E-Alerts

2018 Brings Increases In State Minimum Wage Rates

February 5, 2018

As of January 1, 2018, many states have increased their minimum hourly wage rates, while minimum wage increases in a few other states will go into effect later this year. Employers operating in states affected by these increases should update their payroll practices and workplace posters accordingly.

Notably, for the first time in several years, the minimum wage rate in Massachusetts has not changed. At least for the time being, that rate remains $11.00 per hour. Likewise, the federal minimum wage rate (other than for employees working on covered federal contracts) remains $7.25 per hour.

New State Minimum Wage Rates

As of January 1, 2018, new minimum wage rates are in effect in the following states:

Alaska: $9.84 (up from $9.80).
Arizona: $10.50 (up from $10.00).
California: $11.00 (up from $10.50) for employers with 26 or more employees. For employers with 25 or fewer employees, the minimum wage rate is $10.50 (up from $10.00).
Colorado: $10.20 (up from $9.30).
Florida: $8.25 (up from $8.10).
Hawaii: $10.10 (up from $9.25).
Maine: $10.00 (up from $9.00).
Michigan: $9.25 (up from $8.90).
Minnesota: $9.65 (up from $9.50) for large employers (i.e., those with at least $500,000 in gross annual revenues); $7.87 (up from $7.75) for other employers.
Missouri: $7.85 (up from $7.70).
Montana: $8.30 (up from $8.15).
New Jersey: $8.60 (up from $8.44).
New York: $10.40 (up from $9.70).
Ohio: $8.30 (up from $8.15).
Rhode Island: $10.10 (up from $9.60).
South Dakota: $8.85 (up from $8.65).
Vermont: $10.50 (up from $10.00).
Washington: $11.50 (up from $11.00).

In a few other jurisdictions, minimum wage rates will increase later this year, as follows:

District of Columbia: $13.25 (up from $12.50), effective July 1, 2018.
Maryland: $10.10 (up from $9.25), effective July 1, 2018.
Oregon: Effective July 1, 2018, the minimum wage rate for employers in the Portland metropolitan area will increase from $11.25 to $12.00. For employers in non-urban counties, the minimum wage rate will rise from $10.00 to $10.50. Finally, for employers in the rest of Oregon, the minimum wage rate will rise from $10.25 to $10.75.

Municipal Minimum Wage Rates

In addition to state minimum wage rates, numerous cities, counties, and other municipalities have their own minimum wage rates, often exceeding the applicable state minimum wage rates.

In some municipalities, new minimum wage rates went into effect as of January 1, 2018. For instance, in New York City, employers that have 11 or more employees must now pay their workers at least $13.00 per hour, while for employers with fewer than 11 employees, the minimum wage rate is now $12.00 per hour. (Notably, fast food employees in New York City enjoy an even higher minimum wage rate -- $13.50 per hour.)

Similarly, in Seattle, employers with more than 500 employees must now pay a minimum wage rate of either $15.00 or $15.45, depending on whether they contribute toward employees' health insurance premiums. For organizations with 500 or fewer employees, the minimum wage rate is either $11.50 or $14.00, depending on that same contribution factor.
Many other municipalities also have their own minimum wage rates, so employers should be sure to confirm that their compensation practices are consistent with any local requirements.

Recommendations For Employers

In light of these developments, employers are advised to:

Update their payroll practices as necessary to comply with recent and upcoming increases in minimum wage rates;
Ensure that current versions of all required workplace posters relating to minimum wage rates and other employment matters are displayed in the appropriate locations;
Carefully review all written job descriptions to ensure that employees are appropriately classified as exempt or non-exempt, and that workers are not improperly treated as independent contractors rather than employees; and
Continue to monitor developments at the federal, state, and local levels regarding minimum wage rates.

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Please feel free to contact us if you have any questions regarding recent increases in minimum wage rates or any other wage-and-hour issues.