OnePoint Human Capital Management Blog

2020 State Minimum Wage Increases

Written by onepoint-admin | Dec 16, 2019 11:27:26 PM

 

Preparing for a 2020 Minimum Wage Increase

 

It's that time of year! Minimum wage increases will happen January 1, 2020 for SEVERAL states, which all have the minimum set higher than the Federal $7.25 level.   In preparation for the increases, review the rate table and perform a basic compensation analysis for other wage scenarios to avoid potential wage and hour risk.

 

Perform a Compensation Analysis

  1. Re-Calculate exempt employees salary requirements.  To ensure it meets California state exempt employee salary requirements after the minimum wage increase. * Note: this is a CA state requirement for exempt employees. City Ordinances do not apply to the state salary threshold obligations. The state of California obligates employers to pay at least two times the state minimum wage for exempt employees. When state minimum wage increases, so must this salary threshold for exempt employees.
  2. Review Overtime/double-time and other pay calculations. Make sure they reflect all changes and amendments to the wage and hour laws (state and federal) effective January 1, 2020. Overtime/double-time, meal periods, weighted average and regular rates of pay for blended rates, etc.
  3. Adjust the minimum wage threshold for piece-rate, commission or other complex wage calculations.
    Do not forget about the employees paid in alternative methods, for example, piece-rate, commission, bonuses etc. All non exempt employees, no matter the method and complex wage calculations performed, must earn at least the federal, state or local ordinance minimum wage requirement for all hours worked including overtime (if applicable according to hours worked).

 

How Can OnePoint Help?

Working with OnePoint puts all of your employee data, time and attendance and wage history in one place. Real-time system updates makes it easier perform wage audits faster and more accurately to stay compliant. Quick compensation rate reports provide current compensation rates for each of your employees. Run the base compensation history report and apply a filter to only display current rates to quickly verify pay rates.

 

 

Increases Scheduled for January 1, 2020
State Minimum Wage Change Eff. Jan 1, 2020 Planned Changes
Alaska Increase from $9.89 to 10.19 per hour Annual increases based on the % change in the CPI-U for Anchorage metropolitan area, Jan 1.
Arizona Increase from $11.00 to $12.00 per hour
(Not applicable to small businesses with less than $500,000 in annual gross revenue. Also, not applicable to state or federal employers.)		 Annual indexing begins Jan 1, 2021.
Arkansas

Increase from $9.25 to 10.00 per hour

 Ballot measure Issue 5 also approved an increase to $12.00 Jan 1, 2021.
California

For employers with 26 or more employees:
Increase from $12.00 to $13.00 per hour.

For employers with 25 or fewer employees:
Increase from $11 to $12.00 per hour.

 > 26 EE’s
$14.00 eff. 1-1-2021;
$15.00 eff. 1-1-2022
< 26 EE’s
$13.00 eff. 1-1-2021;
$14.00 eff. 1-1-2022;
$15.00 eff. 1-1-2023
Colorado Increase from $11.10 to $12.00 per hour Annual indexing begins Jan 1, 2021.
Connecticut Increase from $11.00 to $12.00, effective September 1, 2020

Upcoming increases:

$13.00, effective August 1, 2021
$14.00, effective July 1, 2022
$15.00, effective June 1, 2023
Annual indexing begins Jan 1, 2024.
Delaware Increase from $8.75 to $9.25 per hour. $9.75, eff. 10-1-2020;
$10.25, eff. 10-1-2021;
Annual indexing begins January 1, 2021.
Dist. of Columbia Increase from $14 to $15.00 per hour effective July, 1, 2020. Annual indexing begins July 1, 2021.
Florida Increase from $8.46 to $8.56 per hour The state Agency for Workforce Innovation will increase the rate each year on September 30 by the rate of inflation during the 12 months prior.
Illinois Increase from $8.25 to $9.25 per hour Illinois’s minimum wage law sets a lower minimum wage for workers under age 18 for their first 650 hours of work with any employer. The minimum wage for these workers is: $8.00, effective Jan 1, 2020.
Maine Increase from $11.00 to $12.00 per hour Annual indexing begins Jan 1, 2021.
Maryland

Employers with 15 or more employees $10.10 to $11.00 per hour

New small employee pay schedule for employers with 14 or less employees will pay a minimum wage of $11.00 per hour

On Jan 1, 2020 Maryland will implement different rate schedules for large and small employers. (Large being 15 or more workers and small defined as 14 or fewer.)

Read more about the change at Maryland DOL
Massachusetts Increase from $12.00 to $12.75 per hour.
Note: The state minimum wage rate must be at least 10 cents higher than the federal minimum wage rate.

$13.50 eff. 1-1-2021;

$14.25 eff. 1-1-2022;

$15.00 eff. 1-1-2023.

 
Michigan Increase from $9.45 to $9.65 per hour $9.87, effective January 1, 2021
$10.10, effective January 1, 2022
$10.33, effective January 1, 2023
Minnesota

Large Emp. (>$500,000 in revenues): Increase from $9.65 to $10.00 per hour.

Small Emp.(<$500,000 in revenues): Increase from $7 to $8.15 per hour.

 Annual indexing eff. January 1. Increases based on the August-to-August percentage change in the price deflator for national personal consumption expenditures (PCE), with a maximum increase of 2.5 percent, beginning January 1, 2018.
Missouri Increase from $8.60 to $9.45 per hour

See Missouri Proposition B:

Upcoming increases:

$10.30 eff. 1-1-2021;
$11.15 eff. 1-1-2022;
$12.00 eff. 1-1-2023;
Adjusted for inflation 1/1/2024 and every January 1 thereafter.
Montana Increase from $8.50 to $8.65
Note: Minimum wage of $4.00 applies to all businesses that have gross annual sales less than $110,000 and that are not covered by the Fair Labor Standards Act.		 Annual indexing eff. Jan, 2019. Increases based on the August-to-August percentage change in the CPI-U, U.S. city average, rounded to the nearest 5 cents.
New Jersey Increase from $10.00 to $11.00 per hour

Annual increases based on the August-August CPI or at least $1, whichever is greater. (The rate will hit $15 for most employers in 2024.)

New Jersey rates by employer type
New Mexico Increase from $7.50 to $9.00 per hour

New Mexico passed new minimum wage legislation in 2019.

Upcoming increases:                  $10.50, effective Jan 1, 2021
$11.50, effective Jan 1, 2022
$12.00, effective Jan 1, 2023
New York Increase from $11.10 to $11.80 per hour
NOTE: Indexed schedule (to reach but not exceed $15.00 per hour) to be set by the Director of the Division of Budget in consultation with the Department of Labor		 $12.50, eff. 12/31/2020.
Annual indexing starting Dec 31, 2021 to be determined on a year-to-year basis.
Nevada Increase from $8.25 to $9.00, effective July 1, 2020

Upcoming increases:

$9.75, effective July 1, 2021
$10.50, effective July 1, 2022
$11.25, effective July 1, 2023
$12.00, effective July 1, 2024
Ohio 2020 index rates:

$8.70 for large employers

$7.25 for small employers (the federal rate)

 Annual indexing began Jan 1. 2020. Increases based on the August-to-August percentage change in the CPI-W U.S., city average, rounded to nearest 5 cents.
Oregon Increase from $11.25 to $12.00 per hour

Annual increases based on the March-to-March change in the CPI-U, U.S. city average, rounded to nearest 5 cents.

Upcoming increases:
$12.75, eff. 7/1/2021;

$13.50, eff. 7/1/2022.
South Dakota Increase of $9.10 to $9.30 per hour Annual indexing began Jan 1, 2019. Increases based on the percentage change in the CPI, rounded to the nearest 5 cents.
Vermont Increase from $10.78 to $10.96 per hour Annual Indexing was revised starting Jan 1, 2019. Annual increases determined as the smaller of 5 percent of the current minimum, or the August-to-August percentage change in the CPI-U, U.S. city average.
Washington Increase from $12.00 to $13.50 per hour Annual indexing effecting Jan 1, 2021. Annual increases based on the August-to-August percentage change in the CPI-W, U.S. city average, beginning January 1, 2021.

 

Minimum Wage Changes

The state minimum wage rates discussed in this blog do not include county and city minimum wage rates. Also, this blog only covers updates from December 31, 2019 through July 2020 for states only.

This intended for market awareness only, it is not to be used for legal advice or counsel. Please access any number of public resources available to monitor changes to the minimum wage rate at the county or city level.

 

Public Resources


 
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