Minimum wage, overtime, and workers’ comp premium changes take effect in new year

Changes in the minimum wage, overtime for white-collar professionals, overtime for agricultural workers, and workers’ compensation premiums will take effect Jan. 1, 2022.

The Washington State Department of Labor & Industries (L&I) sent out the reminder for businesses and employees.

The minimum wage

The state’s minimum wage will increase to $14.49 per hour starting Jan. 1, 2022. This increase from the current statewide minimum wage of $13.69 is based on a 5.83% increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers. The U.S. Bureau of Labor Statistics attributed the increase to more expensive gas, housing, household furnishings, and food.

The state minimum wage applies to workers age 16 and older. Under state law, employers may pay 85 percent of the minimum wage to workers ages 14-15. For 2022, the wage for that younger age group will be $12.32 per hour.

Cities are able to set minimum wages higher than the state’s. Both Seattle and SeaTac have higher wages.

Learn more at L&I’s minimum wage web page.

Overtime-exempt employees

The minimum salary an employee must earn to be considered overtime-exempt will rise on Jan. 1, 2022. This covers “white collar” positions held by executive, administrative, and professional workers. It also includes computer professionals and outside salespeople.

Among the requirements to be exempt from the state Minimum Wage Act, salaried employees must meet the job duties test and earn at least a minimum salary of $1,014.30 a week ($52,743.60 a year). That rate is 1.75 times the minimum wage.

Learn more at L&I’s overtime web page.

Agricultural overtime

Under an historic new law, Washington’s farmworkers will be eligible to earn overtime, for the first time, starting in 2022.

The law includes a three-year phase-in schedule. It incrementally reduces the number of hours worked by farmworkers before they are entitled to overtime pay:

  • As of Jan. 1, 2022: 55 hours in a workweek;
  • As of Jan. 1, 2023: 48 hours in a workweek; and,
  • As of Jan. 1, 2024: 40 hours in a workweek.

Dairy workers are already eligible to earn overtime after working 40 hours in a workweek.

Learn more at L&I’s agricultural overtime web page.

Workers’ comp premiums

The average workers’ compensation premium rate for hours worked in 2022 will go up 3.1% effective Jan. 1.

L&I has built a contingency reserve over the years by carefully managing rate increases and keeping program costs down through improved health and return-to-work outcomes for workers. Those strategic decisions cushioned what could have been a larger rate increase. The rate increase addresses the rising costs due to cost-of-living adjustments for long-term cases, triggered by a rise in the state’s average wage.

With this rate increase, the average rate per $100 of payroll in 2022 will be $1.53, a 1.4 percent increase over 2021. Individual employers may see their rates go up or down, depending on their recent claim history and changes in the frequency and cost of claims in their industry risk classes. Workers will continue to pay on average about a quarter of the premium, a similar percentage to that paid in 2021.

Learn more at L&I’s 2022 workers’ compensation rates web page.