Effective January 1, 2025, Washington State will increase its minimum wage and salary level thresholds for exempt employees.
Minimum Wage Increase
- New Minimum Wage: $16.66 per hour (up from $16.28)
Salary Level Increases for Exempt Employees
- Small Employers (fewer than 50 employees): $1,332.80 per week
- Large Employers (50+ employees): $1,499.40 per week
Computer Professionals (Hourly): $58.31 per hour
Determining Employer Size
Employer size is based solely on the number of Washington-based employees it employs at the time of the effective date for each increase. Each Washington-based employee counts as an employee to determine the size of the employer, regardless of whether that employee works full-time or part-time. An employer classified as employing fewer than 50 employees may rely on that classification for purposes of determining the size of the employer for the following calendar year.
Exemptions Duties Test
Of note, the duties test for exempt classification in Washington aligns closely with federal regulations but are not identical. Employers should carefully review the state’s requirements.
Non-Compete Agreement Limits
Washington also uses annual salary levels to determine the enforceability of non-compete agreements with employees or independent contractors. For 2025, non-compete agreements are only enforceable if the employee or contractor meets specific annual earnings thresholds:
- Employees: Annual earnings must exceed $123,394.17
- Independent Contractors: Annual earnings must exceed $308,485.43
Next Steps
To ensure compliance with these changes, employers should:
- Review Local Minimum Wage Requirements: Be mindful of localities with minimum wage requirements (such as Seattle and SeaTac) that exceed the state’s minimum wage.
- Update Payroll Systems: Adjust payroll systems to reflect the new minimum wage and salary level thresholds.
- Reclassify Employees: Reclassify exempt employees who no longer meet the salary level threshold to non-exempt status.
- Review Non-Compete Agreements: Ensure that non-compete agreements comply with the new earnings thresholds.
- Consult with Legal Counsel: Consult with legal counsel to understand the specific implications of the changes for your business.
HR Works Can Help
Current HR Works’ Virtual HR Helpline subscribers have unlimited access to answers to questions about the proposed FLSA exempt salary increase, as well as other HR and employment law topics, and 24/7 access to HR Works’ attorney-reviewed online compliance resource center (Comply), which offers human resources tools, forms, and other compliance resources. Additionally, Virtual HR Helpline subscribers receive two free FLSA Assessments each year (with the option to purchase additional assessments for a fee). The HR Helpline can be reached at hrhelp@hrworks-inc.com or by calling 888-668-1271.
HR Strategic Services clients may contact their designated HR Consultant for additional guidance and assistance with these changes and/or to request FLSA Assessments.
