Minimum Wage IncreaseAs we look towards the New Year, employers with locations in various jurisdictions should be mindful of state and local minimum wage increases that will soon take effect.

Some of these increases are a result of laws that tie wages to an economic index (generally the Consumer Price Index). Others are the result of recent legislation.

Below are two charts addressing these changes. The first summarizes the relevant changes for states; the second, for cities and other localities.

Please note that Arizona, Florida, Missouri, Montana, New Jersey, Ohio, Oregon, and Washington all have CPI based wage laws, and all have determined that there will be no minimum wage increase in 2016.

Many jurisdictions, such as Alaska, Minnesota, and Vermont, have passed sweeping minimum wage laws, but those changes will not go into effect for some time.

In the charts below,  denotes a jurisdiction that ties minimum wage increase to an index annually.

State Increases

State Current Change (1/1/16 unless stated otherwise) Current for Tipped Employees Change for Tipped Employees
Alaska $8.75 $9.75
Arkansas $7.50 $8.00
California $9.00 $10.00
Colorado $8.23 $8.31 $5.21 $5.29
Connecticut $9.15 $9.60 $5.78-$7.46 $6.07-$7.82
Hawaii $7.75 $8.50 $7.25 $7.75
Maryland $8.25 $8.75
Massachusetts $9.00 $10.00 $3.00 $3.35
Michigan $8.15 $8.50 $3.10 $3.23
Minnesota $7.25-$9.00 $7.75-$9.50 (8/1/16)
Nebraska $8.00 $9.00
New York $8.75 $9.00-$10.50 (12/31/15) $4.9-$5.65 $7.50
Rhode Island $9.00 $9.60 $2.89 $3.39
South Dakota $8.50 $8.55 $4.25 $4.28
Vermont $9.15 $9.60 $4.58 $4.80
West Virginia $8.00 $8.75 $2.40 $2.62

A few points of note on the above chart:

  • Minnesota’s wage law differentiates between a “large” and “small” employer based on gross revenue of more than $500,000.
  • New York passed a minimum wage order specifically applying to the fast food industry, which has different wage levels compared the $9.00 minimum for other sectors (e.g., the hospitality industry, the farming industry, and other miscellaneous industries and occupations).
  • Nevada’s minimum wage law, which is generally tied to an economic index for yearly increases, is being contested in court and has been deemed impermissible under the State constitution.  An appeal of that decision is pending.  Should the law be deemed constitutional, the determination of the indexing has not yet occurred; therefore, no minimum wage has been set for 2016.

Local Increases

City or Municipality Current Change (1/1/16 unless stated otherwise) Current for Tipped Employees Change for Tipped Employees
Birmingham City, AL $7.25 $8.50 (7/1/2016)
Berkeley, CA $11.00 $12.53 (10/1/16)
Chicago, IL $10.00 $10.50 (7/1/16) $5.45 $5.95 (7/1/16)
Washington, DC $10.50 $11.50 (7/1/2016)
King County, WA $9.47 $10.50-13
Lexington-Fayette County, KY $7.25 $8.20 (7/1/16)
Louisville, KY $7.75 $8.15 (7/1/16)
Montgomery County, MD $9.55 $10.75 (10/1/16)
Oakland, CA $12.25 $12.55
Portland, ME $7.50 $10.10 $3.25 $3.75
Prince George’s County, MD $9.55 $10.75 (10/1/16)
San Diego, CA $9.75 $10.50
San Francisco, CA $12.25 $13.00 (7/1/16)
Santa Fe, NM $10.84 $ (3/1/16)
Seattle, WA $10.00 or $11.00 $10.50-$13.00 $10.00 $10.50
Tacoma, WA $9.47 $10.35 (2/1/16)

As seen in the above chart, King County and Seattle’s minimum wage law are structured similarly in that the appropriate wage varies based on several factors, including the number of employees (500 or more) and whether the employer provides medical benefits,  Generally, the lower end of the minimum wage range is for smaller companies, and the higher end is for larger companies that do not pay health insurance. Both laws provide for a gradual increase over the next few years.


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