The bill establishes temporary salary reductions for state government employees during the 2025-2027 fiscal biennium, specifically reducing base salaries by 4.98% from July 1, 2025, through June 30, 2026. Certain employees, including elected officials and higher education staff, are exempt from this reduction. The Office of Financial Management will create procedures to ensure that salary reductions do not bring any employee's pay below the applicable minimum wage. Employees subject to the reduction will accrue temporary salary reduction leave, which can be utilized according to collective bargaining agreements. The bill also mandates voluntary salary reductions for state elected officials and requires institutions of higher education to achieve compensation reductions as outlined in the omnibus appropriations act.

Additionally, the bill amends various sections of the Revised Code of Washington (RCW) to align with these changes, including provisions related to sick leave compensation and employee benefits. It introduces a new section that includes compensation forgone due to reduced work hours or pay as part of the calculation for certain retirement benefits, contingent upon the reductions being integral to the employer's expenditure reduction efforts. The bill repeals previous restrictions on salary increases for state employees that were in effect from February 18, 2009, through June 30, 2013, allowing for more flexibility in salary adjustments. Overall, the bill aims to manage employee compensation in response to budgetary constraints while ensuring accurate reflection of employees' contributions to retirement benefits.

Statutes affected:
Original Bill: 41.04.820, 43.03.3051, 41.04.340, 43.01.041, 41.06.500, 41.26.162, 41.37.010, 41.40.010, 43.43.120