Significant Increases in Washington Minimum Wage and Exempt Salary Threshold for 2022

Davis Wright Tremaine LLP

Davis Wright Tremaine LLP

Starting January 1, 2022, the Washington state minimum wage will be $14.49 per hour. This is a 5.83 percent increase from the current 2021 minimum wage of $13.69 per hour.

Because the salary threshold for exempt employees in Washington is tied to a multiple of the minimum wage, the exempt salary threshold for all employers, regardless of size, with Washington-based employees in 2022 will increase to $52,743.60 (or $1,014.30 per week).

How Washington State Calculates Minimum Wage

Even though Washington state's minimum wage and exempt salary thresholds are already among the highest in the United States, state law requires an automatic annual inflation adjustment based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).

Each September, the state Department of Labor & Industries compares the CPI-W from August of the previous year to the index for August of the current year. The year over year increase from 2020 to 2021 during this period was 5.83 percent.

Consequently, employers that have Washington based employees need to make the appropriate salary adjustments in 2022 for employees whose rate of pay is at or close to the minimum hourly wage or the minimum salary threshold.

Considerations for Employee Reclassification

Given the significant increase in the exempt salary threshold for employers of all sizes across all industries, it is likely that a number of employers will consider reclassifying current exempt employees as non exempt employees due to budget constraints, market conditions, salary compression, and other variables.

Employers considering reclassification should consult with experienced wage and hour counsel to identify legal options for reclassification; the impact on collateral obligations such as rest/meal periods, overtime pay, and coverage under state leave laws; employee relations communications; and training programs for supervisors and employees on recordkeeping and pay administration following reclassification.

Exceptions to Washington State Minimum Wage Law

The state minimum wage applies to most workers age 16 and older—however, employers can pay 85 percent of the minimum wage to workers age 14 15. For 2022, the wage for 14 and 15 year olds will be $12.32 per hour.

Exempt computer professionals may be paid based on either the exempt salary threshold ($52,743.60 annually for 2022) or by the hour. However, if paid by the hour, the minimum hourly rate for 2022 for computer professionals is $50.72 per hour.

Note: Two municipalities in Washington have local minimum wage rates that exceed the state minimum wage:

  • Employers with employees working in the City of Seattle must pay $17.27 per hour in 2022. However, small employers (500 or fewer employees) who pay at least $1.52/hour toward the employee's medical benefits and/or where the employee earns at least $1.52/hour in tips can pay a cash wage of $ 15.75/hour.
  • Hospitality and transportation employers with employees working in the City of SeaTac must pay a minimum wage of $17.53 per hour in 2022.

[View source.]

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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