Ringing In the New Year With Wage Changes


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The countdown to 2018 is to culminate Jan. 1 in higher minimum wages having taken effect in 18 states, with midyear minimum wage increases planned in three more jurisdictions. But that is just the beginning.

Employers should be mindful that in several states, minimum wage changes trigger additional wage-related adjustments, including wage requirements for the executive, administrative, or professional exemption and income-withholding or statutory exemption adjustments.

In the first of a two-part series, the minimum-wage changes to take effect for 2018 are reviewed.  In the second installment, some of the wage-related changes that are affected by the new minimum wages are addressed.

 

Before the Ball Drops

New York is the first state to raise its hourly minimum wages for 2018, when on Dec. 31 its minimum wages increase to $13 from $11 for New York City employers with at least 11 employees; an increase to $12 from $10.50 for New York City employers with fewer than 11 employees; an increase to $11 from $10 for employers in Nassau, Suffolk, and Westchester counties; and to $10.40 from $9.70 for the rest of the state.

Additional minimum wage changes also are to occur and will vary based on industry, service within an industry, region, and employer size.

 

New Year’s Day Tolls With Higher Minimum Wages in a Third of States

Effective Jan. 1: Alaska's hourly minimum wage is to rise to $9.84 from $9.80; Arizona’s hourly minimum wage is to rise to $10.50 from $10, with the tipped workers’ minimum cash wage to rise to $7.50; California's hourly minimum wage is to rise to $11 from $10.50 for employers with at least 26 employees and is to rise to $10.50 from $10 for employers with fewer than 26 employees; Colorado’s hourly minimum wage is to rise to $10.20 from $9.30, with the tipped workers’ minimum cash wage to rise to $7.18; Florida's hourly minimum wage is to rise to $8.25 from $8.10, with the tipped workers' hourly minimum wage to rise to $5.23; Hawaii's hourly minimum wage is to rise to $10.10 from $9.25, with the tipped workers’ hourly minimum cash wage to rise to $9.35; Maine’s hourly minimum wage is to rise to $10 from $9, with the tipped worker’s minimum cash wage to be $5; Michigan's hourly minimum wage is to rise to $9.25 from $8.90, with the tipped workers’ minimum cash wage to rise to $3.52; Minnesota's hourly minimum wage is to rise to $9.65 from $9.50 for large employers and to $7.87 from $7.75 for small employers; Missouri's hourly minimum wage is to increase to $7.85 from $7.70 and the tipped-worker wage is to increase to $3.925. Montana's hourly minimum wage is to rise to $8.30 from $8.15; New Jersey's hourly minimum wage is to rise to $8.60 from $8.44, with the maximum tip credit to rise to $6.47; Ohio's hourly minimum wage is to rise to $8.30 from $8.15, with the tipped workers’ minimum cash wage to rise to $4.15; Rhode Island’s hourly minimum wage is to rise to $10.10 from $9.60, with the tipped workers’ maximum tip credit to rise to $6.21; South Dakota's hourly minimum wage is to rise to $8.85 from $8.65, with the tipped workers’ minimum cash wage to rise to $4.425; Vermont's hourly minimum wage is to rise to $10.50 from $10, with the tipped workers’ minimum cash wage to rise to $5.25; and Washington’s hourly minimum wage is to rise to $11.50 from $11.

Tip credits are not allowed in Alaska, California, Minnesota, Montana, and Washington.

Midyear wage changes are scheduled to occur July 1 in the District of Columbia, Maryland, and Oregon, which are to increase hourly minimum wages. Nevada generally announces in April whether a minimum wage increase is to occur July 1.

 

Federal Changes Also Take Effect

The hourly minimum wage for federal contractors also is to increase to $10.35 from $10.20 on Jan. 1,  and the minimum hourly cash wage for tipped workers performing work in connection with covered contracts is to rise to $7.25 from $6.80, the Labor Department said Sept. 15 in the Federal Register (82 Fed. Reg. 43,408).

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