Looking Ahead: New Minimum Wage Rates


The announcement by several state labor departments whether their state is to raise its minimum wage in the new year is a much-anticipated autumn ritual that payroll professionals look to for guidance to prepare for the year ahead.

Minnesota announced its 2018 hourly minimum wage adjustments in August. Its hourly minimum wage is to increase Jan. 1, 2018, to $9.65 from $9.50 for large employers having annual gross revenue of at least $500,000 and to $7.87 from $7.75 for small employers having annual gross revenue of less than $500,000, the Department of Labor and Industry said Aug. 17.

Minnesota’s $7.87 minimum wage also is to apply as the youth wage for employees who are younger than 18 and for the training wage, which may be paid to workers younger than 20 for the first 90 days of employment.

The state’s hourly minimum wage is indexed for inflation, effective Jan. 1, 2018, under a bill (H.F. 2091), signed April 14, 2014, by Gov. Mark Dayton (D), which requires the updated minimum wage to be announced annually by Aug. 31.

Florida, Montana, New Jersey, Ohio, and South Dakota are expected to issue announcements from late September to mid-October. Missouri typically announces its updated hourly minimum wage in November.

However, using statutory requirements and newly released Bureau of Labor Statistics data that became available Aug. 11 and Sept. 14 to guide calculations, Bloomberg BNA is projecting the following hourly minimum wage increases, which would take effect Jan. 1, 2018:

Florida, to $8.25 from $8.10;

Missouri, to $7.85 from $7.70;

Montana, to $8.30 from $8.15;

New Jersey, to $8.60 from $8.44;

Ohio, to $8.30 from $8.15; and

South Dakota, to $8.85 from $8.65.

Conspicuous Absences

Because of recent legislation and ballot initiatives, excluded from this year’s fall lineup of states expected to announce inflation-related minimum wage adjustments are Arizona, Colorado, Oregon, and Washington.

These states had wage-related measures on the Nov. 8, 2016, ballot that were approved or passed by their legislatures and that annually increase the state minimum wages over several years, precluding the need for them to annually adjust the hourly minimum wage for a period of time.

Arizona typically issued its hourly minimum wage adjustment in mid-October, but on Nov. 8, 2016, voters approved Proposition 206, the Fair Wages and Healthy Families Act, which both raises the state’s hourly minimum wage in several annual increments (including $10.50 in 2018) and implements earned paid sick time benefits. On Jan. 1, 2021, the minimum wage will again increase each year by the cost of living.

Colorado’s Amendment 70, which took effect Jan. 1, 2017, raises the state’s hourly minimum wage (currently $9.30) by 90 cents each Jan. 1 until it reaches $12 an hour, effective January 2020. Thereafter, it will again be adjusted for annual cost of living increases.

Oregon’s legislature in 2016 enacted a bill (S.B. 1532) that is annually raising the state’s regional hourly minimum wages from July 1, 2016, through July 1, 2022. As of July 1, 2023, after the state’s hourly minimum wages will again be adjusted for annual cost of living increases.  The state’s hourly minimum wages until July 1, 2018, are $10.25 (standard), $11.25 (Portland metro), and $10 (nonurban counties).

Washington’s Nov. 8, 2016, ballot initiative 1433, which voters approved, set the state’s hourly minimum wage through 2020 (including an increase to $11.50 on Jan. 1, 2018, from $11). Starting Jan. 1, 2021, the state is to return to using the federal consumer price index to set its minimum wage.

Alaska is expected to announce in December any adjustment to its hourly minimum wage that would take effect in January.

Moving Along: Ballot Measures

Meanwhile, efforts are underway in several states to qualify minimum wage-related measures to appear on the 2018 election ballot. Among them, signatures are being gathered for ballot measures in Florida (for an increase to $10), Massachusetts, Missouri, according to Balletopedia and state websites. The measures would raise Florida’s minimum wage to $10, Massachusetts’ minimum wage to $15, and Missouri’s minimum wage to $12.