Beginning January 1, 2026, Washington State is raising the salary amount employers must pay someone in order for employees to remain exempt from overtime, minimum wage, and paid sick leave tracking rules.
The Key Numbers
- If an employee makes less than $80,168, they must be paid overtime for any hours over 40, even if their job duties used to qualify them as exempt.
- January 1, 2026 – Minimum wage goes from $16.66 to $17.13 per hour.
- The exempt threshold is set at 2.25 times the minimum wage so as the minimum wage, increases, so will the exempt threshold. You can expect incremental increases each year. See table below.
Who Can Still be Exempt?
Only employees who:
- Are paid a salary of at least $80,168 in 2026 AND
- Perform exempt duties.
What Does This Mean for Your Organization?
If your salaried employees earn less than the new thresholds, you will need to make adjustments:
- Increase their pay to meet or exceed the new thresholds.
- Reclassify them as hourly. This means that employees making less than the threshold will now qualify for overtime for any work over 40 hours per week, or seven-day period.
Note that Washington’s thresholds are higher than the Federal threshold, so your Washington based organization will need to follow the state rules to remain compliant.
Here’s how to get your organization prepared for 2026 and beyond:
- Audit Salaries and Roles: Take a close look at who’s earning below the new thresholds and whether their job duties still qualify for exempt status. Decide if a salary adjustment or reclassification makes the most sense
- Budget for Increases: With thresholds rising incrementally through 2028, planning ahead will save you from scrambling each year. A little foresight now can go a long way.
- Review Job Duties: The updated job duties test aligns more closely with federal standards, but you’ll still need to make sure exempt roles meet Washington’s definitions. Clear and accurate descriptions will make life easier for everyone.
Have more questions? Reach out to DZA here and we can connect you with an advisor.
