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E-Alerts

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

[December 30, 2015] With the new year close on the horizon, many states – including Massachusetts – are set to increase their minimum hourly wage rates.  In most of these states, the new minimum wage rates will apply as of January 1, 2016, while increased minimum wage rates in a few states will take effect later in 2016.

Employers operating in states affected by these increases should adjust their payroll practices as necessary and prepare to display the requisite new workplace posters.

New Minimum Wage Rates

As of January 1, 2016, new minimum wage rates will be in effect in the following states:

  • Alaska:  $9.75 (up from $8.75);
  • Arkansas:  $8.00 (up from $7.50);
  • California:  $10.00 (up from $9.00);
  • Connecticut:  $9.60 (up from $9.15);
  • Hawaii:  $8.50 (up from $7.75);
  • Massachusetts:  $10.00 (up from $9.00);
  • Michigan:  $8.50 (up from $8.15);
  • Nebraska:  $9.00 (up from $8.00);
  • New York:  $9.00 (up from $8.75);
  • Rhode Island:  $9.60 (up from $9.00);
  • South Dakota:  $8.55 (up from $8.50);
  • Vermont:  $9.60 (up from $9.15);
  • West Virginia:  $8.75 (up from $8.00).

In a few other states, minimum wage rates will increase later in 2016, as follows:

  • District of Columbia: $11.50, effective July 1, 2016 (up from $10.50);
  • Maryland:  $8.75, effective July 1, 2016 (up from $8.25);
  • Minnesota:  $9.50 for large employers, and $7.75 for small employers, effective August 1, 2016 (up from $9.00 and $7.25, respectively).

Federal Contractor And Municipal Minimum Wage Rates

The federal minimum wage rate remains at $7.25.  However, as of January 1, 2016, the minimum wage rate for federal contractors will rise by five cents, to $10.15, under an executive order issued by President Obama.

In addition, a growing number of municipalities (including Chicago, San Francisco, Seattle, and Los Angeles) 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.