Washington House Bill 1184, introduced in the 2025 legislative session, proposes a specific exemption from overtime pay requirements for certain small businesses and nonprofit organizations. The bill aims to adjust the overtime-exempt salary threshold to 1.5 times the state minimum wage for these entities, which is approximately 25% lower than the current threshold.
Impact on Small Businesses For small businesses with fewer than 50 employees, this adjustment would provide greater financial flexibility. By lowering the salary threshold required for employees to be exempt from overtime pay, these businesses may find it more manageable to classify certain employees as exempt, thereby reducing overtime expenses. This change is intended to help small businesses maintain operations without the added financial strain of higher overtime costs. Implications for Nonprofit Organizations Nonprofit organizations, particularly those with fewer than 50 employees, would similarly benefit from the reduced overtime-exempt salary threshold. The adjustment acknowledges the unique financial constraints of nonprofits, allowing them to allocate resources more effectively toward their missions. By easing the overtime requirements, nonprofits can better manage staffing costs while continuing to serve their communities. Legislative Status As of January 16, 2025, HB 1184 has been prefiled and referred to the House Committee on Labor & Workplace Standards. A public hearing was held on January 15, 2025, to discuss the bill's provisions and gather input from stakeholders. In summary, HB 1184 seeks to create a narrow exemption from existing overtime provisions by lowering the salary threshold for overtime-exempt employees in small businesses and nonprofits. This legislative change aims to provide these organizations with increased financial flexibility, enabling them to manage labor costs more effectively while continuing to contribute to Washington State's economy and communities.
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