Posted By PayNW August 09, 2023
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 2023
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 everything you need to know before processing payroll in Washington State, in regards to Washington Labor Laws.
Minimum Wage in Washington State
In areas outside of Seattle and SeaTac, the minimum wage for Washington State is currently $15.74 per hour, as of 01/01/2023.
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
- Special Wage Rate for Minors
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.
Washington State Payroll Taxes and Wage Deductions
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)
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.
Washington State Pay Schedule Rules
Generally, Washington state employers must pay workers at least once a month, on regularly designated 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.