2022 Changes Impacting Employers

Minimum Wage

Beginning January 1^st Washington’s state minimum wage has increased from $13.69 to $14.49 per hour. 

Seattle: The city of Seattle’s minimum wage depends upon the size of the employer and whether the employer contributes toward the employee’s medical benefits and/or whether the employee earns $1.52 per hour in tips.  Small employers (those with 500 or fewer employees) who either contribute the threshold amount toward medical benefits or the employee earns the threshold amount in tips, must pay at least $15.75 per hour while those who do not, must pay at least $17.27 per hour.  Large employers (those with 501 or more employees) must pay at least $17.27 per hour. 

SeaTac: The city of SeaTac’s minimum wage for hospitality and transportation industry employees has increased to $17.54 per hour.

Idaho’s state minimum wage applicable to most employees remains at the current federal minimum wage rate of $7.25 per hour.  Tipped employees may be paid $3.35 per hour.  Certain exceptions apply.

Salary Threshold for Exempt Employees

The salary threshold amount for small and large businesses to classify employees as exempt has increased to $1,014.30 per week or $52,743.60 per year for non-computer professionals paid by the hour.  Computer professionals paid hourly must be paid at least $50.72 per hour. 

Washington Long Term Services and Supports Act (WA Cares Trust)

Effective January 1^st businesses with Washington employees are required to report those employees’ hours and wages, and collect (and remit quarterly) premiums in the amount of $0.58 per $100 of gross wages. No employer contribution is required.  Washington Governor Jay Inslee has instructed that collection of the premium by the State be postponed.  The Washington Legislature is expected to consider action related to the Act at the beginning of the 2022 session, but currently, the Act and its premium collection obligations have not been changed.  Accordingly, while employers may choose to delay premium collection in hopes that the Legislature will amend the premium obligation, if the Legislature fails to act, employers will be legally obligated to pay the premiums owed.    

Washington Paid Family & Medical Leave Premium

Beginning January 1^st, premium amounts for PFML increase to 0.6% of the employee’s gross wages up to the taxable maximum for Social Security.  A premium calculator can be found here.

Also, the definition of “family member” was expanded effective July 25, 2021, to also include “any individual who regularly resides in the employee’s home or where the relationship creates an expectation that the employee care for the person and that individual depends on the employee for care.”

Finally, the qualifying period for receiving PFML benefits was expanded in 2021 for those impacted by COVID-19.  Accordingly, for qualifying events occurring January 2, 2021, through March 31, 2022, ESD will look to the employee’s pre-pandemic employment history (January – December 2019 or April 2019 – March 2020) to see if the employee met the hourly requirement of working at least 820 hours.  Under this temporary change, employees who otherwise might not have sufficient hours to receive benefits may still qualify for benefits if their ability to work was impacted by COVID-19. 

Earning Threshold Requirements for Non-Compete Agreements

Non-compete agreements may only bind Washington employees and independent contractors earning more than the legal threshold amounts.  The Department of Labor and Industries may adjust the threshold amounts each year.  Effective January 1^st, the calculated threshold for employees is $107,301.04 and $268,252.59 for independent contractors. 

 Optional Standard Mileage Rates

The IRS issued the 2022 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical, or moving purposes. Beginning on January 1^st the standard mileage rates for the use of a car (also vans, pickups, panel trucks) are:

• 58.5 cents per mile driven for business use (up 2.5 cents from the 2021 rate)
• 18 cents per mile driven for medical, or moving purposes for qualified active-duty members of the Armed Forces (up 2 cents from the 2021 rate)
• 14 cents per mile driven in service of charitable organizations (set by statute, remains unchanged from 2021)

More information regarding mileage rates can be found here: IRS issues standard mileage rates for 2022 | Internal Revenue Service