Nothing says Happy Holidays like a pay raise! Here is a summary of some of the states and localities with significant increases in their minimum wage rates as of January 1, 20181.
Effective January 1, 2018, the California minimum wage increases from $10.50 to $11.00 per hour for employers with 26+ employees, and from $10.00 to $10.50 per hour for employers with 25 or less employees.
Importantly, exempt employees in California are subject to state law, which currently requires a minimum monthly salary of no less than two times the state minimum wage for full-time employment. So, California employers should review the current salary levels of their employees and adjust such levels as needed to comply with the increase in California’s minimum wage. California employers are also required to comply with certain posting obligations. Copies of California’s Industrial Welfare Commission wage orders and minimum wage notice, which must be displayed in a conspicuous location in the workplace or job site, can be found here.
In addition, numerous California municipalities have enacted legislation which require employers with employees working in those locales to uphold even greater wage obligations effective January 1, 2018:
- City of San Mateo Minimum Wage Ordinance – from $12.00 to $13.50 per hour for most businesses; from $10.50 to $12.00 for tax exempt non-profit organizations
As indicated in our prior alert, Florida’s minimum wage increases from $8.10 to $8.25 per hour effective January 1, 2018. Florida’s minimum wage increase also affects the minimum direct/cash wages for tipped employees – raising it from $5.08 to $5.23 per hour (with Florida’s tip credit remaining at $3.02 per hour).
Thus, Florida employers should ensure that wages are raised to at least $8.25 per hour for all hours worked by non-exempt employees and that overtime wages (for hours worked over 40 in a workweek) are adjusted accordingly. Florida employers should also take heed and post Florida’s mandated minimum wage notice in a conspicuous location within each workplace. It is available in English, Creole, and Spanish and can be found here.
Effective January 1, 2018, New Jersey’s minimum wage rate will increase from $8.44 to $8.60 per hour. Unlike other states, New Jersey’s minimum wage increase does not result in a corollary increase in the direct/cash wages that New Jersey employers must pay tipped employees (which remains at least $2.13 per hour for employers subject to the federal Fair Labor Standards Act). Rather, New Jersey employers are required to demonstrate that the total wage, including cash and gratuities, received by a tipped employee equals at least $8.60 per hour worked and, if not, make up any difference.
Thus, New Jersey employers should ensure that wages are raised to at least $8.60 per hour for all hours worked by non-exempt employees and that overtime wages (for hours worked over 40 in a workweek) are adjusted accordingly. Employers also must display a New Jersey minimum wage notice in the workplace where it can be seen by all employees. The New Jersey minimum wage notice can be found here.
As we previously advised, New York is not only subject to an increase in its minimum wage in 2018, but also the minimum salary levels needed to be exempt from overtime pay under state law. Effective December 31, 2017, the minimum wage in New York will increase as follows:
- Employers of 11+ employees in New York City – from $11.00 to $13.00 per hour
- Employers of 10 or fewer employees in New York City – from $10.50 to $12.00 per hour
- Employers in Nassau, Suffolk and/or Westchester Counties (regardless of size) – from $10.00 to $11.00 per hour
- Employers in the remainder of New York – from $9.70 to $10.40 per hour
Also effective December 31, 2017, the minimum wage for fast food employees working in New York City increases from $12.00 to $13.50 per hour. Fast food employees working outside of New York City will begin receiving a minimum wage of $11.75 per hour (up from $10.75). Additional increases affecting other hospitality industry employees working throughout New York take effect on December 31, 2017. A summary of those changes can be found here.
For exempt employees, the minimum salary increases for executive and administrative employees effective December 31, 2017 are as follows:
- Employers of 11+ employees in New York City – from $825.00 per week to $975.00 per week
- Employers of 10 or fewer employees in New York City – from $787.00 to $900.00 per week
- Employers in Nassau, Suffolk and/or Westchester Counties (regardless of size) – from $750.00 to $825.00 per week
- Employers in the remainder of New York – from $727.50 to $780.00 per week
Employers with multiple locations in New York should be familiar with the different applicable minimum wage and salary thresholds for each location, and be prepared, beginning December 31, 2017, to pay their non-exempt and exempt employees at the appropriate adjusted rates. All employers should also display the new minimum wage posters, available on the New York State Department of Labor’s website. Employers should also refer to this website and consult with counsel for guidance in implementing the wage changes.