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Reminder: Minimum, overtime wages set to rise in 2023

Reminder: Minimum, overtime wages set to rise in 2023 (From L&I newsroom) – The Washington State minimum hourly wage for 2023 will increase to $15.74 in January. That’s up $1.25 from what it is now. The 8.66-percent rise is directly linked to the cost of common goods such as housing, food and medical care as reflected in the Consumer Price Index.

State law directs the Washington State Department of Labor & Industries (L&I) to calculate the minimum wage for the coming year based on the federal Bureau of Labor Statistics’ (BLS) Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). In making the calculation, L&I compares the CPI-W index from August of the previous year to the index for August of the current year.

The state minimum wage applies to workers age 16 and older. Under state law, employers can pay 85 percent of the minimum wage to workers ages 14-15. For 2023, the wage for that younger group will be $13.38 per hour.

Cities can set minimum wages higher than the state. Seattle and SeaTac both have higher wages.

For overtime exempt employees

With the determination of the minimum wage for 2023, L&I has also calculated new minimum salary requirements for employees who are exempt from receiving overtime pay. The minimum salaries are a multiplier of the minimum wage. This change impacts “white collar” positions held by executive, administrative, and professional workers plus computer professionals and outside salespeople. To be exempt from earning overtime, a worker must earn at least the minimum salary and their duties must meet a jobs test.

The 2023 minimum salary for exempt employees working for small employers (1-50 employees) is 1.75 times the minimum wage. That means an employee exempt from overtime pay must earn at least $1,101.80 a week ($57,293.60 a year).

For large employers (51 or more employees), the threshold is 2 times the minimum wage. Those employees must earn at least $1,259.20 a week ($65,478.40 a year).

L&I updated the overtime rules in 2020, creating an eight-year implementation schedule that incrementally raises the multiplier until it reaches 2.5 times in 2028. The pace of the increase is based on the size of the employer.

Under the same rules, exempt computer professionals may be paid an hourly rate rather than a salary. In 2023 and beyond, the applicable hourly rate is 3.5 times the minimum wage, regardless of employer size. For 2023, that will be $55.09 per hour.

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