E-Alerts

Ring In The New Year - And Increases In State Minimum Wage Rates

January 3, 2019 by Jacqueline M. Fogg

As of January 1, 2019, a number of states - including Massachusetts - have increased their minimum hourly wage rates. In several 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.

For now, the federal minimum wage rate (other than for employees working on covered federal contracts) remains $7.25 per hour. This may change, however, with control of the House of Representatives about to pass to the Democrats, who have said that they intend to focus on raising the federal minimum wage, to as high as $15.00 per hour. In addition, many states and municipalities have expressed support for a $15.00 per hour minimum wage and have passed their own laws gradually increasing local minimum wage rates to this level.

New State Minimum Wage Rates

Effective January 1, 2019, the Massachusetts minimum wage rate has increased from $11.00 to $12.00 per hour. This is the first of a number of gradual increases provided for in legislation signed by Governor Baker this past June, which will eventually raise the state minimum wage to $15.00 per hour by 2023.

New minimum wage rates also took effect on January 1, 2019 in the following states:

Alaska: $9.89 (up from $9.84).
Arizona: $11.00 (up from $10.50).
Arkansas: $9.25 (up from $8.50).
California: $12.00 (up from $11.00) for employers with 26 or more employees. For employers with 25 or fewer employees, the new minimum wage rate is $11.00 (up from $10.50).
Colorado: $11.10 (up from $10.20).
Florida: $8.46 (up from $8.25).
Maine: $11.00 (up from $10.00).
Minnesota: $9.86 (up from $9.65) for large employers (i.e., those with at least $500,000 in gross annual revenues); $8.04 (up from $7.87) for other employers.
Missouri: $8.60 (up from $7.85).
Montana: $8.50 (up from $8.30).
New Jersey: $8.85 (up from $8.60).
New York: $11.10 (up from $10.40).
Ohio: $8.55 (up from $8.30).
Rhode Island: $10.50 (up from $10.10).
South Dakota: $9.10 (up from $8.85).
Vermont: $10.78 (up from $10.50).
Washington: $12.00 (up from $11.50).

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

District of Columbia: $14.00 (up from $13.25), effective July 1, 2019.
Oregon: Effective July 1, 2019, the minimum wage rate for employers in the Portland metropolitan area will increase from $12.00 to $12.50. For employers in non-urban counties, the minimum wage rate will rise from $10.50 to $11.00. Finally, for employers in the rest of Oregon, the minimum wage rate will rise from $10.75 to $11.25.

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, 2018. For instance, in New York City, employers that have 11 or more employees must now pay their workers at least $15.00 (up from $13.00) per hour, while for employers with fewer than 11 employees, the minimum wage rate is now $13.50 (up from $12.00) per hour. (Notably, fast food employees in New York City now enjoy an even higher minimum wage rate - $15.00, up from $13.50 per hour.) The minimum wage in the New York counties of Nassau, Suffolk, and Westchester has increased from $11.00 to $12.00.

Similarly, in Seattle, employers with more than 500 employees must now pay a minimum wage rate of $16.00. For organizations with 500 or fewer employees, the minimum wage rate is either $12.00 or $15.00, depending on whether they contribute 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.

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.