Washington state’s minimum wage is increasing to $14.49 per hour starting Jan. 1, 2022.

The state’s current minimum wage of $13.69 will rise 5.38% next year, the Washington State Department of Labor & Industries (L&I) announced on Sept. 30.

The increase is attributed to more expensive gas, housing, household furnishings and food, according to the department.

The state minimum wage applies to workers age 16 and older. Under state law, employers can pay 85% of the minimum wage to workers ages 14 and 15. Next year, the wage for that younger group will be $12.32 per hour.

Cities are able to set minimum wages higher than the state’s; Seattle’s minimum wage is $15 per hour if an employer pays for the employee’s medical benefits and $16.69 for all other employees, according to the city’s website. The City of SeaTac implemented a minimum wage of $16.57 this year.

State law mandates L&I calculate the minimum wage for the coming year based on the federal Bureau of Labor Statistics’ (BLS) Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).

Calculations are based on the L&I comparison of the CPI-W from August of the previous year to the index for August of the current year.

For overtime exempt employees

A higher minimum wage also means an increase in the minimum salary an employee must earn in 2022 to be overtime exempt, according to the department.

“White collar” positions held by executive, administrative, and professional workers plus computer professionals and outside salespeople are impacted under the state’s rules governing exemptions to the Minimum Wage Act.

Salaried exempt employees must earn at least a minimum salary that is established as a multiplier of the minimum wage.

Therefore, when the minimum wage increases, so does the salary threshold. L&I created an eight-year implementation schedule that incrementally raises the multiplier until it reaches 2.5 times in 2028.

However, the pace of the increase is based on the size of the employer, according to the department.

For 2022, to be exempt from overtime, an employee must earn at least $1,014.30 a week ($52,743.60 a year), or 1.75 times the minimum wage.

Computer professionals who are paid by the hour have a different threshold. The new minimums are a part of changes to the overtime rules that took effect July 1, 2020.

The minimum wage applies to most jobs, including those in agriculture. In addition, agricultural workers will be eligible to earn overtime after working more than 55 hours per week next year.