The Department of Labor & Industries (L&I) announced that Washington’s state 2023 minimum wage will increase to $15.74 per hour for workers 16 and older. The new wage is an increase of $1.25 and goes into effect January 1, 2023.

Washington’s minimum wage is adjusted each year for inflation based on the Consumer Price Index. L&I attributes this year’s 8.66% rise to the high rate of inflation seen in the U.S. this year. State law allows employers to pay younger workers (ages 14-15) down to 85% of the base minimum wage, which in 2023 will be $13.38 per hour. Some cities have set higher minimum wages for their local jurisdictions.

It’s important to consider is how the wage increase will change the state’s overtime exemption threshold for salaried workers. Salaried workers that are paid over a certain threshold are exempt from mandated overtime pay requirements. In 2023, salaried workers working for small employers will need to make at least $1,101.80 per week ($57,293.60 per year) to be exempt from overtime pay. Workers at large employers will need to make $1,259.20 per week ($65,478.40 per year) to be exempt.

The overtime exemption threshold is calculated as a multiplier of the minimum wage, and L&I is currently in the midst of an eight-year implementation schedule to increase the multiplier to 2.5x minimum wage. Under the implementation schedule, the annual multiplier increases more quickly for large employers (51+ employees) than it does for small employers (50 or fewer employees), though all employers will eventually have 2.5x minimum wage multiplier for the overtime exemption threshold by 2028.

AWC members can learn more about Washington’s overtime rules with our Washington State Public Employer Overtime Guide. Members will need their AWC login to access the guide and other materials.