Increases to Minimum Wage and Exempt Employee Salary Thresholds Will Be Here Soon

Editor's note: The 2025 minimum wage for the cities of Tukwila and Burien have been updated since the publication of this blog.

Both the federal and state governments have adopted hourly minimum wage laws and regulations detailing which types of workers are eligible for overtime pay. The controlling federal law is the Fair Labor Standards Act (FLSA), and the controlling state law is Washington’s Minimum Wage Act (MWA).

Washington’s MWA provides a higher level of protection for workers than the federal FLSA with regard to minimum wage and classifying exempt employees, so Washington State local governments must follow the more protective state standards (and, in some cases, the even more protective local standards). See Washington State Department of Labor and Industries v. Common Carriers, Inc. (1988), 29 U.S.C. §218, and RCW 49.46.120.

This blog will look at both upcoming increases in minimum wage and exempt employee salary thresholds.

Minimum Wage

The minimum wage in Washington State, currently set at $16.28 per hour, will be increased to $16.66 an hour on January 1, 2025. This is significantly higher than the $7.25 federal minimum wage and is the highest state-level minimum wage in the country (as of 2024).

Cities and counties in Washington State are authorized to adopt higher minimum wages than the state and many have done so. In 2025, local minimum wages will be:

• $21.16 per hour (large employers)/$20.16 per hour (mid-size employers) for Burien.
• $21.10 per hour (large employers) for Tukwila, and for mid-size employers, the minimum wage will increase to $21.10 per hour on July 1, 2025.
• $20.90 per hour (large employers)/$18.90 or $19.90 per hour (mid-size employers) for Renton.
• $20.76 per hour for Seattle, applicable to all employers.
• $20.29 per hour for King County, applicable to larger employers in unincorporated King County.
• $20.17 per hour for SeaTac, applicable to hospitality and transportation industry employers.
• $17.66 per hour for Bellingham.

Overtime Pay

Overtime pay can be owed to both hourly and salaried employees, so an employer cannot just assume a salaried employee is exempt from overtime pay. Rather, to determine whether an employee is exempt from overtime pay, the employer applies a two-part test: (1) salary threshold, and (2) job duties.

Salary threshold

The salary threshold for exempt workers increases each year in Washington State. Note the 2025 amounts are significantly higher than the salary thresholds set by the federal government ($1,128 per week/$58,656 annual salary for most exempt employees). 

Effective January 1, 2025, the following thresholds apply in Washington State:

• For small employers with 1-50 employees, $1,332.80 weekly salary threshold/$69,305.60 annual salary threshold, and
• For large employees with 51 or more employees: $1,499.40 weekly salary threshold/$77,968.80 annual salary threshold.

The Washington State Department of Labor and Industries has developed a Salary Threshold Implementation Schedule, which shows salary thresholds through 2028.

Job duties

The most common overtime exemption applies to “white-collar” workers in executive, administrative, or professional fields, computer professionals, or outside sales. MRSC’s webpage on Overtime and Comp Time details the job duties needed to qualify for the white-collar exemption; this blog will not detail those duties.

It is very important for a local government to classify employees properly at the outset of employment (and continue to review their job duties and salary amount throughout employment) so that the agency doesn’t find itself owing unpaid overtime wages at a later date. The U.S. Department of Labor’s Fact Sheet #17A: Exemption for Executive, Administrative, Professional, Computer & Outside Sales Employees Under the Fair Labor Standards Act can also assist with employee classification.

FAQs on Overtime and Exempt/Non-Exempt Employees

Here are some common questions MRSC gets regarding overtime pay and exempt/non-exempt employees

Can an employer require a non-exempt employee work more than eight hours per day without having to pay the employee overtime?

Yes. Overtime pay is required when a non-exempt employee works hours in excess of their normal 40-hour work period. Unless required by a collective bargaining agreement, overtime pay is not required if an employee works in excess of 8 hours in a day unless their total hours worked in a week exceeds 40 hours. (Note that law enforcement, fire protection personnel, and public hospital employees may voluntarily adopt alternative work periods, so this answer does not apply to those types of employees.)

Can the employer require the non-exempt employee take compensating (comp) time instead of overtime pay?

No. While an employee can agree to take comp time in lieu of overtime pay, it may not be imposed by the employer in lieu of overtime pay. WAC 296-128-560.

Must an exempt employee complete a timesheet?

No, but it is recommended. While non-exempt employees must complete a timesheet that reflects actual hours worked, exempt employees are not required to complete a timesheet. Rather, the expectation is that they will perform the work required whether it equates to more or less than 40 hours in a work week. However, as noted on MRSC’s Payroll Administration webpage:

[T]he most accurate method is to have the exempt employee complete the timesheets for actual hours worked or leave hours used in order to accurately meet reporting requirements for various state agencies.

Conclusion

Proper classification of employees as exempt or non-exempt and proper payment of overtime wages is an essential piece of the personnel puzzle for all employers. MRSC has a variety of webpages that can assist with proper employee classification and other related personnel topics:

• Leave Laws and Policies
• Minimum Wage
• Overtime and Comp Time
• Paid and Unpaid Holidays
• Payroll Administration
• Salaries, Compensation, and Benefits for Local Elected Officials
• Vacation and Other Personal Time Off