Monday, December 12, 2016

The Minimum Wage in Washington Will Increase to $11 An Hour Starting on Jan. 1, 2017

Tumwater – The minimum wage in Washington will increase to $11 an hour starting on Jan. 1, 2017. Since the recent election, the Department of Labor & Industries has received scores of calls asking for clarity on the details of the new law.
The new minimum wage, a result of the passage of Initiative 1433, applies to all jobs, including those in agriculture. Workers under 16 years old can be paid 85 percent of the adult minimum wage, or $9.35 per hour, in 2017. In addition to minimum wage, the initiative addresses paid sick leave.
Seattle, Tacoma, and the City of SeaTac have higher minimum wage rates for 2017. For employers in those areas, the local minimum wage rate will apply as long as it is higher than the state minimum.
The new law does not change minimum wage exemptions or regulations regarding overtime pay.
Since 1998, L&I has been responsible for calculating the state’s minimum wage each September. Under Initiative 1433, the minimum wage will increase to $13.50 by 2020. L&I will resume calculating the minimum wage for calendar years 2021 and beyond.

Monday, December 5, 2016

U.S. Nonfarm Payrolls Rose 178,000 in November; Unemployment Rate Falls to 4.6%

WASHINGTON—U.S. employers hired at a steady clip in November while the unemployment rate fell to the lowest level in nine years, signs of enduring labor-market growth that will likely leave Federal Reserve officials on track to raise interest rates later this month.

Nonfarm payrolls rose by a seasonally adjusted 178,000 in November from the prior month, the Labor Department said Friday. The unemployment rate dropped to 4.6% last month, the lowest level since August 2007 as some people found jobs while even more dropped out of the workforce.
Economists surveyed by The Wall Street Journal had expected 180,000 new jobs and a jobless rate of 4.9% in November. “This jobs report paves the way for Fed rate hikes,” said Jason Schenker, president of Prestige Economics. “It also tops off a recent run of continually positive economic data.”

The U.S. labor market has been a bright spot through a long recovery marked by sluggish growth. But Friday’s report highlighted some underlying economic crosscurrents that have lifted the prospects of many Americans while creating new setbacks for others.

The unemployment rate, for example, fell partly because more people found jobs. But more than 400,000 Americans dropped out of the labor force last month, likely a reflection of an aging population as well as some younger workers either giving up, going to school or staying home to care for dependents.

The labor-force participation rate, those with jobs or actively seeking work, edged down to 62.7% in November from 62.8% the prior month and continues to hover near a four-decade low. The rate for prime-age workers, those 25 to 54 years old, slipped to 81.4% from 81.6% in October.Wage gains, meanwhile, are outpacing inflation but stumbled last month.

Average hourly earnings for private-sector workers declined 3 cents from October, or 0.1%, to $25.89 in November. Earnings were up 2.5% from a year earlier, a small step down from October’s 2.8%, which was the strongest annual wage growth since June 2009.

A broad measure of unemployment and underemployment, which includes those who have stopped looking and those in part-time jobs who want full-time positions, was 9.3% in November, down from 9.5% the prior month and the lowest level since April 2008. The rate averaged 8.3% in the two years before the recession.

The mix of job creation has been heavily weighted toward the service sector, with professional and business services—everything from computer-systems design to temp workers—adding 571,000 jobs and health care 407,000 over the past year. Manufacturers have shed 54,000 jobs and miners 87,300 in the last year. Among traditionally blue-collar professions, construction has been perhaps the strongest with 155,000 new jobs in the last 12 months.

 “The November report is a puzzling mix of surprising developments,” said Stephen Stanley, chief economist at Amherst Pierpont Securities.
Friday’s employment report was the last to be released before the Fed’s Dec. 13-14 meeting. Policy makers are expected to raise the central bank’s benchmark interest rate for only the second time in a decade.

Fed officials last raised the rate in December 2015 and before that in June 2006. But with the labor market nearing full employment and inflation showing signs of firming, another quarter-point move appears likely.

“In my view, the case for an increase in the federal-funds rate has clearly strengthened since our previous meeting” on Nov. 1-2, Fed governor Jerome Powell said earlier this week. A slowdown in hiring, meanwhile, wouldn’t be unexpected for a labor market nearing full employment—when there is a rough match between people who want a job and employers who need a worker.

Job gains have averaged 180,000 a month so far this year, down from 225,000 during the same 11-month stretch in 2015.

Fed Chairwoman Janet Yellen a year ago said the economy needs to add “under 100,000 jobs per month” to absorb new entrants into the labor force and adding about 200,000 would be enough to draw workers off the sidelines.

The latest jobs report also comes on the heels of the Nov. 8 presidential election. The tight race generated some uncertainty for businesses and households, but didn’t appear to significantly affect hiring plans.

The surveys of businesses and households that are used to create the jobs report included periods before and after Election Day. Republicans, led by Donald Trump, won the White House and both chambers of Congress.

Monday, October 31, 2016

Shopping For Health Insurance

Open enrollment season is a crucial time of year for anyone shopping for health coverage. Whether you’re signing up for coverage on the federal or state Marketplace or through Medicare or employee benefits, most open enrollment periods begin in the fall.
Now is your chance to make changes to your coverage for 2017. If you miss this year’s open enrollment period, you will have to wait another year to alter your plan unless you have a major life event (marriage, a child, etc.).

Here are some tips to keep in mind as you review your health coverage this year:

1. Know your deadlines

Medicare: Open enrollment for 2017 coverage is between Oct. 15 and Dec. 7. Find more information here.
Obamacare: Open enrollment begins Nov. 1 and ends Jan. 31. However, you must sign up for benefits by Dec. 15 if you want your coverage to begin Jan. 1, 2017. Sign up for deadline reminders here.
Employee benefits: This will depend on your employer. Many employers schedule open enrollment in the fall. By now, you should have received a notification from your human resources department with information on how to enroll.

2. Don't get complacent

You might love the benefits you have at the moment, but that doesn’t mean you should blindly sign up for the same plan next year. Insurers are constantly tweaking existing coverage areas and creating new plans. Check to see if your existing plan has changed and see if there are new plans.

3. Lower your out-of-pocket expenses with a Flexible Spending Account

Americans are paying the highest out-of-pocket health care expenses in history, due to a shift toward high-deductible plans. You can lower your out-of-pocket expenses by setting aside pretax dollars in a Flexible Spending Account. FSAs are only available to workers whose employer provides them.
FSAs can be used only for certain medical expenses, such as co-pays, prescriptions, and some over-the-counter medications. The maximum contribution is $2,550 for 2016.

4. Take advantage of a Health Savings Account if you have a high-deductible health plan

Like an FSA, you contribute pretax dollars to a Health Savings Account (HSA) to cover your medical expenses. However, HSAs are not tied to any one employer, which means they are portable. Your money will come with you from one job to the next, and you won’t be limited on where you can use it. You can also make changes anytime throughout the year. In order to qualify for an HSA in 2017, your health plan deductible must be higher than $1,300 for an individual and $2,600 for a family.

5. Learn from last year's mistakes

This is your chance to find a plan that fits your budget and your needs. Insurance companies change coverage rates and options frequently, so take the opportunity to do your research and flesh out all of your options this enrollment season. If you went for a low-premium, high-deductible plan this year, you might have realized you don’t really like paying higher out-of-pocket expenses all that much. Similarly, if you’ve paid for a high-premium, low-deductible plan but don’t use your health insurance that much, you may join the ranks of the growing number of Americans who have switched over to high-deductible health care plans over the past few years.

6. Check to see if you qualify for a tax credit

Like 84% of Obamacare consumers, you might be eligible for a tax credit that would lower your monthly premium. The average subsidy in 2016 was $290/month. If your estimated household income is up to four times the federal poverty level, then you’d qualify for the credit. You can check here to see if you qualify for a subsidy.

7. If you decide to forego insurance, know what to expect

Under the Affordable Care Act, every American has to have qualifying health insurance coverage, or pay a tax penalty. For 2016, the penalty is $695 for each uninsured adult in the household. However, there are a few exceptions. You might qualify for an exemption from the penalties under certain circumstances. For example, you won't face a penalty if you suddenly lose a job or you are in between jobs for 1 or 2 months and have a gap in coverage. You should check to see if any exemptions apply to you before skipping out on signing up this enrollment season.

Monday, October 24, 2016

New overtime rules to impact 3,800 Clark County, Washington workers

Salaried workers making less than $47,476 will be eligible for overtime pay as of Dec. 1

A new rule revising which salaried employees are paid for clocking extra hours will go into effect soon, impacting about 3,800 Clark County employees and their bosses, according to the Washington Employment Security Department.
The U.S. Department of Labor decided in May to change the so-called “white collar exemption,” an earnings threshold under which employers must pay an employee overtime wages. The ruling makes salaried employees who earn up to $47,476 eligible for overtime pay. Previously, employees who earned more than $23,600 were exempted.
The ruling goes into effect Dec. 1. It will apply to an estimated 4.2 million workers nationwide and 76,000 workers in Washington State.
Scott Bailey, a regional economist with the state agency, said he expects employers will make the change without making waves.
“The new overtime rule by the Department of Labor, in my opinion, will not have a large impact on employment in Clark County,” Bailey wrote in an email Wednesday afternoon. “There may be some wage effects and some creative responses by employers, but I doubt it will result in changes that will be noticeable in our employment statistics.”
In the meantime, the new rule may require some accounting gymnastics of affected employers. They will have to calculate whether a salaried employee making less than $47,476 is worth paying up to that threshold or if it’s worth paying them time-and-a-half when they log more than 40 hours per week. Some businesses might reshuffle responsibilities to other employees in order to shave hours.
“They’re definitely going to want to do the math and look at it both ways: project how much overtime (an employee) would work and what that would cost, versus raising their salary to the new level,” said Rhonda Stephens, a partner at the local offices of Barrett Business Services Inc., a company that consults on human resources and payroll for numerous companies.
According to Stephens, the retail, hospitality and restaurant industries are particularly vulnerable to complications with the new rule. Employers may cut some benefits to offset wage raises, she said; and that increasing pay to relieve overtime pay opens the door for “inequities.”
“They have to look at the bigger picture,” she said.
The department said it made the update to reflect gains in wages since overtime standards were set in 1975 at $23,600. That annual threshold is well below the median income for both men and women in the United States, according to the latest income data from the U.S. Census Bureau.
The new $47,476 per year standard is based on the 40th percentile for earnings in the lowest-wage Census region, which is currently the South.
Bailey said he expected to see local workers receive a pay bump with the ruling, though not a big enough impact to affect employment on a large scale. The average annual wage in Clark County, covering all industries, is $46,693 or $898 per week, but that figure accounts for all jobs, not just full-time salaried workers that this ruling affects.
“Many industries employ large, part-time and seasonal workforces, which would not be covered by the ruling,” Bailey wrote. “Indeed, there is a great deal of variation captured in this estimate. Knowing what the average compensation is helps us with one piece. But what about the variation within that estimate?”
Not everyone was happy with the ruling. Two lawsuits filed in September, one on behalf of 21 states and the other from the U.S. Chamber of Commerce and 50 business groups, argued the decision was an overreach by the federal government.
“This rule, pushed by distant bureaucrats in D.C., tramples on state and local government budgets, forcing states to shift money from other important programs to balance their budgets, including programs intended to protect the very families that purportedly benefit from such federal overreach,” Nevada Attorney General Adam Lexalt said at the time.
Neither Washington nor Oregon are party to the states-led lawsuit.