By Payroll and Entitlements Editorial Staff
The minimum wage in the state of Washington will increase to $13.69 per hour starting January 1, 2021. The change is significant this year because it also impacts wages paid to some salaried employees exempt from overtime and other protections under state law.
The Washington State Department of Labor and Industries enforces the state’s wage-and-hour laws. The minimum wage applies to most jobs, including those in agriculture.
This is the first year the Department has returned to calculating the minimum wage since 2016. For the past four years, increases were mandated as a result of passage of Initiative 1433 that year.
The 2021 minimum wage is based on a 1.39 percent increase over the last 12 months in the Consumer Price Index for Urban Wage Earners and Clerical Workers.
The state minimum wage applies to workers age 16 and older. Under state law, employers can pay 85 percent of the minimum wage to workers ages 14-15. For 2021, that will be $11.64 per hour.
According to the Department, employers must also keep in mind the following facts regarding the minimum wage:
- Tips and service charges do not count toward paying that worker’s state minimum wage.
- Farm workers can’t be paid less than the minimum wage, even when paid on a piece-rate basis. Regardless of how an employee is paid, the rate of pay must be at least the current state minimum wage.
Seattle and SeaTac each have set their own minimum wage.
Salaried professionals (“White Collar” exemption). Salaried executive, administrative and professional workers, and computer professionals must earn a salary above a minimum specified amount to remain overtime exempt. That amount will also increase in 2021.
The Department changed the minimum amount these exempt employees must earn when updates to the state overtime rules took effect July 1. The salary thresholds are now based on a multiplier of the minimum wage. In 2021, those thresholds are:
- For small businesses with 1-50 employees, an exempt employee must earn a salary of at least 1.5 times the minimum wage, or $821.40 a week ($42,712.80/year).
- For large businesses with 51 or more employees, an exempt employee must earn a salary of at least 1.75 times the minimum wage, or $958.30 a week ($49,831.60/year).
There are also changes in the thresholds for exempt computer professionals paid by the hour.
Because the new state thresholds will be more favorable than the federal threshold of $684/week ($35,568/year), Washington employers will have to adhere to the state thresholds in 2021. (Washington State Department of Labor and Industries, News Release No. 20-037 (Minimum Wage Bulletin), September 30, 2020).
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