Employers must ensure that they comply with federal, state, and local minimum wage laws. While the federal minimum wage ($7.25 per hour) isn’t changing next year, many other jurisdictions will have new minimum wage rates beginning in 2019. Below is a summary of these changes and guidelines to help you comply with minimum wage requirements.
$9.20 per hour. $8.20 per hour for employers that provide employees with healthcare and/or childcare benefits of at least $2,500 per employee per year.
$12.00 per hour for employers with 26 or more employees and $11.00 per hour for employers with 25 or fewer employees.
San Jose, CA: $15 per hour.
San Diego, CA: $12 per hour.
Oakland, CA: The city adjusts its minimum wage annually for inflation, but hasn’t announced the 2019 rate yet.
The minimum wage is scheduled to increase to $10.00 per hour. However, the increase may be delayed until on or around April 1, 2019. Continue to watch closely for developments.
$9.86 per hour for employers with annual gross revenue of $500,000 or more and $8.04 per hour for smaller employers.
New York (effective December 31, 2017)
New York City: $15.00 per hour (11 or more employees); $13.50 per hour (10 or fewer employees)
Nassau, Suffolk and Westchester Counties: $12.00 per hour
Rest of the state: $11.10 per hour
Fast food employees (NYC): $15.00 per hour
Fast food employees (Rest of the state): $12.75 per hour
$12.00 per hour.
Seattle, WA: Employers with 500 or fewer employees must pay non-exempt employees at least $15.00 per hour. Smaller employers can meet this requirement by paying no less than $12.00 per hour in wages and contributing at least $3.00 per hour toward an employee’s medical benefits and/or reported tips. For employers with more than 500 workers worldwide, the minimum wage increases to $16.00 per hour.
Tacoma, WA: The city adjusts its minimum wage annually for inflation, but hasn’t announced the 2019 rate yet.
More 2019 Increases Coming:
The minimum wage changes noted above won’t be the last in 2019. Some states and local jurisdictions schedule their changes for July 1 or at another point during the year. Keep an eye out for changes throughout the year.
Multiple Minimum Wage Rates:
If an employee is subject to more than one minimum wage requirement (such as federal, state, and local), you should comply with the rate most generous to the employee. For example, if your state minimum wage is $10.00 and the local minimum wage is $11.00, you must generally pay the employee at least $11.00 per hour, since it is higher than the state and federal minimum wage rates. Additionally, if your business is located in one state, but you have employees (such as remote workers) working in another jurisdiction, the minimum wage in the location where the employee performs work generally applies.
Note: Although coverage may vary by jurisdiction, state and local minimum wage laws typically apply to almost all employers and employees. However, some requirements only apply to businesses of a certain size, or employees who perform a certain number of work hours in that jurisdiction. Check your state and local law for details.
Most jurisdictions require employers to post an up-to-date minimum wage notice in the workplace. State and federal posters are available for download in the State & Federal Resources section of HR411®. ADP clients with the Labor Law Poster Compliance Update Service receive updated posters automatically.
Employees Earning More than the Minimum Wage:
When the minimum wage increases, some employers wonder if they should also provide a raise to employees already earning equal to or more than the new rate. For example, if the minimum wage increases from $9 per hour to $10 per hour, should an employee already earning $10 per hour also get a raise? While the employer is under no obligation to provide a raise, some employees may be expecting one. Consider the potential impact on labor costs, employee morale, internal equity (how employees are paid when compared with other employees within your company based on skills and experience), and your typical merit increase schedule.
Potential Impacts on Overtime Exemptions:
In some states, including Alaska, California, Colorado, Maine, and New York, the minimum salary required to be classified as exempt from overtime is tied to the minimum wage. For example, both California and Alaska require employers to pay a salary of at least twice the minimum wage to bona fide administrative, professional, and executive employees. Therefore, the new minimum wage in Alaska means that the minimum salary required for these exemptions under state law will increase to $791.20 per week on January 1, 2019. As a result of the new minimum wage, California employers with 26 or more employees must pay a salary of at least $960 per week for these exemptions beginning January 1, 2019. California employers with fewer than 26 employees must pay a minimum salary of at least $880 for these exemptions.
Note: State and federal law require that certain duties tests also be satisfied to qualify for exemption from overtime.
Ensure that you understand the minimum wage rules that apply to your employees and make any necessary changes in RUN Powered by ADP® before January 1, 2019 (December 31, 2018 in New York). Additionally, be sure to post updated minimum wage notices in each work location.