Minimum Wage

Overview

While municipal employers have great discretion in setting the salaries and other compensation for their employees, most employees must be paid at least a certain minimum wage under state and federal laws. In addition, a few cities have established higher minimum wage levels. Employers must pay the highest applicable minimum wage rate – whether local, state, or federal.

Washington State Minimum Wage

The state Minimum Wage Act is set out at chapter 49.46 RCW. Beginning January 1, 2021 and each following January 1, increases will be calculated according to changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), as set out by RCW 49.46.020.

Every year on September 30, the Department of Labor and Industries (L&I) will release the updated minimum wage rates for the coming calendar year. These increases are based on the change in the U.S. City Average CPI-W for the previous 12 months prior to September 1 – in other words, the 12-month percent change in the U.S. CPI-W from August to August.

For those wanting to get an earlier start for the purposes of developing their budgets, the August CPI data is released each year in mid-September, two to three weeks ahead of the statutory September 30 date, according to the CPI release schedule.

For more information on the state minimum wage, including the current minimum wage rate, see the L&I Minimum Wage pages.

Federal Minimum Wage

The federal minimum wage rate is $7.25 per hour. However, since Washington's minimum wage currently exceeds the federal minimum wage, employers must pay the higher state minimum wage.

Local Minimum Wage Codes

Local governments also have the ability to adopt a higher minimum wage than the state or federal minimum wage rates, although this is uncommon now that the state minimum wage has increased and is indexed to inflation.

For a list of jurisdictions with higher minimum wages and links to local codes, see L&I's Minimum Wage webpage under the section "Local Minimum Wage Rates."

Local Living Wage Codes

Some local governments have concluded that workers who work for employers who contract with the local government should be paid at a level higher than that set by either the federal or state government, what is typically called a "living wage."

Since a “living wage” is established by a local government, there is no standard manner set for determining the amount of the wage. However, in most instances the wage is set according to the federal poverty guidelines for a specific family size. Any local “living wage,” of course, must be equal to or more than the minimum wage set by federal and state law.

Examples

• SeaTac Municipal Code Sec. 7.45.050 – Establishes a living wage of no less than $15 per hour for hospitality and transportation industry workers. This living wage is to be adjusted annually to maintain employee purchasing power by increasing the current year’s wage rate by the rate of inflation.
• Bellingham Municipal Code Ch. 14.18 – Provides that a “living wage” shall be paid by all service contractors and subcontractors covered under this chapter. The “living wage” was established at $10 per hour in 2002 and required to be adjusted annually according to changes on the Implicit Price Deflator.