Payroll costs will rise for many Washington employers in 2005, the result of a minimum-wage boost and a workers' compensation rate increase. The state's hourly minimum wage jumps...

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Payroll costs will rise for many Washington employers in 2005, the result of a minimum-wage boost and a workers’ compensation rate increase.

The state’s hourly minimum wage jumps to $7.35 Jan. 1, the highest in the country. Workers’ compensation rates, meanwhile, will increase an average of 3.7 percent.

Workers’ comp rates will vary depending on the employer’s industry and injury record. Residential wood framers, for example, could pay anywhere from 79 cents to $5.96 an hour per employee, according to the state Department of Labor and Industries, which manages the workers’ compensation system covering about 1.9 million employees.

The increases will raise an additional $52 million to cover cost-of-living increases and rising health-care costs, the state says.

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Business groups such as the Washington State Hotel & Lodging Association are expected to step up their lobbying efforts against both workers’ comp and minimum-wage increases when the state Legislature reconvenes in January.

Washington’s minimum wage will rise 19 cents over last year’s $7.16 an hour. The new wage rate is nearly 43 percent more than in 1998, when the state’s minimum matched the federal wage floor of $5.15 an hour.

Washington’s minimum wage is now calculated every September, the result of a 1998 voter initiative tying the wage to inflation. The federal Consumer Price Index (CPI-W) increased 2.6 percent from August 2003 to August 2004.

Washington is among 14 states whose minimum wage is higher than the federal rate, which has remained unchanged since 1997.

Oregon’s inflation-adjusted minimum rises to $7.25 an hour in January. Alaska has the third-highest minimum at $7.15 an hour, followed by Connecticut ($7.10) and Vermont ($7.00). Minimum wages in other states range from $6.15 an hour to $6.75.

Shirleen Holt: 206-464-8316 or sholt@seattletimes.com