TUMWATER, WA—On September 30, 2027, the Washington Department of Labor & Industries (L&I) released new updates around minimum wage and overtime-exemption rules, which go into effect on January 1, 2027.
Washington State’s minimum wage becomes $17.73 per hour: a 3.5% increase from the current wage. Local governments can still set higher minimums, as many cities in the Greater Seattle Area currently have higher minimum wages than the State. The federal minimum wage remains $7.25 per hour.
New Calculations for Overtime Exemption
For employers with 51 or more employees, the multiplier to determine overtime-exempt employees increases from 2.25 times the minimum wage to 2.5 times in 2027. This means employees in 2027 will need to be at least $92,196.00 per year (or $1,773.00 weekly) to be exempt from overtime pay.
Small businesses with 50 or fewer employees will still calculate overtime-exemption at 2.25 times minimum wage, meaning an employee must earn $82,976.40 annually (or $1,595.70 weekly) to be exempt from overtime pay. This multiplier is expected to increase to 2.5 times in 2028.
Exempt computer professionals paid hourly must earn at least 3.5 times the minimum wage, or $62.06 per hour in 2027—an increase of $2.10 from 2026. Salaried computer professionals remain subject to the salary threshold.
Non-compete Clauses Prohibited Starting June 30, 2027
Washington State law will prohibit non-compete clauses, regardless of income, effective June 30, 2027. For the six months before the ban takes effect, L&I will use the CPI-W to calculate the minimum annual salary a worker must earn for their employer to impose and enforce a non-compete clause or contract.
Between January and June 2027, this annual salary threshold for employees will be $131,326.59. For independent contractors, the annual salary threshold during that same period will be $328,316.49.
This article was authored by Joshua Brittingham, Chair of Carney Badley Spellman’s Employment and Labor Practice Group. He regularly consults employers on wage-and-hour issues, and welcomes questions and can be reached at brittingham@carneylaw.com.
Disclaimer: This post is for general informational purposes only and does not constitute legal advice. Reading it does not create an attorney-client relationship. For advice on your specific situation, contact a licensed professional.
