Every hourly worker in Tacoma will see a bigger paycheck starting Jan. 1, 2027, when Washington's minimum wage rises to $17.73 an hour.

The 60-cent increase, from the current $17.13, amounts to a 3.5% raise and keeps Washington's rate the highest of any state, according to the state Department of Labor and Industries. The federal minimum wage remains $7.25.

State law requires L&I to adjust the rate each year based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), a federal inflation measure. The agency announced the new figure on Wednesday, Sept. 30.

Overtime thresholds jump too

The wage increase also pushes up the salary floors that determine which workers qualify for overtime pay.

Starting Jan. 1, a salaried employee at a company with 51 or more workers must earn at least $92,196 a year to be exempt from overtime. That is up from $80,168.40 in 2026, according to an L&I salary threshold publication. The threshold equals 2.5 times the minimum wage for a 40-hour week.

Small employers with one to 50 workers face a lower but still rising bar: $82,976.40 a year, or 2.25 times the minimum wage.

The shift means some salaried managers and supervisors who were previously exempt will now be entitled to overtime unless their employers raise their pay above the new thresholds.

Tacoma council weighs going higher

Tacoma does not set its own local minimum wage. Several other Washington cities do. Seattle's rate will climb to $22.14 an hour in 2027, and cities including Tukwila, Renton, Bellingham and Burien also exceed the state floor.

That gap has fueled a separate push in Tacoma. Deputy Mayor Joe Bushnell told The News Tribune on Sept. 16 that he is developing a local minimum-wage proposal. "I do intend on trying to get this looked at and considered before the end of the year by the City Council," Bushnell said in September.

Options the council's Economic Development Committee has discussed include an immediate jump to $20 an hour, gradual increases, or a rate set somewhere above the state minimum, according to Tacoma Weekly.

Meanwhile, UFCW Local 367's "Worker's Bill of Rights" ballot measure, which proposed a $20 minimum wage and stronger worker protections, remains tied up in court. A state Court of Appeals panel heard oral arguments on Sept. 15, and a decision is expected within 180 days, The News Tribune reported.

Industry pressure

Statewide, restaurant and hotel operators say the rising wage floor compounds other cost increases. Anthony Anton, president and CEO of the Washington Hospitality Association, said in a Wednesday, Sept. 30 statement to KIRO 7 that labor costs in the industry now exceed 40% and that rent, utilities and insurance have further squeezed margins for many operators. Anton's remarks were directed at Seattle's higher rate, but the association represents employers across Washington, including Tacoma.

Workers ages 14 and 15 may be paid 85% of the minimum wage. In 2027, that rate will be $15.07 an hour.

The new wage and overtime thresholds take effect Jan. 1, 2027.