The state of Washington has announced increases, effective January 1, 2023, in the minimum wage rate ad exempt salary thresholds for employees.
If you are an employer in Washington or have Washington employees, you’ll want to be aware of how this wage increases impact state wage requirements. Additionally, Seattle and SeaTac are receiving an increase in minimum wage requirements in 2023. Read on for more information about wage increases in Washington this year.
Washington State
Washington Minimum Wage
The statewide minimum wage for nonexempt workers will rise by $1.25 an hour effective January 1st, 2023. This increases hourly pay from $14.49 to $15.74. Details regarding the minimum wage increase are available on the Department of Labor and Industries Washinton minimum wage webpage.
If employees work within Seattle or Seatac city limits, they are required to be paid a higher minimum wage rate. Details on this specification can be found further in this blog post.
Washington Exempt Salary
As a result of the minimum wage increase for nonexempt employees, the minimum salary for white-collar workers who are exempt from overtime will increase effective January 1st, 2023. The Washington state minimum exempt salary ranges depending on the size of the corporation.
Small employers with 1 – 50 employees must pay exempt employees a salary of at least $1,101.80 per week. This totals $57,293.60 per year.
Large employers with 51 or more employees must pay exempt employees a weekly salary of at least $1,259.20 per week. This totals $65,478.40 per year. For a helpful chart, see L&I’s salary implementation threshold schedule.
Additionally, the salary threshold under federal law is only $684 per week, so employers in Washington must pay at the higher state level. The threshold salary is required regardless of how many hours an exempt employee works in the week, so even a part-time employee must be paid at this new higher salary – not a prorated portion of it – to satisfy the overtime exemption. L&I has created an online overtime resource center to assist employers in understanding these salary requirements, including charts, fact sheets, workshops, and webinars.
Washington Exempt Computer Professionals
The minimum salary rate for exempt computer professionals who are paid hourly will also increase as of January 1, 2023. All employers who choose to pay their exempt computer professionals an hourly rate rather than the salaried exempt rate described above must pay them at least 3.5 times the state minimum wage, which works out to $55.09 per hour in 2023. See L&I’s Administrative Policy: Exemption from Minimum Wage Act Requirements for Computer Professional Employees; ES.A.9.6.
Washington Noncompete Agreements
Washington law prohibits noncompete agreements with employees who earn less than the state’s annual threshold. The salary threshold is adjusted for inflation each year by L&I and will increase from $107,301.04 in 2022 to $116,593.18 in 2023. Legal Guide: Noncompetition Agreements, for guidance on additional requirements in Washington.
Seattle and SeaTac Cities
Seattle Minimum Wage
The City of Seattle is increasing its minimum wage requirement to $18.69 per hour for most employers. Seattle’s minimum wage rates apply to all nonexempt employees for all hours they work within the city limits. The specific minimum wage requirements for 2023 are:
- $18.69 per hour (up from $17.27 per hour) for large employers (more than 500 employees worldwide)
- $18.69 per hour for smaller employers (500 or fewer employees) who don’t pay at least $2.19 per hour toward an employee’s medical benefits and/or if the employee doesn’t earn at least that much per hour in tips
- $16.50 per hour (up from $15.75 per hour) for employees of smaller employers who receive medical benefits worth at least $2.19 per hour or earn at least that much per hour in tips
Employers are required to provide a written notice to each employee working in Seattle before any change in their wage rate or other terms of employment. An explanation of this requirement and a sample notice form can be found here. If you will be adjusting wages in light of the minimum wage increases, make sure you notify any affected workers. Be sure to update your workplace with the 2023 versions of the required posters.
SeaTac Minimum Wage
The City of SeaTac also maintains its own minimum wage rate covering certain transportation and hospitality employees working within the city. Effective January 1st, 2023, SeaTac will increase its minimum wage from $17.54 to $19.06 per hour. You may find additional information in the City of SeaTac’s official announcement documentation.
Exempt or Non-Exempt?
The minimum wage rates in both Seattle and SeaTac continue to be higher than the statewide rate in Washington. Remember that employees must be paid at the highest minimum wage rate that applies to them. While written notice of these pay increases isn’t required except for Seattle employees, advance written notice is certainly a best practice for employee retention and morale. For more information on overtime exemptions in Washington, see our Legal Guide: State Laws on the White Collar Exemption from Overtime. If you have questions about which rates apply to your employees or whether they are exempt, contact your Vigilant Law Group employment attorney.
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