2018 CHANGES TO WASHINGTON LEAVE LAWS

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Godfrey Williams
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Supports the success of nonprofits in WA State by providing Management, HR and Technology

coaching, training Encore program Free information and referral services by phone and online at

org 2018 CHANGES TO WASHINGTON LEAVE LAWS NANCY KASMAR, SPHR, CCP, SHRM-SCP 501 COMMONS WEBINAR

1 Supports the success of nonprofits in WA State by providing Management, HR and Technology consulting Contracted HR, Finance and Technology support services Leadership development and coaching, training Encore program Free information and referral services by phone and online at CHANGES TO WASHINGTON LEAVE LAWS NANCY KASMAR, SPHR, CCP, SHRM-SCP 501 COMMONS WEBINAR NOVEMBER 1, 2017 Discussion Topics 2018 Minimum Wage Paid Family and Medical Leave (PFML) Communicating These Changes 2016 Compensation Connections, LLC 3 Compensation Connections 1

2 4 As of January 1, 2018: Applies to all employers in Washington State Must accrue 1 hour for every 40 hours worked Overtime hours are included in hours worked No cap on annual accrual or use Must allow carryover of up to 40 hours sick leave No requirement to cash out unused hours 5 Also of Note: Legal requirement is for non-exempt employees Local sick and safe laws take precedence Employees must be allowed to use accrued leave on the 90th calendar day after the start of employment Rehires with 12 months: must reinstate accrued leave You may be more generous with accrual / carryover 6 Compensation Connections 2

3 And Yet More: All employers no matter what size Must comply, even if not currently offering sick leave Existing laws: Seattle: already compliant (all tiers) Spokane: replaced by Tacoma: removes accrual cap 7 To Do List: Set up payroll system for accrual beginning 1/1/2018 You may frontload paid sick leave May allow cash out in excess of 40 hours unused leave May not pay premium pay in lieu of leave 8 More To Do s: Become familiar with law Thorough policy review Assess compliance Update policies Communicate to all employees by 3/1/ Compensation Connections 3

4 2017 Washington Minimum Wage 10/30/17 Washington Minimum Wage 10 Washington Minimum Wage 11 Washington Minimum Wage Washington Minimum Wage Current = $11.00 January 1, 2018 = $11.50 January 1, 2019 = $12.00 January 1, 2020 = $13.50 Compensation Connections 12 4

5 Sharpen Your Pencils! ü Create a list of your employees currently paid under $11.50 / hour ü Calculate the cost to raise pay for those affected to $11.50 / hour ü Anyone else? 13 Example Calculations 2017 Per Employee Cost to Comply Current Hourly Pay $11.00 $11.25 $11.50 Weekly Hours Annualized Pay $22,880 $23,400 $23,920 Annualized $11.50 / hour $23,920 $23,920 $23,920 Impact on 2018 Salary Budget $1,040 $520 $0 The combined total for all employees is the increase to your pay budget for Pay Compression Issues Legal change in pay is not related to the job Tenure not a factor in this increase Performance not a factor in this increase Pay and internal job value no longer aligned 15 Compensation Connections 5

6 Hourly Wage Options 1. Only required increases to $11.50/hour 2. Add $0.50/hour for all non-exempt employees 3. $11 = add $0.50; $ $12/hour = add $0.25; $12/hour or higher = no change 4. $11 - $12.75/hour = add $0.50/hour; $13 - $14 = add $0.25/hour; >$14/hour = same 16 Pay Range Issues Your lower pay grade minimums may be less than $11.50/hour Pay range compression: if you adjust pay grade #1, do you adjust pay grade #2, etc.? 17 Pay Range Options 1. Adjust only the minimum of your lower pay ranges; leave midpoint and maximum the same 2. Adjust the minimum, midpoint, and maximum of your lower pay ranges 3. Collapse your lower grades into one range, with a $11.50 minimum and usual range width 4. Revise your entire non-exempt pay structure 18 Compensation Connections 6

Preparation ü Calculate potential cost ü Get executive buy-in for any changes to pay ranges and pay compression adjustments ü Identify stakeholders ü Meet with

7 Preparation ü Calculate potential cost ü Get executive buy-in for any changes to pay ranges and pay compression adjustments ü Identify stakeholders ü Meet with managers / answer questions ü Notify employees / answer questions 19 Paid Family and Medical Leave 20 Paid Family and Medical Leave 21 Compensation Connections 7

8 Paid Family and Medical Leave Both employers and employees pay premiums All employers covered* Must have worked at least 820 hours to be eligible Benefit is 12 weeks paid time off Benefit calculated as a percentage of employee pay Payroll deductions begin January 1, 2019 Benefits available to employees on January 1, Communicating Changes 23 Communicating Changes ü Start with WHY ü Explain HOW the law affects them ü Talk about WHAT the changes entail ü WIIFM 24 Compensation Connections 8

Resources L&I Paid Sick Leave: http://www.lni.wa.gov/workplacerights/leavebenefits/vacaysick/paidsickleave.

engagementhq.com/paidsickleavesamplepolicies 25 QUESTIONS? COMMENTS?

9 Resources L&I Paid Sick Leave: L&I Webinars: Draft Policies: 25 QUESTIONS? COMMENTS? Nancy Kasmar, MS, SPHR, SHRM-SCP, CCP Principal, Compensation Connections 26 Compensation Connections 9

Paid Sick Leave January 1, 2018 Disclaimer

Paid Sick Leave January 1, 2018 Disclaimer The intention of this presentation is to help provide the public with guidance on the application of the Washington State Paid Sick Leave law, taking effect January 1, 2018. This presentation is strictly