Washington Sets New Minimum Wage and Overtime Exempt Threshold for 2023

Washington State Department of Labor & Industries (L&I) announced the new state minimum wage for 2023. Starting January 1, 2023, the Washington state minimum wage is $15.74/hour.

State law mandates that L&I calculate the minimum wage for the coming year based on the Bureau of Labor Statistics (BLS) Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). L&I compares the CPI-W from August of the previous year to the index for August of the current year to make the calculation. The rate for August 2022 was 8.66%

The minimum wage applies to most jobs, including those in agriculture. In addition, agricultural workers are eligible to earn overtime after working more than 48 hours per week, beginning January 1, 2023.

Municipalities

Seattle

Starting January 1, 2023, Seattle’s minimum wage for large employers (over 500 employees worldwide) for 2022 is $18.69/hour. The minimum wage for small employers (500 or fewer employees worldwide) is $16.50/hour if the employee also receives tips and/or payments toward the employee’s medical benefits. For Seattle businesses with 500 employees or less who do not pay medical benefits and/or allow employees to earn tips, the 2023 wage will increase to $18.69/hour.

SeaTac

SeaTac announced a change to their minimum wage for hospitality and transportation employees to $19.06/hour starting January 2023.

Overtime Exempt Employees

The change in the state minimum wage also increases the new state minimum salary thresholds for Overtime Exempt Employees.

Using the 2023 minimum wage starting January 1, 2023, L&I calculated the salary thresholds for employers with 1-50 employees to be at least 1.75X the state minimum wage, or $1,101.80/week ($57,293.60/annually). Employers with 51 or more employees must receive 2X the state minimum wage, or $1.259.20/week ($65,478.40/annually)

The rate changes in 2024 as employers with 1-50 employees increase at least 2X the minimum wage. For large businesses (51 or more non-exempt WA employees), rates will continue to be 2X the state minimum wage.

Computer Professionals

All hourly computer professional employees must earn at least 3.5 times the state minimum wage ($55.09/hour).

Minimum pay for Uber, Lyft, and other rideshare drivers

The legislature granted new rights and protections to rideshare employees passed earlier this year, starting January 1, 2023.

For trips within Seattle in 2023, drivers will earn 64 cents per passenger minute and $1.50 per passenger mile, or $5.62, whichever is greater.

For trips outside of Seattle in 2023, drivers will earn 37 cents per passenger minute and $1.27 per passenger mile, or $3.26, whichever is greater.

Noncompetition Thresholds

Workforce mobility is important to economic growth and development.  Annually, the Washington Department of Labor updates the Noncompetition enforceability thresholds to account for inflation.  If an employee’s salary is below the mandated threshold amount, any noncompetition clause or agreement is not enforceable. The new thresholds starting January 1, 2023, are $116,593.18 for employees and $291,482.95 for independent contractors.

*This document simplifies complex information as it is understood by Time Equipment Company. It is not to be taken as legal advice. The guidelines are consistently changing. For further information, please visit lni.wa.gov or www.seattle.gov.