OLYMPIA - With the state facing a severe downturn in revenue collections, Gov. Jay Inslee today directed state agencies under his authority to cancel a scheduled 3% general wage increase for many of the state’s highest-paid general government employees and to begin furloughs for most state employees.

Most state employees are scheduled to receive the general wage increase July 1 as approved by the Legislature last year. But under Inslee’s directive, cabinet agencies will cancel the pay raise for agency directors, Exempt Management Service and Washington Management Service employees, and all other exempt employees who earn more than $53,000 annually.

“COVID-19 has hit our state hard and our economy has taken a severe hit as a result. These are very difficult decisions but they are necessary to address the financial shortfall that we are facing,” Inslee said. “Every day state employees serve the people of Washington with dedication, and these actions do not reflect on that commitment or quality of their work. In this current financial situation, everyone needs to make sacrifices and we know this will not be easy. I know that our state will come out of these difficult times stronger than ever.”

The canceled pay raise will affect nearly 5,600 general government employees. This includes Exempt Management Service employees, made up mostly of state agency executive and senior-level managers, and Washington Management Service employees, largely mid-level managers across state government.

Other union-represented and non-represented classified employees will still get the general wage increase.

In addition to cancelling pay raises, starting no later than June 28, more than 40,000 state employees will be required to take one furlough day per week through July 25. After July, employees will be required to take one furlough day per month at least through the fall.

Employees will also be allowed to take voluntary unpaid furloughs.

The two actions — cancelling the general wage increase and instituting furloughs through November — together will save the state Near General Fund about $55 million over the next year, according to preliminary estimates. The governor urged other agencies not under his authority — including higher education institutions, the Legislature, courts and separately elected officials — to adopt similar measures. If they do, the state would save another estimated $91 million.

The furlough plan exempts those in critical positions for which the state would have to bring in relief help to cover for a furloughed employee.

“This was a very difficult decision. We know the furloughs will put additional pressure on all employees as they will need to help shoulder additional work and responsibilities in the short-term,” said David Schumacher, director of the state Office of Financial Management. “We also recognize that furloughs and not extending the general wage increase to all employees will cause financial hardship for some state employees.”

The governor is directing agencies to seek an approved plan under the SharedWork program with Employment Security Department to provide some financial support for furloughed employees.

Today’s directive comes on top of earlier actions by the governor and his budget office to begin reducing spending wherever possible in the current two-year budget. Last month, the governor directed cabinet agencies to freeze hiring, personal services contracts and equipment purchases.  Meanwhile, OFM directed agencies to identify options to reduce fiscal year 2021 spending by about 15%.