Washington state's minimum wage will rise to $16.66 an hour next year, a 2.35 percent increase over 2024, the state Department of Labor & Industries (L&I) announced.
The new wage takes effect Jan. 1, 2025.
The minimum wage for the coming year is calculated using the federal Bureau of Labor Statistics' Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). L&I compares the CPI-W in the year-over-year period ending in August.
Housing and food costs increased over the past year, leading to the increase in the CPI-W, according to L&I.
As of this year, Washington has the highest state-level minimum wage in the nation. The federal minimum wage remains set at $7.25 an hour.
Cities can set minimum wages higher than the state. Seattle, SeaTac, Tukwila, Renton, Bellingham and Burien all will have higher wages in 2025, according to L&I.
A higher minimum wage is not the only change for 2025.
Overtime exempt employees
In addition to calculating the new minimum wage, L&I uses that information to update the minimum salary thresholds for overtime exempt employees.
For 2025, small employers with up to 50 employees must pay overtime exempt workers at least two times the minimum wage, or at least $1,332.80 a week or $69,305.60 a year.
For large employers, with 51 or more employees, overtime exempt workers must make at least 2.25 times the minimum wage, or at least $1,499.40 a week or $77,968.80 a year.
However, L&I created an eight-year implementation schedule in 2020 that "incrementally raises how much more than minimum wage salaried employees must be paid to be exempt from overtime until it reaches 2.5 times the minimum wage in 2028," according to a news release.
"The pace of the increase is based on the size of the employer," the release reads.
Computer professionals
The same rules allow exempt computer professionals to be paid an hourly rate rather than the salary required for most exempt employees, according to L&I. That hourly rate is 3.5 times the minimum wage, regardless of employer size, or $58.31 per hour.
Rideshare drivers
The minimum pay drivers will earn for rideshare companies like Lyft and Uber is also increasing Jan. 1.
For trips within Seattle in 2025, drivers will earn 68 cents per passenger platform minute and $1.59 per passenger platform mile, or $5.95, whichever is greater.
For trips outside of Seattle in 2025, drivers will earn 39 cents per passenger platform minute and $1.34 per passenger platform mile, or $3.45, whichever is greater.
Non-compete clauses
L&I also uses the CPI-W to calculate the minimum annual salary threshold for a non-compete clause or contract to be enforceable. For employees in 2025, the threshold will be $123,394.17. For independent contractors, the 2025 threshold will be $308,485.43, according to L&I.
___
(c)2024 The Olympian (Olympia, Wash.)
Visit The Olympian (Olympia, Wash.) at www.theolympian.com
Distributed by Tribune Content Agency, LLC.
