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New rules proposed to clarify pay issues

This story was published Jan. 10, 2003

By Jeff St. John

Herald staff writer

New state rules are being proposed to determine when employers can and can't dock salaried workers' pay for missing work, helping clarify what observers say has been an unclear legal issue since a 2000 state Supreme Court decision.

The proposed rules from the state Department of Labor and Industries define what qualifies a worker as exempt from overtime and minimum wage laws and give guidelines on docking worker pay.

Business and labor groups say the proposed rules aren't perfect but are better than no rules at all.

"Overall, the rules are pretty decent," said Mark Johnson, assistant state director for the Washington chapter of the National Federation of Independent Business. "And they're certainly better than what we had before, which was a huge question mark."

He's talking about a 2000 state Supreme Court decision in the case of Drinkwitz vs Alliant Techsystems, in which the court found that salaried workers at the company were entitled to back overtime pay because their salaries had been improperly docked for missing work, destroying their exemptions from overtime law.

While previous court decisions had depended on federal law where state law wasn't clear on this issue, the Drinkwitz decision saw the court making its own interpretation on how Alliant had violated the workers' salary status, said Mike Killeen, an employment law attorney with Davis Wright Tremaine in Seattle.

Since then, employers haven't been sure their policies were legal until they were challenged in a court case, he said.

"It's kind of like an insurance policy," Killeen said. "People think they're probably covered, but they don't know the details until an accident happens."

The proposed state rules mostly follow federal law, he said. They would allow deductions from salary for full days or weeks taken off work, from sick leave and disability leave and in other specific situations.

But salary deductions are not allowed for part-day absences, work hours cut back by the employer or for time served in jury duty, service as a court witness or military leave during a week the employee was otherwise working, among other situations.

The proposed rules do differ from federal law in two key ways, said Elaine Fischer, industrial relations specialist for the state Department of Labor and Industries.

The first has to do with a company's "window of correction," to fix mistakes in docking employee pay. The state rules say employers must immediately take steps to fix mistakes, a narrower definition than federal rules, she said.

The other difference is in rules for deducting time from leave banks. The state rules would allow full-day deductions, as well as partial-day deductions but "only on the express or implied request of the employee."

Labor and business groups aren't completely happy with the leave bank provisions. The Washington State Labor Council didn't like the rules on the grounds that salaried employees shouldn't be docked part-day time off from work at all, said spokesman David Groves.

The Department of Labor and Industries should be coming out with revisions to the proposed rules based on public testimony taken at hearings in Spokane, Tukwila and Yakima this week, Fischer said.

The rules could be adopted as soon as the end of the month and go into effect 31 days after that, she said.