Governor Dannel P. Malloy has signed legislation to increase Connecticut’s hourly minimum wage over two years by $.75 to $9.00 by January 1, 2015.
Under the new law (Public Act No. 13-117), effective January 1, 2014, the state minimum wage will rise from $8.25 per hour to $8.70 per hour. A second increase, effective January 1, 2015, will raise the rate to $9.00 per hour.
In addition, the employer’s tip credit percentages will be adjusted to maintain the employer’s share of tipped employees’ wages at current dollar levels, despite the increase in the overall hourly minimum wage. Current law allows tips to comprise 31% of the minimum wage for hotel and restaurant employees and 11% of the minimum wage for bartenders. Thus, under current law, as long as employees’ tips cover the difference, hotel and restaurant employers must pay those workers 69% of the minimum wage ($5.69 per hour), and bartenders’ employers must pay bartenders 89% of the minimum wage ($7.34 per hour).
To maintain employer’s contribution at current dollar amounts, the new law will increase the tip credit percentage to 34.6% and 36.8% for hotel and restaurant workers in 2014 and 2015, respectively. Likewise, the new law will increase the tip credit percentage to 15.6% and 18.5% for bartenders in 2014 and 2015. Thus, tip credits will be calculated as follows:
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The Connecticut lawmakers dropped a provision that would have linked minimum wage increases to the Consumer Price Index beginning 2016.