Changes in 2022 for the Salary Threshold for Washington Exempt Employees

Join us for our upcoming webinar: January 2023 Salary Threshold Increase for Exempt Employees

UPDATED November 15, 2021:

Revisions to the Washington State Minimum Wage Act (MWA) have resulted in increases to the minimum salary level that must be earned by employees to be properly classified as exempt. The salary threshold for classifying Washington employees as exempt will increase again effective January 1, 2022.  Salary threshold levels for employees (other than computer professionals) of small and large employers can be found on the New Salary Threshold Implementation Schedule published on the Washington State Department of Labor & Industries website.  The salary threshold is revised each September for the following year based upon increases to the minimum wage which relies upon the Consumer Price Index.  Employers should be on notice that salary projections for future years are based upon the estimated Consumer Price Index which may be updated. Accordingly, future salary threshold numbers should be verified by employers periodically.       

Effective January 1, 2022, the threshold salary level will be 1.75 times the current state minimum wage for both small and large employers.  The 2022 salary threshold will change from $821.40 per week ($42,712 annually) for small employers and $958.30 ($49,831 annually) for large employers to $1,014.30 per week ($52,743.60 annually) for both small and large employers. Computer professionals who are paid hourly have their own schedule of estimated increases. 

Employees must be designated as either exempt or non-exempt and classification is dictated by the law.  Non-exempt employees must be paid at least minimum wage for all hours worked, they are entitled to overtime pay for hours worked in excess of 40 in a week, and are entitled to all protections guaranteed by the state MWA, including sick leave.  Exempt employees, on the other hand, are not entitled to overtime pay, are not required to earn at least minimum wage for all hours worked, and are not guaranteed other protections under the MWA, including paid sick leave.  In order to be classified as exempt, an employee must satisfy a three-part test. 

• Salary Basis:  The employee must be paid a predetermined and fixed salary.  The employee’s salary may not vary based upon the quality or quantity of the employee’s work.
• Salary Level:  The amount paid to the employee must meet or exceed the current threshold amount regardless of whether the individual is a full-time or part-time employee.
• Duties:  The employee must perform specific duties involving executive, administrative, professional, or computer professional as defined by law.

Whether an employer is considered a small or large employer depends upon the number of employees.  Small employers are those with one to 50 employees, while large employers have 51 or more employees.  When counting employees, employers may use one of two methods.  Employers may either use the number of Washington-based employees (full-time and part-time employees are counted) employed on the effective date of each step of the implementation schedule or may use the same number of employees used for Washington Paid Family and Medical Leave purposes.   

What amounts count as salary has not changed, and continues to include those set amounts paid on a recurring basis to compensate for work performed.  Washington state law does not include board, lodging, housing, bonuses, commission, and benefits as salary.

Employees who no longer meet the salary threshold requirement may not remain exempt employees. Employers are not required to increase employee wages for those who have fallen below the salary threshold unless they wish the employee to remain exempt. 

It is very important that employers do not misclassify non-exempt employees as exempt.  Claims against employers for unpaid wages can be a costly mistake, particularly when attorney’s fees and costs are also considered. 

If you have questions about the classification of your employees, please contact Member Care to discuss your concerns. 

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The salary threshold for classifying Washington employees as exempt will increase again effective January 1, 2022.

Employees must be designated as either exempt or non-exempt and classification is dictated by the law. Non-exempt employees must be paid at least minimum wage for all hours worked, they are entitled to overtime pay for hours worked in excess of 40 in a week, and are entitled to all protections guaranteed by the state Minimum Wage Act (MWA), including sick leave. Exempt employees, on the other hand, are not entitled to overtime pay, are not required to earn at least minimum wage for all hours worked, and are not guaranteed other protections under the MWA, including paid sick leave. In order to be classified as exempt, an employee must satisfy a three-part test.

• Salary Basis: The employee must be paid a predetermined and fixed salary. The employee’s salary may not vary based upon the quality or quantity of the employee’s work.
• Salary Level: The amount paid to the employee must meet or exceed the current threshold amount regardless of whether the individual is a full-time or part-time employee.
• Duties: The employee must perform specific duties involving executive, administrative, professional, or computer functions as defined by law.

Revisions to the state MWA have resulted in increases to the minimum salary level that must be earned by employees classified as exempt. Effective January 1, 2022, the threshold salary level will increase to 1.5 times the current state minimum wage for small employers and 1.75 times the current minimum wage for large employers. The salary threshold is revised each September for the following year based upon increases to the minimum wage which relies upon the Consumer Price Index. The Department of Labor and Industries has published a Salary Threshold Implementation Schedule which outlines estimated increases through 2028 for affected exempt workers other than computer professionals. The 2022 increase for small employers is estimated to change from $821.40 per week ($42,712 annually) to $975 per week ($50,700 annually) and for large employers from $958.30 per week ($49,831 annually) to $975 per week ($50,000 annually). Computer professionals who are paid hourly have their own schedule of estimated increases.

Whether an employer is considered a small or large employer depends upon the number of employees. Small employers are those with one to 50 employees, while large employers have 51 or more employees. When counting employees, employers may use one of two methods. Employers may either use the number of Washington-based employees (full-time and part-time employees are counted) employed on the effective date of each step of the implementation schedule or may use the same number of employees used for Washington Paid Family and Medical Leave purposes.

What amounts count as salary has not changed, and continues to include those set amounts paid on a recurring basis to compensate for work performed. Washington state law does not include board, lodging, housing, bonuses, commission, and benefits as salary.

Employees who no longer meet the salary threshold requirement may not remain exempt employees. Employers are not required to increase employee wages for those who have fallen below the salary threshold unless they wish the employee to remain exempt.

It is very important that employers do not misclassify non-exempt employees as exempt. Claims against employers for unpaid wages can be a costly mistake when attorney’s fees and costs are also considered.