A new year brings new state minimum wages…
Though employers always need to be aware of changes in minimum wage laws in the locales where they operate, it seems that a tidal wave of those changes go into effect in states and municipalities across the country each January 1. Those changes, as well as a number of other issues on the horizon, must be in the forefront of employers’ minds as this new year begins.
Below is a summary of changes to state and city minimum wages since January 1, 2014, which are currently set to occur during 2015 (if no effective date is noted, the change took effect on January 1, 2015):
Click here to view table.
Employers with tipped employees should also take note that many of the jurisdictions that have adopted new minimum wages for the general workforce also have increased the minimum wage applicable to tipped employees.
Also, pursuant to the President’s Executive Order, employees working under contracts awarded by the federal government on or after January 1, 2015 must pay the employees working on those contracts no less than $10.10 per hour.
Employer actions in light of the new rates…
Employers should audit their payroll practices in all of these jurisdictions to make sure that employees are being properly paid. Also, when minimum wages change, old posters may be out of date. Employers therefore also should make sure that current posters are properly posted in each applicable jurisdiction. And finally, while employers are auditing compliance on these items, they also should review employee exempt statuses and payroll practices to make sure that employees are not misclassified and that employees are otherwise being properly paid for all hours worked. This last task typically requires some involvement of counsel in order to be assured that the latest enforcement nuances are being considered.
Employers still should keep abreast of changes to wage and hour rules over the course of the year. Creating or increasing state minimum wages has been particularly common this past year, and it is reasonable to expect that other states will join in the trend to increase their minimum wages, particularly in states which currently adopt the federal minimum as their minimum.
What’s on the horizon with respect to minimum wages and overtime regulations…
In addition, as we approach the next round of elections, there may be posturing on the issue of the federal minimum wage, that is, whether the current wage should remain unchanged and subject those proponents to attacks on this popular issue as the election season peaks, or whether there will be a consensus to remove the issue from the debate before the election season. Time and politics will only tell on this item.
In the meantime, though, employers should also be on the lookout for the administration’s publication of new regulations which will likely seek to narrow the scope of the white collar exemptions to overtime compensation. While there has been no announcement as to when the proposed regulations will be rolled-out, the conventional wisdom is that they can be expected within the next few months. Under this timetable, the final version of the new regulations may be rolled-out at the year’s end, but doing so will be ambitious. Changes are likely to be effective sometime in 2016, if not sooner.