Olympia and Tumwater employers will need to raise base pay for minimum-wage workers to $17.73 per hour starting Jan. 1, 2027.
The Washington State Department of Labor & Industries announced the increase Wednesday, Sept. 30, pegging it to a 3.5% rise in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The bump adds 60 cents to the current $17.13 rate, which is already the highest state minimum wage in the country and more than double the federal floor of $7.25.
Both Olympia and Tumwater follow the state rate.
Neither city sets its own minimum wage.
Who else is affected
The increase reaches beyond hourly workers. Large employers with 51 or more employees must pay overtime-exempt salaried workers at least $92,196 per year, up from $80,168, to keep them exempt from overtime rules, according to Seattle Weekly. That threshold jumps because it is tied to 2.5 times the minimum wage.
Small businesses with up to 50 workers face a lower bar. Their overtime-exemption threshold rises to $82,976 per year, based on a 2.25 multiplier. That multiplier is not scheduled to increase to 2.5 until 2028.
Workers ages 14 and 15 may be paid 85% of the adult rate. Their floor rises to $15.07 per hour, up from $14.56, according to L&I's official wage poster.
Hourly computer professionals must earn at least $62.06 per hour, a $2.10 increase, KPTV reported.
What it costs to live here
The new rate still falls short of local living costs. The MIT Living Wage Calculator estimates a single adult with no children in the Olympia-Lacey-Tumwater area needs $26.12 per hour to cover basic expenses.
That data, last updated in February, was calculated against the 2026 rate of $17.13.
Shiva Diamond, a Haggen grocery store shop steward for United Food and Commercial Workers (UFCW) Local 367, told the Olympia City Council in July that the gap between the state minimum and a local living wage was about $9 an hour.
"Every worker employed full time deserves to earn enough to afford to live without assistance, whether by the state or federal government, family or friends, or taking on a personal debt," Diamond said at the July 14 meeting, as reported by The Olympian.
The council unanimously adopted a phased plan in July to study worker protections and affordability. Staff is scheduled to return with policy options, potentially including a local minimum wage, in the first quarter of 2027.
What employers should do now
L&I requires employers to post updated wage notices in the workplace. The 2027 announcement poster is available in English, Spanish and Korean on the L&I website.
Employers also cannot count tips toward the hourly minimum under state law.
