WA State Minimum Wage & Exempt Salary Changes

Washington’s minimum wage increased again this year. When that number goes up, it does more than affect hourly employees. It also impacts the minimum salary required to classify someone as exempt from overtime.

In Washington, to treat an employee as exempt, you must meet two tests. The duties test and the salary threshold. The salary threshold is tied directly to the state minimum wage. When minimum wage increases, the required exempt salary increases too.

For 2026, the exempt salary threshold is approximately 80,168 per year. If a salaried employee earns less than that, they are generally considered nonexempt and must be eligible for overtime, even if their title sounds managerial.

Why this matters:

Many small and mid-size employers have long-term salaried employees earning somewhere between 60,000 and 75,000 per year. Those roles may have historically been treated as exempt. Under current Washington rules, they likely no longer qualify unless their salary has been adjusted.

Example:

Let’s say you have an Operations Manager earning 72,000 per year. They regularly work 45 to 50 hours per week. Under the 2026 threshold, that salary falls below the exempt requirement. That means the employee should either:

• Be reclassified as nonexempt and paid overtime for hours over 40, or
• Have their salary increased to meet the new threshold, assuming their duties also qualify

If no adjustment is made, you could be exposed to back overtime liability.

Now layer in Bellingham.

If your employees work inside Bellingham city limits, the higher local minimum wage increases the base number used in calculations and adds another compliance consideration. Even if most of your workforce is outside the city, hybrid or mobile employees can complicate things.

This is why these changes matter more than they appear on the surface. It is not just about raising hourly wages. It is about classification, overtime exposure, payroll structure, and documentation.

If you want to read the official details straight from the source, here are a couple of helpful links:

• Washington Department of Labor & Industries Wage and Hour Overview — This page explains current minimum wage rates, overtime rules, and the exempt salary threshold:
https://www.lni.wa.gov/workers-rights/wages/overtime/changes-to-overtime-rules

• Washington Minimum Wage Rate List — This page shows the annual state minimum wage amounts and how they have changed over time:
https://lni.wa.gov/workers-rights/wages/minimum-wage

These are great places to get the official figures and descriptions if you want to dig deeper or verify specific details.

If you have employees working inside Bellingham city limits, pay attention to the local minimum wage. As of January 1, 2026, the City of Bellingham minimum wage is 19.13 per hour. That is higher than the Washington state minimum wage.

If an employee works inside the city even part of the time, you are required to pay the Bellingham rate for the hours worked within city limits. This applies to hybrid roles, mobile employees, and service staff who move between locations.

What I am seeing locally is not panic, but confusion. Employers are unsure how to track hours by location, how this affects salaried staff, and whether they need to adjust pricing or staffing models to absorb the increase.

A few practical reminders for local employers:

• Confirm whether any of your employees perform work inside Bellingham city limits
• Make sure your payroll system can account for different wage rates by location
• Review your exempt classifications to ensure salary thresholds still make sense
• Update wage postings and required notices where applicable

There are no separate Whatcom County paid leave programs at this time beyond state requirements, but minimum wage enforcement at the city level is active. That means documentation and payroll accuracy matter.

To review the official City of Bellingham minimum wage information, visit:
https://cob.org/services/business/city-minimum-wage

If you are unsure whether your current setup is aligned with both state and city requirements, this is a good time for a quick review.