Legal Update
Oct 28, 2024
Washington Increases Minimum Wage and Salary Thresholds for Exemption and Non-Competes
The Washington State Department of Labor and Industries has announced the state minimum wage for 2025. In Washington, the state minimum wage is calculated annually (and generally increases) based on inflation. Effective January 1, 2025, Washington’s state minimum wage will increase to $16.66 per hour, which is a 2.35% increase over 2024.
Notably, Washington cities can set minimum wages that exceed the state minimum, and many cities do:
|
City |
2025 Minimum Wage |
|
Seattle |
$20.76 |
|
SeaTac |
$20.17 for employers in the hospitality and transportation industries |
|
Tukwila |
$20.10 for midsized employers $21.10 for large employers |
|
Renton |
$20.90 for employers with 500+ full-time employees worldwide |
|
Burien |
$19.66 for employers with 500+ full-time employees in King County |
|
Bellingham |
$17.66 from January 1 until April 30, 2025 |
2025 Salary Threshold for Exemption
In Washington, until at least 2028, increases to the minimum wage also automatically increase the minimum salary thresholds for overtime exemption. Please note that — in order to qualify for exemption — employees must meet the “duties” test for executive, administrative, professional workers, or computer employees, in addition to meeting the salary threshold.
Effective January 1, 2025, employers with up to 50 employees must pay overtime exempt workers a salary of at least 2 times the minimum wage. That means an employee that meets the “duties” test for exemption must also earn at least $1,332.80 per week (or $69,305.60 per year) in order to be exempt.
Effective January 1, 2025, employers with 51 or more employees must pay overtime exempt workers a salary of at least 2.25 times the minimum wage. That means an employee that meets the “duties” test for exemption must also earn at least $1,499.40 per week (or $77,968.80 per year) in order to be exempt.
Effective January 1, 2025, exempt computer professionals paid at an hourly rate must be paid at least $58.31 per hour in order to be exempt.
Salary Threshold for Non-Compete Agreements
In Washington, the salary threshold for enforceable non-compete agreements also increases annually based on inflation.
In order for an employee non-compete agreement to be valid and enforceable in Washington in 2025, an employee must earn at least $123,394.17 per year from the employer seeking to enforce the non-compete.
In order for a contractor non-compete agreement to be valid and enforceable in Washington in 2025, a contractor must earn at least $308,485.43 per year from the company seeking to enforce the non-compete.
Takeaways
The landscape of employment laws in Washington is complex and ever-changing. Employers doing business in Washington state should regularly be reviewing their handbooks, policies, and practices to ensure they are in compliance. Seyfarth is here and happy to help with all your Washington employment compliance needs.