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With many states implementing multi year minimum wage campaigns, it can be hard to stay on top of what you’re required to pay in your state.
Washington state will raise the minimum wage in 2025 and plans to do so every year according to the Consumer Price Index. Here’s what you need to know.
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What is the Washington state minimum right now?
The minimum wage in Washington will increase from $16.28 to $16.66 per hour on January 1, 2025. Younger workers, ages 14 or 15, can expect to be paid $14.16 an hour (85% of the standard minimum wage).
Employers must pay employees the minimum wage for all hours worked as defined by state law. Hours worked includes opening and closing a business, required trainings, and meetings.
Employers must pay all tips and service charges to employees, and businesses may not use tips and service charges paid to an employee as part of an employee’s hourly minimum wage.
But if your business is in Seattle, the requirements are different.
Minimum wage in Seattle
Starting January 1, 2025, all employers, regardless of the size of the company, will be required to pay the same minimum wage: $20.76 per hour. Under Seattle’s Minimum Wage Ordinance small employers will no longer be able to count tip and/or payments toward an employee’s medical benefit plan toward an employee’s minimum compensation requirements.
Previously, Seattle had different minimum wages, based on the company size and whether the employer paid towards an employee’s medical benefits and/or the employee earned tips. That is no longer the case. In 2025, all employers must pay employees an hourly wage of at least $20.76, regardless of employer size or whether the employee receives medical benefits or tips.
Seattle employers with 500 or fewer employees
| Pays $2.72/hour toward medical benefits and/or the employee earns $2.72/hour in tips | ||
|---|---|---|
| Year | Yes | No |
| 2021 | $15.00 | $16.69 |
| 2022 | $15.75 | $17.27 |
| 2023 | $16.50 | $18.69 |
| 2024 | $17.25 | $19.97 |
| 2025 |
$20.76 |
$20.76 |
Seattle employers with 501 or more employees
| Date | Minimum Wage |
|---|---|
| 2021 | $16.69 |
| 2022 | $17.27 |
| 2023 | $18.69 |
| 2024 | $19.97 |
| 2025 |
$20.76 |
In 2026 and beyond, the minimum wage will increase to reflect the rate of inflation.
Keep in mind that other counties, cities, and towns may have their own minimum wage laws. You should do the research to determine which local wage laws may apply to you.
How should I prepare for changes to the minimum wage as a business owner?
Washington state and Seattle are raising wages consistently for the next few years. Each year, you should examine your business and determine how those changes might affect you. Here are a few things you may want to do:
- Know what your schedule looks like: Do your own research and talk to city officials to know exactly when the minimum wage will increase for your business.
- Audit your expenses: Check your cash flow in detail and create a hiring plan that takes wage increases into account. You may also think about the type of worker you hire. For example, if you own a retail shop, you may think about temporary or seasonal workers as needed, which can be less expensive than taking on full-time salaried employees.
- Make sure you hire the right employees: Replacing employees is expensive — in terms of both time and money. You can decrease the total cost of recruiting and training when you hire (and then retain) the right people to do the job. Look for candidates with good track records, who come recommended, and who fit in with the company culture. Once the employee is onboarded, make sure you build a relationship and provide paths for employee growth; it makes it more likely that they will stay in their role.
- Update your technology: Operational efficiencies can save you money (that you can instead spend on staff) and your staff time. Consider automating certain aspects of your work (like payroll), and find ways to reduce production costs.
As always, to make sure your business is prepared and stays in compliance (for example knowing your employee’s rights or getting an EIN, you should discuss Washington minimum wage laws with your accountant and lawyer.
