Employers in 2017 should be particularly attentive to hourly minimum-wage changes, as well as other wage and hour developments, because of recent developments that may introduce complicating factors. Employers in California, New York and Oregon may encounter some of the more noteworthy complications.
By Jan. 1, 2017, 19 states are to raise their hourly minimum wage rates, and two states and the District of Columbia are to join them July 1, 2017. Nevada typically announces in early April any wage increase that is to take effect July 1.
Employers in California, New York and Oregon should be aware of the range of hourly minimum wages enacted under 2016 legislation. Changes are to take effect Jan. 1, 2017, in California and Dec. 31, 2016, in New York. Oregon, which enacted changes in July 2016, is to further increase the minimum wage July 1, 2017. Employers in these states are to ensure that they apply the correct minimum wage based on the employer’s size and where their employees perform work.
In California, for example, the hourly minimum wage that takes effect in 2017 depends on whether a business has at least 26 employees ($10.50) or fewer than 26 employees ($10), but where those workers are based also may be relevant because many California localities have living wages equal to or greater than the state’s minimum wage. Employers must ensure they are paying the hourly minimum wage that is most protective of workers.
Arizona, Maine, Maryland, Missouri and Washington also are to raise 2017 hourly minimum wages, and they also have localities with their own minimum wages.
California uses the state minimum wage as the basis for calculating statutory exemptions for creditor garnishments. Effective July 1, 2016, to identify how much may be levied from an employee’s weekly disposable earnings under an income withholding order, an employer must calculate two amounts and levy the lesser amount. The amount that would equal 25 percent of the weekly disposable earnings must be determined. Additionally, the employer must calculate 50 percent of the amount of weekly disposable earnings that exceeds 40 times the state or local hourly minimum wage, whichever is higher.
Effective Dec. 31, 2016, New York employers are to determine the appropriate hourly minimum wage based on their size, as well as their location. New York City employers with at least 11 employees are to pay $11 and those with fewer than 11 employees are to pay $10.50, employers in Nassau, Suffolk and Westchester counties are to pay $10 and employers in the rest of the state are to pay $9.70. Employers of fast-food workers in New York City are to pay $12 and employers of fast-food workers in the rest of the state are to pay $10.75.
Employers in New York with multiple locations are to identify where employees perform their work to identify the appropriate minimum wage they are to be paid. Employers also should be prepared to adjust the statutory exemptions on income withholding orders.
New York state exempts disposable income that is less than 30 times the state or federal minimum wage for garnishments. So, hourly minimum wage increases are to be accompanied by increases in the statutory exemption.
Colorado, Connecticut and Massachusetts also are to raise 2017 hourly minimum wages that use the state minimum wage as a basis for calculating statutory exemptions.
Colorado, which is to raise its hourly minimum wage to $9.30, requires that garnishments apply the statutory exemption at 30 times the state or federal minimum wage, depending on which provides the greatest benefit to the worker.
Connecticut, which is to raise its hourly minimum wage to $10.10, uses for its statutory exemption 40 times the state minimum wage.
Massachusetts, which is to raise its hourly minimum wage to $11, applies a statutory exemption 50 times the greater of the state or federal ($7.25) minimum wage.
Oregon is to increase its hourly minimum wages on Jan. 1, 2017, based on the employer’s location in one of three regions--a standard location, the Portland metro area and certain nonurban counties.
In June 2016, however, Oregon issued administrative guidance to help employers determine which of the three regional minimum-wage rates to apply to employees based on where the employees perform work.
The 2017 wage increases that employers are to experience stem from annual inflation-related adjustments, legislation enacted in 2014 and 2016 and approved ballot initiatives.
However, employers also are to be affected by a range of wage-and-hour developments that occurred in 2016.
For example, starting in May 2017, employers in Pennsylvania may pay workers by payroll card. Employers in New York have new requirements governing wage payment by payroll card. As of August 2016, employers in Pennsylvania now pay a one-time $50 administrative fee on support orders, a change from the previous 2 percent fee. In South Dakota, as of November 2016, employers no longer may pay workers younger than 18 a youth minimum wage.
Existing law in Ohio, Oklahoma, Minnesota, Montana and Nevada also provide for a minimum wage that depends on employer size or the provision of health-care benefits.
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