Washington State Payroll Laws: What Companies Should Know

Processing payroll in Washington State has many components. Before starting to pay employees in the state, you must consider several areas of Washington State Payroll Law, including the minimum wage, overtime, allowed deductions, payroll tax, final and overpayments, and more.

Washington State Payroll Laws and Processing for 2024 / 2025

Understanding federal, state, and even local payroll laws in places like Seattle is crucial in avoiding disputes with employees and the government. Keep in mind that if you do not have the resources or bandwidth to understand the legislation or comply with it, a Washington State payroll company might be right for you.

Here is basic payroll knowledge you need to know before processing payroll in Washington State, in regards to Washington Labor Laws.

Salary Laws in Washington State

In areas outside of Seattle, SeaTac, and Tukwila Washington State Minimum Wage is $16.28 per hour, effective as of 01/01/2024. Employees must be compensated in compliance with state minimum wage law for all hours worked in Washington State.

Important to note is that Washington State minimum wage updates yearly, so ensuring you have a way to manage payroll compliance is crucial.

Special Rules Regarding Minimum Wage

Important to be aware of if you operate a business in Washington State, is that there are special local minimum wage laws, as well as exceptions and special rates.

In general, businesses need to be aware of these additional rules regarding Washington State Minimum Wage:

• Exemptions to WA Minimum Wage
• Seattle Local Minimum Wage
• SeaTac Local Minimum Wage
• Tukwila Local Minimum Wage
• Special Wage Rate for Minors

Pay Transparency

It is also crucial that employers ensure they are in compliance with Washington State Pay Transparency Law. 

Washington Pay Transparency mandates that employers be transparent regarding compensation listed in a job application. The law also outlines certain other requirements for listings, such as benefits. 

Overtime Pay in Washington

Under Washington State Overtime Pay Rules, employees who worked in excess of 40 in a week must be compensated at a rate of 1 ½ times the employee’s regular rate of pay for all hours worked over 40.

It is also important that businesses understand the FLSA requirements for overtime, including the federal overtime-exempt salary threshold and any state differences.

While it may seem straightforward, overtime miscalculations are one of the most common payroll errors an organization can make.

Paycheck Deductions in Washington State

When it comes to deductions from an employee's wages, employers may typically withhold pay from an employee in the following instances: 

• It is required by another law
• It is necessary to cover medical care
• It is in order to satisfy a court order, judgment, wage attachment, trustee process, bankruptcy proceeding, or payroll deduction notice for child support payments

However, with consent, an employer may deduct pay from an employee's wages for the following reasons: 

• Court-ordered wage garnishments
• Deductions that benefit the employee, this agreement must be in writing (Final paychecks can have an oral agreement)
• Deductions for medical, surgical, or hospital care or service (that are not necessary)

Employers may also make deductions regarding Washington Payroll Taxes.

Lastly, it is important for employers to note they may not deduct pay from an employee's wages for any of the following reasons: 

• The deduction is meant to be a reimbursement for a customer's bad check or credit card
• A result of a cash register shortage – even when an employee counts their till at the beginning and end of their shift, has sole access to the cash register, and is short at the end of the shift
• Customer walk-outs, theft, or unpaid bills
• Damages or loss of company equipment

Special Rules Regarding Deductions

Washington State employers must also be aware of rules regarding a deduction from final wages, as well as corrections for overpayments. 

Final Pay in Washington State

Under Washington State Final Pay, any employees that are terminated must be compensated for their final wages on the next regularly scheduled payday.

There is no law requiring payment of unused benefits, however, employers must adhere to any policies within their employee handbook. For help with payment of unused benefits and other employee handbook policies, contact a Washington Human Resources Provider.

As a reminder, under Washington State At-Will Employment employers may generally fire or terminate employees without reason or notice.

Washington State Pay Schedule Rules

Generally, Washington state employers must pay workers at least once a month, on regularly designated paydays. 

WA State Paydays

Washington State businesses that are choosing a pay frequency should / may: 

• Include wages for work performed by an employee during the last 7 days of the pay period on the paycheck of the following pay period, if the employer pays employees monthly. 
• Decide to pay employees multiple times a month, in which case payments must be made within 10 days of the end of the pay period.
• Employ salespeople, who must be paid for all money earned (including commission) within 30 days of the employer’s receipt of payment

Leveraging a Washington Payroll Solution can be of great help when it comes to ensuring compliance with pay schedule laws. 

Choosing the Right Payroll Software

While selecting a local provider that knows your business compliance and the needs presented by your area of operation, it's still just as if not more important to pick the right solution. 

When selecting the right payroll software for your business, there are certain things you'll want to look for. Most importantly, the ability to tailor the solution to the exact needs of your business. Payroll and HR software should never be one-size-fits-all.

Finding a solution that also protects against things such as payroll fraud and direct deposit scams is crucial, as such employee spoofing attempts become more and more common with increases in modern technology.

Washington Payroll Services in Seattle

While there is certainly much to understand regarding processing payroll in Washington State, there's no better way to make it easy on your business than going to Washington State Payroll company for help. 

PayNW's leading Washington State payroll solution can help streamline payroll processing, allowing you to focus on more strategic parts of your business. Our solution also allows you to process paperless payroll, providing electronic pay options and more.

Watch our payroll demo video below to learn more about how our payroll software can help you process payroll in Washington.