Summer Set to Start, Minimum Wages Set to Rise

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By Jon Steingart

Minimum wages are set to rise in several states and local jurisdictions July 1.

“This new batch of midyear increases is actually a relatively recent phenomenon that corresponds with the rise of local minimum wage increases,” Michael Saltsman, managing director for the Employment Policies Institute in Washington, told Bloomberg Law. His organization generally opposes minimum wage hikes.

Businesses have taken action as well. Costco CEO Richard Galanti announced in a May 31 earnings call the company would use tax cut savings to boost its minimum wage to $14 per hour. Target recently announced a $12 minimum after unveiling an $11 minimum last year. JPMorgan Chase in January credited a tax windfall for its hike to $15.

Jack in the Box raised wages in California to meet a statewide increase to $11. And it hiked the price of an order of two tacos by 30 cents in some stores to cover it.

Businesses can establish their own minimum wage higher than what the law requires, which they often refer to as a starting wage. It may be a company policy or part of a collective bargaining agreement with a union.

The federal minimum wage has been $7.25 since 2009, but state and local governments have enacted higher wage floors in recent years. Typically, they include specific annual raises for the first few years and then increases annually in amounts tied to inflation.

“2013 is really when the current wave started,” David Cooper, a senior economic analyst at the Economic Policy Institute in Washington. “There were already seven states that had automatic adjustments for inflation, primarily on the west coast.” Cooper’s organization general supports minimum wage hikes.

Oregon, Maryland, and the District of Columbia will also raise their minimum hourly rate July 1. Maryland’s rate will increase to $10.10, while Oregon will hike their wage floor to $10.50, and the nation’s capital will bump the lowest hourly rate to $13.25. Several cities also will hike their wages, including Los Angeles (the city and county), San Francisco, Chicago, Minneapolis, and Portland, Me.

Some jurisdictions have different minimums that may apply depending on the number of employees a business has or what industry it’s engaged in.

San Francisco and Emeryville, Calif. will have the highest minimum wages among the jurisdictions raising their requirement minimum July 1, with both cities raising their wage floor to $15 per hour.

Only a handful of jurisdictions currently require a minimum wage higher than $15 per hour, according to the State and Local Minimum Wage Provisions Chart on Bloomberg Law’s Labor & Employment Practice Center. Emeryville, Calif., on July 1 will hike the hourly minimum to $15.20 for companies with 56 or more employees. Santa Monica, Calif., requires hoteliers in the city to pay at least $15.37. Seattle requires a minimum rate of $15.45 per hour if the employer doesn’t also offer medical benefits. And Los Angeles hotels with more than 150 rooms must offer their employees at least $15.66 per hour.

In most states, a business is allowed to pay an employee who earns tips from customers a lower wage as long as the employee’s total earnings meet the general minimum wage. California, Minnesota, and a few other states require employers to pay the same minimum wage to tipped employees as they have to pay others.

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