January 1 Wage Changes: Washington State Employers

Washington’s minimum wage goes up again on January 1. L&I announced the state rate will rise 3.5% to $17.73 an hour, up from the current $17.13. Most of our members already pay well above that, so the hourly rate itself probably isn’t the headline for you. The bigger deal is what it does to the overtime exemption threshold.

Why it matters

In Washington, the salary an employee needs to be exempt from overtime is tied to the state minimum wage. Employees generally have to meet both the salary threshold and the duties test to qualify as exempt — so even someone with a manager title has to be paid at least the threshold, or they’re owed overtime.

The 2027 numbers

• 51 or more employees: The multiplier jumps from 2.25 to 2.5 times minimum wage. Exempt executive, administrative, and professional staff need to earn at least $1,773 a week ($92,196 a year). The current threshold is $1,541 a week, or $80,168 a year — so that’s roughly a $12,000 jump.
• 50 or fewer employees: The multiplier stays at 2.25, so exempt employees need at least $1,595 a week ($82,976 a year). It’s scheduled to go to 2.5 in 2028.

What to do before January 1

• Pull a list of your salaried, exempt employees and compare their pay to the new threshold for your company size.
• For anyone who falls short, decide whether to raise their salary to the new level or reclassify them as non-exempt and start tracking hours and paying overtime.
• Don’t forget the duties test — being over the salary line doesn’t make someone exempt on its own.
• If you’re a smaller firm, start planning now for the 2028 jump to 2.5.

Learn more here.