance: L&I will assess workers' compensation coverage premiums to TNCs beginning January 1, 2023.
Enforcement: L&I will investigate complaints for compensation, paid sick time, retaliation violations, imposing civil penalties, and for parties to appeal.
Washington CARES Act Implementation
After postponing the implementation, Washington will begin to enforce the long-awaited Washington Cares Act on July 1, 2023. The Washington Cares Act creates a mandatory, state-run, long-term-care insurance program. While the Act was initially set to go into effect in 2022, flaws in the program led to an 18-month delay.
Beginning on July 1, 2023, employers must start collecting, remitting, and reporting premiums for employees who have yet to opt out of the Washington Cares program.[13]
Minimum Wage for Agricultural Workers
Beginning January 1, 2023, non-dairy agricultural workers will be subject to a 48-hour work week. Employees working more than 48 hours per week will be entitled to one and one-half times their regular rate of pay.[14]
The weekly threshold will decrease again in 2024 to 40 hours per week. This law does not apply to dairy workers. Dairy workers are entitled to overtime for any work above 40 hours in a work week.
Non-compete Agreements
In 2023, there will be another increase in the threshold for enforceable non-compete agreements in Washington. Non-compete agreements are void against employees and independent contractors whose annual salaries earned are less than $116,593.18 and $291,482.95, respectively, in 2023.[15]