Midsummer Wage, Sick-Leave Measures Require Compliance

Payroll on Bloomberg Tax is built to get you to the right answer faster and more efficiently. Get all the payroll intelligence you need with Bloomberg Tax expert analysis, perspectives and...

Minimum-wage rate changes and paid-leave measures take effect this summer in several states and jurisdictions and require employers' attention to ensure compliance.

Minnesota's hourly minimum-wage rate for large employers, those with annual gross revenue of at least $500,000, is to increase Aug. 1 to $9 from $8. The hourly minimum-wage rate for small employers, those with annual gross revenue of less than $500,000, is to increase to $7.25 from $6.50. Employers subject to the federal minimum wage must pay at least $7.25 an hour, regardless of their annual gross volume of sales or business.

The state's training wage for the first 90 consecutive days of employment for workers younger than 20 and the youth wage that must be paid to employees younger than 18 who are not covered under federal law are to increase to $7.25 from $6.50.

Minnesota's hourly minimum wage rates are to increase again Aug. 1, 2016, before inflation-related indexing of the hourly minimum wage starts Jan. 1, 2018. The rate changes are the result of a bill (H.F. 2091) signed April 14, 2014, by Gov. Mark Dayton (D).

On July 1, Maryland's hourly minimum wage rate rose to $8.25, after a Jan. 1 rate increase to $8. The rate is to increase again July 1, 2016, under a bill (H.B. 295) signed May 5, 2014, by former Gov. Martin O'Malley (D) that enacted several annual increases to take effect until the rate hits $10.10 in 2018.

Additionally, the District of Columbia increased its hourly minimum-wage rate to $10.50 from $9.50 on July 1. The District is the only state-level equivalent jurisdiction at or above the $10 minimum hourly wage threshold, until Jan. 1, 2016, when California and Massachusetts raise their rates to $10.

Chicago's hourly minimum-wage rose July 1 to $10 from $8.25 and to $5.45 from $4.95 for tipped workers, under an ordinance passed Dec. 2, 2014. The minimum wage rate is to annually increase until reaching $13 on July 1, 2019, and thereafter it is to be annually reviewed for inflation-related adjustments.

As of June 1, Delaware's hourly minimum wage is $8.25, up from $7.75. The minimum cash wage for tipped workers is $2.23, based on a maximum tip credit that rose to $6.02 from $5.52.

New Paid Sick-Leave Laws

California's paid-sick leave law took effect July 1. The Healthy Workplace Healthy Family Act of 2014 (A.B. 1522) “generally provides most employees the ability to accrue at least one hour of paid sick leave for every 30 hours worked, paid at the regular rate of the worker’s wages,” the Department of Industrial Relations said July 1 in a news release. “The employer can also provide employees at least 24 hours of sick leave up front for use during the year. Workers may begin using their accrued hours beginning on the 90th day of employment,” it said.

Retaliation or discrimination against employees who request paid sick days or use paid sick days is prohibited, and employees may file retaliation- or discrimination-related complaints with the labor commissioner, the news release said. More information on the new law is available at the department's website.

Massachusetts' earned sick time law also took effect July 1. The final regulations entitle employees to earn and use sick time according to certain conditions.

Those working for employers with at least 11 workers may earn and use up to 40 hours of paid sick time per year. Those working for employers with fewer than 11 workers may earn and use up to 40 hours of unpaid sick time per year. The time may be earned at a rate of one hour for every 30 hours worked and is to start accruing on the date of hire or July 1, 2015.

The time may be used for routine medical appointments or to care for physical or mental illness, injury or amedical condition affecting the employee or the employee's child, spouse, parent or spouse's parent. The time also may be used to address the effects of domestic violence on the worker or the worker's dependent child.

The final rules include a safe-harbor provision that grants employers that already offer paid time-off policies to employees until Jan. 1, 2016, to fully comply with the law.

Web-based informational sessions to help employers comply with the law are scheduled for July 7, 14, 16, 21 and 23, a June 30 news release said.

California and Massachusetts join Connecticut as the only states with earned sick time laws, which may be used for routine or emergency medical visits and travel time, to care for an ill family member or to address issues of domestic violence. Connecticut enacted its law in 2012. Oregon is to become the fourth state to require paid sick leave under a measure (S.B. 454), signed June 22, 2015, and effective Jan. 1, 2016.

To contact the reporter responsible for this story: Christine Pulfrey at cpulfrey@bna.com

To contact the editor responsible for this story: Michael Trimarchi at mtrimarchi@bna.com

Request Payroll