New and Changing Laws on the Horizon As Washington Employers Prepare for 2024

The holiday season is in full swing, and HR professionals know that means it's crunch time to wrap up any necessary end-of-year tasks and prepare for new and changing employment laws. For Washington employers, 2024 brings a few notable changes that require immediate HR action to remain compliant: 

• Minimum Wage Increase. The Washington minimum wage for non-exempt employees will increase from $15.74 to $16.28/hour. The City of Seattle has a higher minimum wage that is based on a tiered structure. In 2024, all large Seattle employers (501 or more employees) must pay employees at least $19.97/hour. Small employers (500 or fewer employees) that do not pay at least $2.72/hour in medical benefits or where employees earn less than that amount in tips must also follow the $19.97/hour minimum wage. Small employers that do pay at least $2.72/hour in medical benefits or where employees earn more than that amount in tips are subject to a $17.25/hour minimum wage.
  
  
  • Next Steps for Employers: Employers should audit their hourly employees’ pay in their HR Information System (HRIS) or payroll system to ensure all rates are above the new minimum wage. 
    
    
• Salary Threshold Increase. Washington’s salary threshold for exempt employees will increase to $1,302.40 per week or $67,724.80 annually. This threshold represents a significant increase over 2023's amount of $57,293.60 for small employers and $65,478.40 for large employers. Exempt computer professionals may continue to be paid an hourly rate rather than a salary; for 2024, that minimum hourly rate is $56.98.
  
  
  • Next Steps for Employers: Employers that cannot increase an exempt employee’s pay to stay above the minimum salary threshold must reclassify the employee as non-exempt. There are many important factors to consider when preparing for such a transition, including payroll and benefits implications and employee morale. Archbright members have access to a Keynote that provides a detailed overview of the process. 
    
    
• Workers' Compensation Rate Increase. Workers' compensation insurance rates for state-fund employers in Washington will increase by an average of 4.9% in 2024. The Washington State Department of Labor & Industries (L&I) states that the insurance increase, which goes into effect on January 1, will cost employers and workers jointly an additional $65 a year on average for each full-time employee.  
  
  
  • Next Steps for Employers: Employers typically receive their updated rate notice by mid-December. As soon as notices are received, employers should update payroll deductions before the first pay period in January. Employers will also be able to find their updated rates in their portal account in L&I's Claim & Account Center, accessible in the employer’s Secure Access Washington (SAW) account.  
    
    
• Drug Testing Changes. Starting January 1, Washington employers will be prohibited from basing hiring decisions on drug test results showing non-psychoactive cannabis metabolites. Employers can still conduct drug testing if the tests screen for psychoactive cannabis metabolites (those that create a “high”) or in other instances aside from pre-employment, such as post-accident or reasonable suspicion. Occupations requiring federal background checks or security clearance are exempt from the law. Also, the new law doesn’t apply to positions within law enforcement, fire department or fire protection services, first responders, airline or aerospace industries, corrections officers, or safety-sensitive jobs where working while impaired “presents a substantial risk of death.”  
  
  
  • Next Steps for Employers: Employers that conduct pre-employment testing should confirm that their drug screening vendor is prepared to comply with the new law by January 1. If the testing vendor cannot offer the correct test, employers may need to cease pre-employment testing for marijuana (unless the position is not subject to the law). Employers should also identify which jobs they consider “safety-sensitive,” and thus would be subject to pre-employment testing, and include that information in job postings. 
    
    
• Prohibition on Searching Employee Vehicles. Since July 23, 2023, Washington employers have been prohibited from searching employees’ private vehicles on employer property. Exceptions to this fairly new law include employer-owned vehicles and vehicles used for work purposes, police searches, when the search is necessary to prevent an immediate threat, and if an employee consents to search. 
  
  
  • Next Steps for Employers: Employers should revise their Workplace Searches policy if it references the employer’s right to search an employee’s personal vehicle parked on employer property. Archbright members have access to a sample policy compliant with the new law. 
    
    
• Paid Family and Medical Leave (PFML) Rate Decrease. For the first time since the program’s inception, the WPFML premium rate is decreasing in 2024 from 0.8% to 0.74%. In addition to the rate decrease, the employer/employee split of the premium is changing slightly. Employers will be responsible for 28.57% of the total premium (27.24% in 2023), and the employee’s share will be 71.43% (72.76% in 2023).  
  
  
  • Next Steps for Employers: Employers should notify employees of the changing rate and the impact on their take-home pay. They should also prepare to start deducting the new rate from employee pay on January 1 and get ready to remit the premiums to the Employment Security Department in April 2024. Next year’s required posters and paycheck inserts are available on the PFML website at Paidleave.wa.gov. 
    
    
• Employers Included as an “Interested Party” for PFML Claims. Effective January 1, 2024, Senate Bill 5586 will enable an employer to access PFML claim information about current employees, including the type of leave being taken, the requested duration of leave, the approved dates, and whether the employee was approved for benefits and paid for any given week. 
  
  
  • Next Steps for Employers: The Employment Security Department has stated that the information will be available as a new tab in each employer’s portal account, accessible through Secure Access Washington (SAW), where employers currently file PFML quarterly reports and pay premiums. 
    
    
• Sick Leave Payout for Construction Workers. Effective January 1, 2024, Senate Bill 5111 will require that all construction workers covered under the North American Industry Classification System (NAICS) industry code 23 (excluding residential building construction) who terminate employment within 90 days be paid for their accrued, unused Washington-state protected sick leave. 
  
  
  • Next Steps for Employers: Employers with short-term, non-residential construction employees must prepare to cash out sick leave upon the employee’s exit. If the employee is rehired within 12 months, the employer will not be required to reinstate the employee’s sick leave balance.