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In response to questions presented during the rulemaking process, the Washington State Department of Labor and Industries indicated that under its interpretation, employers may not pay wages in lieu of sick leave benefits (often referred to as "Premium Pay Programs") to meet the state requirements for the paid sick leave law which goes into effect January 1, 2018. Specifically, Labor and Industries indicated that "an employer who provides any payment in lieu of the employee accruing paid sick leave would be in direct conflict with the (State) statute."
Washington State Initiative 1433 was passed by voters in November 2016, setting statewide standards for minimum wage and paid sick leave. The Department of Labor & Industries recently finalized the formal rules providing guidance on I-1433. These rules (published as the “CR-103” document linked below) create and amends sections of the Washington Administrative Code (WAC) related to Statewide paid sick leave. The state provided additional direction in a “Concise Explanatory Statement” on the rules.
Excerpt from the State of Washington’s CR-103 Concise Explanatory Statement regarding Premium Pay:
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