Product Updates

2019 State Minimum Wage Increases

 

Preparing for a Minimum Wage Increase

 

It’s that time of year! Minimum wage increases will happen January 1, 2019 for SEVERAL states, which all have the minimum set higher than the Federal $7.25 requirement.   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. California state 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, 2019. 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 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, 2019
State Minimum Wage Change Eff. Jan 1, 2019 Planned Changes
Alaska Increase from $9.84 to $9.89 per hour Annual increases based on the % change in the CPI-U for Anchorage metropolitan area, Jan 1.
Arizona Increase from $10.50 to $11.00 per hour
(Not applicable to small businesses with less than $500,000 in annual gross revenue. Also, not applicable to state or federal employers.)		 $12.00 eff. 1/1/202.
Annual indexing begins January 1, 2021.
California For employers with 26 or more employees:
Increase from $11.00 to $12.00 per hour.
For employers with 25 or fewer employees:
Increase from $10.50 to $11.00 per hour.		 > 26 EE’s
$13.00 eff. 1-1-2020;
$14.00 eff. 1-1-2021;
$15.00 eff. 1-1-2022
< 26 EE’s
$12.00 eff. 1-1-2020;
$13.00 eff. 1-1-2021;
$14.00 eff. 1-1-2022;
$15.00 eff. 1-1-2023
Colorado Increase from $10.20 to $11.10 per hour $12.00 eff. 1-1-2020
Deleware Increase from $8.25 to $8.75 per hour $9.25, eff. 10-1-2019
$9.75, eff. 10-1-2020;
$10.25, eff. 10-1-2021;
Annual indexing begins January 1, 2021.
Dist. of Columbia Increase from $13.25 to $14.00 per hour $15.00 eff 7-1-2020
Annual indexing begins July 1, 2021.
Florida Increase from $8.25 to $8.46 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.
Maine Increase from $10.00 to $11.00 per hour $12.00 eff. 1-1-2020
Annual indexing begins January 1, 2021.
Massachusetts Increase from $11.00 to $12.00 per hour.
Note: The state minimum wage rate must be at least 10 cents higher than the federal minimum wage rate.		 $12.75 eff. 1-1-2020; $13.50 eff. 1-1-2021; $14.25 eff. 1-1-2022; $15.00 eff. 1-1-2023.
Michigan Increase from $9.25 to $10.00 per hour $10.65 eff. 1-1-2020
$11.35 eff. 1-1-2021
$12.00 eff. 1-1-2022
Adjusted for inflation eff. 1-1-2023.
Minnesota Large Emp. (>$500,000): Increase from $9.65 to $9.86 per hour. Small Emp.(<$500,000): Increase from $7.87 to $8.04 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 $7.85 to $8.60 per hour $9.45 eff. 1-1-2020;
$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 $8.30 to $8.50
Note: businesses with annual gross sales of $110,000 or less the minimum wage is $4 per hour.		 Annual indexing eff. January 1. 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 $8.60 to $8.85 per hour $8.05 to $8.15, eff. January 1, 2017
New York Increase from $10.40 to $11.10 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		 $11.80, eff. 12-31-2019; $12.50, eff. 12/31/2020.
Ohio Increase from $8.30 to $8.55 per hour Annual indexing eff. January 1. 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 $10.75 to $11.25 per hour $12.00, eff. 7/1/2020;
$12.75, eff. 7/1/2021; $13.50, eff. 7/1/2022.
Rhode Island Increase from $10.10 to $10.50 per hour No Updates
South Dakota Increase of $8.85 to $9.10 per hour Annual indexing eff. January 1. Increases based on the percentage change in the CPI, rounded to the nearest 5 cents.
Vermont Increase from $10.50 to $10.78 per hour The minimum wage increase will be indexed to inflation in subsequent years.
Washington Increase from $11.50 to $12.00 per hour $13.50 eff. 1-1-2020.

 

State and Local Minimum Wage Changes:

There are 42 localities that have adopted minimum wages above their state minimum wage. Please access any number of public resources available to monitor changes to the minimum wage rate at the county or city level.

 

Public Resources

  1. Economic Policy Institute Minimum Wage Tracker

2. SHRM Members Can access:  Minimum Wage Rates by State and Municipality