What’s New for 2020? Washington State Employment Law Updates
By: James P. Sikora and Phillip J. Haberthur
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As we start a new year and decade, Washington employers will encounter several major changes to Washington employment laws. Listed below are some of the key changes for 2020, which we encourage employers to familiarize themselves with in order to take necessary steps to ensure compliance.
1. Washington Paid Family and Medical Leave (PFML)
The second step in implementation of PFML in Washington occurred on January 1, 2020. Eligible employees are entitled to take the following starting on January 1:
Up to 12 weeks of leave for their own serious health condition (medical leave) or for family care (family leave);
Up to 16 weeks of combined family and medical leave; and
Up to 2 additional weeks of leave for certain pregnancy complications.
To assist employers in preparing for employees being eligible to take PFML, we summarize some considerations for employers.
Employers should consider whether or not to allow employees to receive supplemental benefit payments. Although there is no requirement that an employer offer supplemental benefit payments to an employee on PFML, an employer may allow an employee to take such payment in addition to any benefits under PFML. Examples of possible supplemental benefit payments include salary continuation, vacation leave, sick leave, or other paid time off. If an employer chooses to provide supplemental benefits, they cannot require that an employee use the supplemental benefit. The employee has the choice of whether to use the supplemental benefit. Employers who are subject to federal FMLA should be aware that Washington PFML differs from FMLA on this issue. FMLA allows employers to require employees to use available paid time off while taking FMLA leave.
Employers should be mindful of certain notice requirements under PFML. An employer is required to notify employees who may be eligible for PFML within five business days after the later of: (1) an employee’s seventh consecutive day of absence due to family or medical leave; or (2) the employer becomes aware that the employee’s absence is due to family or medical leave. The Employment Security Department has published a “Statement of Employee Rights” for use by employers to provide the required notice.
Employers should also review and update written policies to ensure they are in compliance with PFML. This includes deciding whether or not to make paid time off available to employees as a supplemental benefit. Employers should ensure that the required poster (in the form provided by the Employment Security Department) is placed in a conspicuous location in the workplace.
PFML is a major change in Washington employment law and contains many components. This discussion is not intended to be comprehensive, but rather to highlight a few key issues for employers to consider. If you have specific questions, we encourage you to contact us.
2. Overtime Regulations
Washington significantly overhauled its overtime regulations in 2019, with changes taking effect in July 2020. To be exempt from overtime, employees must be paid on a salary basis and perform certain job duties. Starting on July 1, 2020, the minimum salary threshold needed for an employer to not pay a worker overtime rates increased from $250 a week to $675 a week, which places the new threshold to 1.5 times Washington’s minimum wage (for 2020, employers will be required to meet the updated federal salary threshold of $684).
The minimum salary threshold will continue to increase yearly until 2028, when it will reach a rate of about $1,603 a week, or $83,356 a year. The annual increases in the salary threshold before 2028 for employers with 51 or more employees will be more significant than for smaller employers. You can find an overview of the implementation schedule here.
The new rules also update the job duties requirements for when an employer is exempt from paying an employee overtime. In addition to satisfying the increased salary threshold requirement, employees must perform certain job duties and be broadly defined as executive, administrative, or professional employees; outside sales; or computer professionals. Employers should review the updated job duties requirements to ensure exempt employees continue to satisfy both the salary and job duties requirements of the overtime exemptions.
3. Minimum Wage
Washington’s minimum wage increased to $13.50 per hour beginning on January 1, 2020. Employers with employees in Seattle or SeaTac should be aware of the higher minimum wages that may apply in these local jurisdictions.
4. Noncompetition Covenants
Washington’s noncompetition law dramatically changed on January 1, 2020, when a bill signed into law in early 2019 became effective. The new law declares noncompetition covenants void and unenforceable for an employee earning less than $100,000 per year (as reflected on the employee’s Form W-2, Box 1) or an independent contractor earning less than $250,000 per year. This amount will be annually adjusted for inflation.
All noncompetition covenants must comply with the remaining requirements of the new law. Some of the key requirements are as follows:
An employer must disclose the terms of the noncompetition covenant in writing to the prospective employee “no later than the time of the acceptance of the offer of employment.” If the noncompetition covenant is entered into after the start of employment, the employer must provide independent consideration for the noncompetition covenant to be enforceable.
The new law presumes a noncompetition covenant exceeding 18 months in duration after the end of employment is unreasonable and unenforceable. An employer may rebut this presumption of unreasonableness by providing by “clear and convincing” evidence that a duration longer than 18 months is necessary to protect the employer’s “business or goodwill.”
A noncompetition covenant is not enforceable against an employee who is “terminated as the result of a layoff, unless enforcement . . . includes compensation equivalent to the employee’s base salary at the time of termination for the period of enforcement” minus any compensation earned by the employee in subsequent employment.
In the event a noncompetition covenant is found to violate the new law, the employer seeking enforcement of it must pay a statutory penalty and attorneys’ fees to the employee. This applies to all enforcement proceedings commenced on or after January 1, 2020, regardless of when the noncompetition covenant was entered into. An employee may not bring a claim for the statutory penalty and attorneys’ fees regarding a noncompetition covenant signed before January 1, 2020, if the noncompetition covenant is not being enforced.
The new law clarifies that the following are not considered noncompetition covenants for purposes of these new restrictions: a nonsolicitation agreement; a confidentiality agreement; a covenant prohibiting the use or disclosure of trade secrets or inventions; a covenant entered into by a person purchasing or selling the goodwill of a business or otherwise acquiring or disposing of an ownership interest; or certain covenants entered into by a franchisee in the context of a franchise sale in accordance with RCW 19.100.020(1).
For more information, contact attorney James P. Sikora at james.sikora@landerholm.com or Phillip J. Haberthur at philh@landerholm.com.
The above should not be construed as specific legal advice and is intended for general information purposes only.