Washington’s Department of Labor & Industries announced on September 30 that the state minimum wage will rise 3.5% to $17.73 an hour on January 1, 2027, up from $17.13. The same announcement quietly reset the salary floor for overtime-exempt employees: for employers with 51 or more workers it climbs to $1,773 a week ($92,196 a year), a 15% jump that matters more to many payrolls than the 60-cent wage increase.
The short answer
Washington’s minimum wage becomes $17.73 on January 1, 2027, a 3.5% cost-of-living increase. Salaried employees at employers with 51+ workers must earn at least $1,773 a week to stay overtime-exempt; employers with 50 or fewer workers face $1,595.70 a week. Local minimums in cities such as Seattle, Everett and Bellingham run higher.
What happened
L&I announced the new rate on September 30, as its minimum wage page says it does by that date each year. State law ties the adjustment to the federal CPI-W (Consumer Price Index for Urban Wage Earners and Clerical Workers), comparing August to August. The youth rate for 14- and 15-year-olds moves to $15.07, which is 85% of the adult rate, according to the Federal Way Mirror.
The overtime thresholds are set as a multiple of the minimum wage. Per L&I’s overtime rules page, the 2026 floor was $1,541.70 a week for every employer. In 2027 the schedule splits:
| Employer size | 2026 weekly floor | 2027 multiplier | 2027 weekly floor | 2027 annual |
|---|---|---|---|---|
| 1 to 50 employees | $1,541.70 | 2.25 × minimum wage | $1,595.70 | $82,976.40 |
| 51+ employees | $1,541.70 | 2.5 × minimum wage | $1,773.00 | $92,196.00 |
Source: Washington L&I. Weekly figures are 40 hours at the multiple of $17.73; annual figures are weekly × 52.
L&I says thresholds step up to 2.5 times the minimum wage by 2028, so small employers get one more year at the lower multiple.
Why it matters
The wage floor rises by $0.60. The large-employer overtime threshold rises by $231.30 a week, or $12,027.60 a year (CentsIQ calculation from L&I’s published 2026 and 2027 figures). That is a 15% increase, against 3.5% for the wage itself. Any salaried manager or professional paid between $80,168 and $92,196 at a 51+ employer is exempt today and will not be on January 1 unless the pay changes.
It also compounds the payroll-cost picture we laid out in our look at Washington’s 2027 payroll cost stack: the wage floor, the exempt line and the state’s payroll programs all move at once.
What this means for Washington employers
- Pull a salaried-employee list by pay level now. Flag everyone under $92,196 (51+ employees) or $82,976.40 (50 or fewer). Those are your reclassification-or-raise decisions.
- Price both options. Raising a $85,000 manager to $92,196 costs $7,196 a year plus payroll taxes. Reclassifying to hourly means tracking time and paying overtime, and the cost depends on real hours worked.
- Know your headcount. The 51-employee line decides which threshold applies. Count the way L&I does before you assume you are the smaller tier.
- Update payroll and budgets before year-end. Hourly rates under $17.73 need to change in the payroll system by the first January pay period. Each $0.60 raise on a full-time (2,080-hour) employee is $1,248 a year before payroll taxes and premiums.
- Check your city. Local jurisdictions with their own minimums, including Seattle, SeaTac, Tukwila, Renton, Bellingham, Everett and Burien, set higher floors than the state’s. Use the local rate where one applies.
- Watch the wage ladder. A new hire at $17.73 sits just above someone who was hired at $17.50 last year. Compression raises are a budgeting item, not a surprise.
State law requires L&I to calculate Washington’s minimum wage for the coming year using the federal CPI-W, comparing August to August. — Washington Department of Labor & Industries, as quoted by the Federal Way Mirror
Frequently asked questions
What is Washington’s minimum wage in 2027?
$17.73 an hour, effective January 1, 2027, up 3.5% from $17.13 (Washington L&I).
What is the youth minimum wage in Washington for 2027?
$15.07 an hour for 14- and 15-year-olds, which is 85% of the adult minimum.
What is the 2027 overtime-exempt salary threshold in Washington?
$1,773 a week ($92,196 a year) for employers with 51 or more employees, and $1,595.70 a week ($82,976.40 a year) for employers with 50 or fewer.
How does Washington calculate its minimum wage increase?
L&I applies the percentage change in the federal CPI-W between August of the prior year and August of the current year.
Do city minimum wages override the state rate?
Where a local minimum is higher than the state’s, as in Seattle, SeaTac, Tukwila, Renton, Bellingham, Everett and Burien, the higher local rate applies to work done there.
The bottom line
The $17.73 headline is a routine cost-of-living adjustment. The $92,196 line is the one that forces decisions, and the time to make them is before open enrollment and year-end payroll close, not after the first January paycheck.
Last updated: October 3, 2026. Figures from Washington State Department of Labor & Industries as announced September 30, 2026. This article is general information, not legal or tax advice.
