E-Alerts

Ring In The New Year – And Increases In State Minimum Wage Rates

January 2015

[January 5, 2015] With the start of the new year, many states – including Massachusetts – have increased their minimum hourly wage rates. Some of these new minimum wage rates are the product of recent legislative or ballot measures, while others reflect automatic adjustments tied to the Consumer Price Index.

Employers operating in states affected by these increases should take note of the new minimum wage rates and adjust their payroll practices as necessary.

New Minimum Wage Rates

As of January 1, 2015, minimum wage rates in the following states have increased as follows:

Alaska: from $7.75 to $8.75;
Arizona: from $7.90 to $8.05;
Arkansas: from $6.25 to $7.50;
Colorado: from $8.00 to $8.23;
Connecticut: from $8.70 to $9.15;
Florida: from $7.93 to $8.05;
Hawaii: from $7.25 to $7.75;
Maryland: from $7.25 to $8.00;
Massachusetts: from $8.00 to $9.00;
Missouri: from $7.50 to $7.65;
Montana: from $7.90 to $8.05;
Nebraska: from $7.25 to $8.00;
New Jersey: from $8.25 to $8.38;
New York: from $8.00 to $8.75;
Ohio: from $7.95 to $8.10;
Oregon: from $9.10 to $9.25;
Rhode Island: from $8.00 to $9.00;
South Dakota: from $7.25 to $8.50;
Vermont: from $8.73 to $9.15;
Washington: from $9.32 to $9.47; and
West Virginia: from $7.25 to $8.00.

Federal Contractor And Municipal Minimum Wage Rates

The federal minimum wage rate remains at $7.25. However, as of January 1, 2015, the minimum wage rate for federal contractors rose to $10.10, under an executive order issued by President Obama.

In addition, a growing number of municipalities (including San Francisco, Seattle, and Chicago) have established their own minimum wage rates, frequently well in excess of the applicable state minimum wage rates. Thus, businesses that employ workers within such municipalities need to ensure that employees’ wages are consistent with those local minimum wage rates.

Recommendations For Employers

In light of these developments, employers are advised to:

Update their payroll practices as necessary to comply with recent increases in minimum wage rates;
Ensure that current versions of all required workplace posters relating to minimum wage rates and other employment matters are displayed in the appropriate locations;
Carefully review all written job descriptions to ensure that employees are appropriately classified as exempt or non-exempt, and that workers are not improperly treated as independent contractors rather than employees; and
Continue to monitor developments at the federal, state, and local levels regarding minimum wage rates.

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Please feel free to contact us if you have any questions regarding recent increases in minimum wage rates or any other wage-and-hour issues.