Washington residents will see the state’s minimum wage rise to $17.73 an hour on Jan. 1, 2027, according to an announcement from the Washington State Department of Labor & Industries (L&I). The increase represents a 3.5 percent adjustment based on the federal Bureau of Labor Statistics’ Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI‑W).
How the new rate is calculated
L&I explained that state law requires the agency to compare the CPI‑W from August of the previous year to August of the current year and adjust the minimum wage by the percentage change. This formula ensures the wage keeps pace with inflation and reflects the cost of living for Washington workers.
Impact on teen workers
By law, employers may pay workers who are 14‑ and 15‑years‑old up to 85 percent of the minimum wage. With the new rate, the allowable pay for those teens will be $15.07 per hour starting Jan. 1.
Overtime‑exempt multiplier changes
Large employers with 51 or more employees currently must pay overtime‑exempt workers at least 2.25 times the minimum wage. When the minimum wage rises, the multiplier will also increase to 2.5 times the new rate. That means an employee must earn at least $1,773 a week (about $92,196 a year) to be exempt from overtime pay.
Small businesses with up to 50 workers will not see the overtime‑exempt multiplier change until 2028, when it is scheduled to rise from 2.25 to 2.5 times the minimum wage.
Comparison with federal and local rates
The current Washington minimum wage of $17.13 per hour already exceeds the federal floor of $7.25, which has been unchanged since July 2009. Several cities and unincorporated areas in the state already have higher local minimums, including Seattle, SeaTac, Tukwila, Renton, Bellingham, Everett, Burien and King County.
What this means for families and businesses
For working families, the higher wage floor promises greater earning power for low‑income earners, helping to offset rising housing and food costs. For employers, especially larger firms, the increase in the overtime‑exempt multiplier will raise the threshold for overtime eligibility, potentially reducing overtime payroll expenses.
Small‑business owners should prepare for the 2028 multiplier adjustment, while continuing to comply with the 2027 minimum wage increase. The Department of Labor & Industries encourages businesses to review payroll systems now to ensure a smooth transition.
Where to find more information
Employers, workers, and community members can review the full set of wage updates and related guidance at lni.wa.gov/workers-rights/wages/minimum-wage. The site provides detailed tables, FAQs, and contact information for any questions about compliance.
Original reporting: Renton Reporter — read the source article.
