While the political debate over increasing minimum wage continues is many circles, many states are, in fact, slated to increase their own minimum wage rates at the end of the year or in 2016. California is among these with a jump from $9 per hour to $10 per hour going into effect on the first of the year.
Minimum Wage and Labor Law: California Sees an Increase in 2016
While the federal government establishes a minimum wage “baseline”, the reality is that almost every state in the nation provides a higher minimum wage. Currently, under the Fair Labor Standards Act (FLSA), the federal minimum wage is $7.25 per hour. While this serves as a legal baseline, or minimum wage amount for most jobs in America, the FLSA does not supersede any state or local laws where the legal minimum is more beneficial to employees.
In other words, if your state’s minimum wage is higher than the federal minimum, you are subject to your state’s minimum wage law and are obligated to pay that higher rate to your employees.
The following chart shows which states are increasing their minimum wages along with the new rate and amount of the increase.
(Map courtesy www.blr.com)
State Increases of Minimum Wage for 2016 and Beyond
Depending on where your business is located - or where you have employees based at - the minimum wage requirements will differ and scheduled mandated increases will vary. Here is a list of the current changes that will go into effect nation-wide going into next year:
States with minimum wage changes effective December 31, 2015
- New York: $9.00 per hour ($9.75 for fast food workers in fast food restaurants).
- West Virginia: $8.75 per hour.
States with minimum wage changes effective January 1, 2016
- Alaska: $9.75 per hour.
- Arkansas: $8.00 per hour. An additional increase to $8.50 per hour on January 1, 2017.
- California: $10.00 per hour.
- Connecticut: $9.60 per hour. An additional increase to $10.10 per hour on January 1, 2017.
- Hawaii: $8.50 per hour. Additional increases to $9.25 per hour on January 1, 2017, and $10.10 on January 1, 2018.
- Massachusetts: $10.00 per hour. An additional increase to $11.00 per hour on January 1, 2017.
- Michigan: $8.50 per hour. Additional increases to $8.90 per hour on January 1, 2017, and $9.25 on January 1, 2018.
- Nebraska: $9.00 per hour.
- Rhode Island: $9.60 per hour.
- South Dakota: $8.55 per hour.
- Vermont: $9.60 per hour. Additional increases to $10.00 per hour on January 1, 2017, and $10.50 on January 1, 2018.
States with minimum wage changes effective July 1, 2016
- Washington D.C: $11.50 per hour on July 1, 2016.
- Maryland: $8.75 per hour on July 1, Additional increases to 2016, $9.25 on July 1, 2017, and $10.10 on July 1, 2018.
Minnesota's minimum wage changes effective August 1, 2016
- $9.50 per hour for large employers on August 1, 2016, $7.75 per hour for small employers.
Local Minimum Wage Increases
In addition to the state-wide minimum wage increases listed here, a large number towns, cities and other municipalities are either on track to implement their own, higher wage increases, or have proposed legislation in progress to do so.
In California, for example, the cities of Los Angeles, Seattle, San Francisco, Oakland and Berkeley have approved phased-in increases to eventually take their minimum wage to $15 an hour, and the University of California system and Los Angeles County have adopted similar plans.
HR and Compliance
It is critical to keep your company safe and your management team informed and in compliance.If you have questions regarding this, or other HR issues and practices, let us help you in managing your HR needs, payroll processes, and staying on top of compliance demands. Get your Free Download: Payroll Outsourcing Guide to help you make an informed decision or call Accuchex Payroll Management Services at 877-422-2824.