Understanding FLSA classification & Washington minimum wage act (WMWA)

Colleen Malmassari
Founder of Back40 Advisors LLC

Understanding the Fair Labor Standards Act (FLSA) and Washington's Minimum Wage Act (WMWA) is crucial for both employers and employees. The FLSA sets national standards for minimum wage, overtime pay, recordkeeping, and youth employment standards. While these federal regulations establish a baseline, individual states can introduce additional standards. Did you know that Washington State has higher standards than the FLSA and requires duties tests to determine classification? 

What is FLSA classification?

All positions within the USA default to an hourly pay structure, which is referred to as “non-exempt” as those positions are subject to the FLSA rules. Non-exempt employees are entitled to minimum wage and overtime pay - 1.5 times their regular rates for hours worked beyond 40 in a workweek. The FLSA allows positions to be exempt from the FLSA rules if the position passes three (3) tests:  job duties, paid a salary or fee, and pay is above the salary threshold. Employees in an exempt position are generally not entitled to overtime pay. Exempt positions usually fall into one of the following categories: executive, administrative, professional, outside sales, and computer professionals. 

Washington State differences

While adhering to the Fair Labor Standards Act (FLSA), Washington has specific distinctions that may influence employee classification. First, the state’s minimum salary requirements for exempt employees are higher than the federal threshold. For small employers with 1 to 50 employees, the 2025 weekly salary threshold is $1,332.80, which equates to an annual salary threshold of $69,305.60. Conversely, large employers with 51 or more employees face a higher weekly threshold of $1,499.40, resulting in an annual salary threshold of $77,968.80. In comparison, the federal minimum salary is set at $684 per week, or approximately $35,568 annually. It is important to note that computer professionals have a different salary threshold amount. In Washington, the salary threshold is applied to total compensation rather than just base pay. Additionally, to qualify for the exemption, salaried employees must meet two additional tests: the salary basis test and the job duties test, which only considers the position duties actually performed. It’s important to note that different categories, such as executive, administrative, professional, and computer professionals, each have their own specific duties analysis for exemption criteria.

Moreover, certain professions in Washington, such as retail and specific healthcare positions, have established particular exemptions and varying rules. These nuances require employers in these sectors to remain vigilant and monitor any state-level changes that may impact their compliance.

Looking ahead

Understanding FLSA classification, particularly within the context of Washington state, is vital for compliance and employee rights. Washington State threshold amounts adjust annually with a projected annual threshold of $93,340.00 for both small and large employers by January 1, 2028. Employers should regularly evaluate employee job descriptions, duties, and salary levels, and remain updated on both federal and state standards. Where differences exist between Washington State and federal overtime rules, the employer must follow the rule that is most favorable to the worker. 

Intro to Back40 advisors: 

At Back40 Advisors, we are dedicated to helping organizations optimize their people strategies and back-office operations. With dual expertise in accounting and HR leadership, we are able to approach organizational challenges with a holistic perspective, understanding both the human capital and financial implications of strategic decisions. As HR Consultants, our goal is to continue this trajectory, innovating in the HR space and driving strategic growth that aligns with the evolving needs of the workplace. See more at www.back40advisors.com. 

Colleen Malmassari, a Society for Human Resource Management-Certified Professional, Professional in Human Resources, is the founder of Back40 Advisors LLC