One legal requirement that Washington employers need to understand is the difference between exempt and nonexempt employees, also known as classification. This is an important distinction that ensures you are following Washington law and haven’t misclassified your employees, which can often lead to payroll and rest break violations, opening up the employer to costly risk.

No matter the size of your business, it is recommended that you work with a Washington employment lawyer to assess classification laws that apply to your business. At Rocke Law Group, PLLC, our wage and hour attorneys are here to help Washington employers navigate the laws around exempt and nonexempt employees. An experienced human resources professional can help the business with many issues with classification, and an attorney’s eye is helpful on issues of widespread impact and high-risk areas.

Understanding Exempt and Nonexempt Classification in Washington

Washington employers often find the distinction between exempt vs nonexempt employees hard to understand and apply in a practical way. But you must understand what the difference is, as it is very possible that your company employs both exempt and nonexempt employees. With most companies employing both exempt and nonexempt employees, it is essential to identify the nuanced requirements of each classification.

Overview of Washington exempt and nonexempt classifications:

• Exempt employees: These workers must be paid a salary that meets the current salary threshold and pass at least one of the duties tests. They do not typically qualify for overtime pay or mandatory meal and rest breaks.
• Nonexempt employees: These workers must be paid minimum wage and overtime and are entitled to meal and rest breaks.

The complex duties tests, nuances in laws, and high level of risk involved when determining whether an employee is exempt or nonexempt make it strategically smart to hire a local employment attorney. With a deep understanding of the applicable laws and best practices, they can advise you in making sound decisions for your wage and hour compliance efforts.

Common Employee Misclassification Mistakes

Employers can have many misconceptions regarding how they need to classify their employees. So, it isn’t uncommon for Washington employers to oversimplify this, which can lead to a variety of legal issues later on down the road. Misunderstanding the complexity of employee classification regulations can lead to unnecessary legal exposure for Washington employers.

Here are some examples of the most common employee misclassification mistakes that you should watch out for: A few of the most common employee misclassification mistakes made are the following:

• Basing classifications on job titles rather than actual responsibilities;
• Failing to update employee classifications as their duties change over time;
• Assuming that higher-paid or salaried employees are automatically exempt;
• Following federal standards without also applying Washington’s specific laws for employers; and
• Forgetting to periodically review classifications as the rules and requirements change.

Potential Consequences of Employee Misclassification

 Failure to accurately classify an employee can result in a variety of damaging consequences:

• Owing unpaid overtime;
• Owing missed meal and rest breaks;
• Personal liability for wage and hour violations;
• Penalties for documentation, insurance, and benefits errors; and
• Claims of failure to properly provide job-protected leave.

If you are actively facing any of these claims, act quickly to get the help of a Washington employment lawyer. 

How Washington Employers Can Reduce Misclassification Risk

Understanding how Washington classifies exempt vs. nonexempt employees is just part of the battle. From here, you also need to take the necessary steps to prevent misclassifications to maintain compliance even as the laws change.

Ways to reduce the risk of misclassifications in Washington State:

• Internal reviews: Conduct periodic reviews to ensure all exempt and nonexempt employees are classified correctly. Additional reviews should occur when something changes that could impact these classifications, such as a promotion, job title change, or company restructuring.
• Washington law updates: Washington law is subject to change year to year, including the classification requirements. Staying in the loop ensures your practices are up to date. Rocke Law Group hosts a free newsletter for employers which features law changes, implementation guides, and legal resources.
• Train your team: Even if you have a good system in place for classifying employees, there is always a risk of errors occurring. Train your HR team and managers to spot issues and resolve them accurately and efficiently.

Get in Touch With an Employment Lawyer in Washington

To avoid unnecessary legal exposure, you must understand the laws at the level needed to pursue compliant practices. No matter the size of your business, the industry you operate in, or the type of employees you employ, classification noncompliance is a high-level risk worthy of your consideration.

At Rocke Law Group, PLLC, we support Washington employers as they navigate Washington’s overtime laws and exempt vs nonexempt employee requirements. Contact us today at (206) 652-8670 or by filling out our online form.

FAQs

Are all salaried employees exempt from overtime in Washington?

No. Employees who receive a salary do not automatically meet the qualifications of being an exempt employee. They must satisfy a variety of other requirements, including passing a duties test and meeting a minimum salary threshold.

Does calling an employee a manager make them exempt?

An employee will not become exempt simply because you call them a manager. Exemptions are not given based on job titles; they are based on job duties.

Can an employee’s exempt status change over time?

Yes. It is quite common for the status of Washington employees to change due to changes in income, responsibilities, or law updates.

Can misclassification lead to a class action?

If you misclassify employees, it is very possible that you could face a costly and potentially detrimental class action.

How often should employers review exempt classifications?

Periodic reviews are recommended to ensure your employee classifications are up-to-date. You should do additional reviews anytime there is restructuring, changes to the law, or changes to your employee’s compensation or responsibilities.