Washington’s minimum wage will climb to $16.66 an hour next year, a 38-cent-an-hour increase, the state Department of Labor & Industries announced Monday.

The change will take effect on Jan. 1, 2025.

Washington’s current rate, $16.28 an hour, is the highest state-level minimum wage in the nation. The federal minimum wage is $7.25 an hour.

Cities can set minimum wages higher than the state. Seattle, SeaTac, Tukwila, Renton, Bellingham and Burien all will have higher wages in 2025.

Washington recalibrates the hourly wage each year.

The Department of Labor & Industries calculates it using the federal Bureau of Labor Statistics’ Consumer Price Index for Urban Wage Earners and Clerical Workers. Agency staff compare the index figures from August of the previous year with August of the current year. The analysis led to a 2.35% increase for 2025.

The state minimum wage applies to workers ages 16 and older. Washington law allows employers to pay 85% of the minimum wage to workers ages 14 and 15. Next year, the wage for younger workers will be $14.16 per hour.

Also, in 2025, drivers for rideshare companies like Lyft and Uber will see a slight income boost.

For trips within Seattle in 2025, drivers will earn 68 cents per passenger platform minute and $1.59 per passenger platform mile, or $5.95, whichever is greater. Today, the rates are 66 cents per passenger platform minute and $1.55 per passenger platform mile, or $5.81 per dispatched trip, whichever is greater.

For trips outside of Seattle in 2025, drivers will earn 39 cents per passenger platform minute and $1.34 per passenger platform mile, or $3.45, whichever is greater. Today, they earn 38 cents a passenger platform minute plus $1.31 per passenger platform mile, or a minimum of $3.37.

The state agency also uses consumer price index data to reset the minimum annual salary threshold for a non-compete clause or contract to be enforceable. Typically, a non-compete agreement prevents an employee or independent contractor from working for a competitor or starting a similar business while employed or after leaving their current job.

In Washington, non-compete agreements are valid only when the employee or independent contractor earns at least a set amount. For employees in 2025, the threshold will be $123,394.17, up from $120,599.99. For independent contractors, the 2025 threshold will be $308,485.43, a bump up from $301,399.98.

Jerry Cornfield writes for the Washington State Standard, an independent, nonprofit news organization that produces original reporting on policy and politics.