Updated October 15, 2020
On September 30th, the Washington State Department of Labor & Industries (L&I) announced the new state minimum wage. Using data from the U.S. Bureau of Statistics, L&I has determined the minimum wage for next year will be $13.69 an hour, up from $13.50 an hour in 2020. The new thresholds will go into effect Jan. 1, 2021.
The increase also applies to workers under 16. In Washington, workers age 14 and 15 can be paid just 85% of the state minimum wage. That means they will earn at least $11.64 an hour in 2021.
Starting January 1, 2021, Seattle’s minimum wage for small employers (500 or fewer employees worldwide) is $15 an hour if the employee also receives tips and/or payments toward 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 2021 wage will increase to $16.69 per hour. The minimum wage for large employers (over 500 employees worldwide) for 2021 is also $16.69. SeaTac announced a change to their minimum wage of $16.57/hour in 2021.
Overtime Exempt Employees
This change in the state minimum wage also increase the new state minimum salary thresholds for overtime exempt employees.
Using the 2021 minimum wage, L&I has calculated the salary thresholds taking effect Jan. 1, 2021:
- Small businesses (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).
- Large businesses (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).
In addition, the new minimum wage changes the 2021 thresholds for computer professionals who are paid by the hour.
- Small businesses (1-50 employees): hourly computer professional employees must earn a rate of at least 2.75 times the state minimum wage ($37.65/hour).
- Large businesses (51 or more employees): hourly computer professional employees must earn a rate of at least 3.5 times the state minimum wage ($47.92/hour).
The threshold multiplier for overtime exempt employees will be phased in until it reaches 2.5 times the minimum wage in 2028. At that point, increases will be determined by any changes in the minimum wage caused by inflation.
*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.