E-Alerts

2020 Brings Increases In State Minimum Wage Rates

January 14, 2020 by Jacqueline M. Fogg

As of January 1, 2020, Massachusetts and numerous other states have increased their minimum hourly wage rates. In a few other states, minimum wage increases will go into effect later this year.

Employers operating in states affected by these increases should update their payroll practices and workplace posters accordingly.

New State Minimum Wage Rates

Effective January 1, 2020, the Massachusetts minimum wage rate has increased from $12.00 to $12.75 per hour.

New minimum wage rates also took effect on January 1, 2020 in the following states:

Alaska: $10.19 (up from $9.89).
Arizona: $12.00 (up from $11.00).
Arkansas: $10.00 (up from $9.25).
California: $13.00 (up from $12.00) for employers with 26 or more employees. For employers with 25 or fewer employees, the new minimum wage rate is $12.00 (up from $11.00).
Colorado: $12.00 (up from $11.10).
Delaware: $9.25 (up from $8.75).
Florida: $8.56 (up from $8.46).
Illinois: $9.25 (up from $8.25).
Maine: $12.00 (up from $11.00).
Maryland: $11.00 (up from $10.10).
Michigan: $9.65 (up from $9.45).
Minnesota: $10.00 (up from $9.86) for employers with at least $500,000 in gross annual revenues; $8.15 (up from $8.04) for smaller employers.
Missouri: $9.45 (up from $8.60).
Montana: $8.65 (up from $8.50).
New Jersey: $11.00 (up from $8.85).
New Mexico: $9.00 (up from $7.50).
New York: $11.80 (up from $11.10).
Ohio: $8.70 (up from $8.55).
South Dakota: $9.30 (up from $9.10).
Vermont: $10.96 (up from $10.78).
Washington: $13.50 (up from $12.00).

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

Connecticut: $12.00 (up from $11.00), effective September 1, 2020.
District of Columbia: $15.00 (up from $14.00), effective July 1, 2020.
Illinois: $10.00 (up from $9.25), effective July 1, 2020.
Nevada: Either $8.00 or $9.00, effective July 1, 2020, depending on whether an employer offers health benefits.

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 December 31, 2019. For instance, in New York City, all employers, regardless of size, must now pay their workers at least $15.00 (up from $13.50) per hour. The minimum wage in the adjacent New York counties of Nassau, Suffolk, and Westchester has increased from $12.00 to $13.00.

Similarly, in Seattle, employers with more than 500 employees must now pay a minimum wage rate of $16.39. For organizations with 500 or fewer employees, the minimum wage rate is either $13.50 or $15.75, depending on whether the employer contributes toward employees' health insurance premiums.

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.

Future Increase To Federal Rate?

For now, the federal minimum wage rate (other than for employees working on covered federal contracts) remains $7.25 per hour.

In January 2019, the proposed Raise the Wage Act, which would increase the federal minimum wage to $15.00 per hour by 2024, was introduced in the House of Representatives. The House passed the bill in July, but it then stalled in the Senate. House Democrats, however, have pledged to continue to focus on raising the federal minimum wage from its current level.

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 municipal levels regarding minimum wage rates.

***

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.