Washington passed legislation regulating employee non-compete agreements, which went into effect at the start of 2020. One of the key provisions in this legislation is the earnings threshold. The non-compete statute nullifies non-compete agreements agreements for employees and contractors unless their earnings exceed certain statutory thresholds.
Related: Washington’s New 2020 Non-Compete Law
In 2020, when the law first went into effect, the statutory earnings threshold for employees was $100,000, while the threshold for contractors was $250,000. However, the statute specifies that these dollar amounts must be adjusted annually for inflation. The Washington State Department of Labor & Industries (L&I) was tasked with making this annual adjustment, which it did for 2021 increasing the employee threshold to $101,390 and the contractor threshold to $253,475.
L&I recently released its adjustments for 2022 here (spoiler alert: there’s been inflation). The 2022 threshold for employees will increase from $101,390 in 2021 to $107,301.04, meaning that an employee’s annual earnings from its employer must exceed $107,301.04 for 2022 in order for a non-compete to be enforceable against the employee. In addition, the 2022 threshold for contractors will increase from $253,475 in 2021 to $268,252.59 in 2022, meaning that a contractor’s annual earnings from the party it contracts with must exceed $268,252.59 in order for a non-compete to be enforceable against the contractor.
