Seattle minimum wage hits $20.76 an hour — and it’s not the area’s highest

SEATTLE – Seattle’s lowest-paid workers will be ringing in the new year with a raise.

Minimum wage in the city will rise to $20.76 per hour beginning midnight on New Year’s Day, one of the highest rates in the country. For the first time since Seattle’s minimum wage ordinance took effect almost a decade ago, all employers will be subject to the same pay floor.

“We are back to a single minimum wage in Seattle,” said Jacob Vigdor, professor of public policy and governance at the University of Washington. Previously, pay thresholds varied by business size and compensation model. “This is the final step of the rollout.”

In 2024, minimum wage for most employers in the city was $19.97 per hour. Exceptions existed for small employers, defined as those with 500 or fewer employees.

All employers regardless of size are now subject to the same minimum wage. The federal minimum wage is $7.25 an hour.

Under an exemption known as the tip credit, small employers could pay employees a lower minimum wage of $17.25 per hour, with the difference made up in tips. For those in the restaurant business, tips can often boost workers’ per-hour wages far beyond the municipal minimum.

In Seattle, restaurant workers and businesses alike have expressed mixed feelings about the coming increase.

Owners of local restaurants, coffee shops and bars worry that regular price hikes keeping up with the rising cost of labor are turning customers away from dining out. Workers have expressed concern that as wages and menu prices tick up customers might tip less, eroding a critical component of their take-home pay.

“It’s just not sustainable,” said Anthony Anton, president and chief executive officer of the Washington Hospitality Association, which represents restaurants across the state.

Anton said restaurants are already squeezed by high costs and low margins. An hourly wage hike from $17.25 to $20.76 – representing a 20% increase in labor costs – could force many businesses to close, Anton said. The trade association projects that in the Seattle area, the number of restaurants will decrease by 5% to 8% in 2025.

Others expect the effect on businesses to be more modest, pointing out that the exact amount of the wage increase has been scheduled since the fall.

“People knew this was coming,” said Jennie Romich, professor of social welfare policy at the University of Washington. Romich said most businesses have likely already made the necessary adjustments to accommodate higher labor costs.

Worker advocates argue that rising minimum wages are critical to addressing the region’s affordability crisis, which saw consumer prices increase 3% year over year, as of the end of October.

Seattle’s ordinance requires that the minimum wage be increased at the beginning of each year to adjust for inflation, defined as the change in the consumer price index for the metro region during the 12-month period ending in the prior August.

In the face of higher living costs and stubborn inflation, the lowest paid workers should be able to count on earning enough money to meet their needs, said Katie Wilson, general secretary of the Transit Riders Union and an organizer on local wage raise campaigns.

“Workers and working families have really been struggling with rising costs of living, from food to rent to gas. Getting a big wage increase will really help people as we move into 2025 to make ends meet,” she said. “We all benefit when the people who work in the coffee shops and grocery stores can afford to live in the communities where they work.”

Seattle isn’t the only place in Washington where minimum wages are getting bumped Wednesday. Across the state, six other localities also have raises scheduled.

For large employers, defined as those with over 500 employees, the minimum wage will rise to $21.10 per hour in Tukwila, $20.90 in Renton and $20.29 in unincorporated parts of King County. In the city of SeaTac, minimum wage for hospitality and transportation industry workers will be $20.17 per hour.

In Burien, the minimum wage will be set at $21.16 per hour for large employers, the highest in the state. But there’s a catch: In Burien, employers can count contributions to medical plans and tips toward the difference between the lower state minimum wage of $16.66 and the higher municipal minimum wage.

In February, Burien voters will weigh in on a ballot initiative that would prohibit employers from counting tips toward the minimum wage, among other provisions.

Other notable updates are also slated for Everett, where voters passed an initiative last year that will set minimum wage at $20.24 per hour for large employers beginning July 1. Bellingham’s minimum wage will increase to $17.66 per hour Wednesday, before rising again to $18.66 per hour May 1. Exemptions to local minimum wage requirements for small employers vary by ordinance.