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State Minimum Wages Going Up In 2017

by Martin Salcedo, Esq. - The Human Equation on 11/10/2016
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Minimum Wage going up in 2017

The current federal minimum wage under the Fair Labor Standards Act (FLSA) is $7.25 per hour ($2.13 for tipped employees). Most states, however, have established their own minimum wage, and employees in these states are entitled to whichever minimum wage is higher. Given the existence of multiple minimum wage rates, employers, particularly those operating in more than one state, must know which minimum wage rate (or rates) may apply to their operations.

According to the Department of Labor:

  • Twenty nine states (and the District of Columbia) have a minimum wage that is higher than the federal minimum wage.
  • Fourteen states have a minimum wage that is equal to the federal minimum wage.
  • Two states, Georgia and Wyoming, have a minimum wage ($5.15) that is lower than the federal minimum wage. The federal minimum wage rate applies.
  • Five states (Alabama, Louisiana, Mississippi, South Carolina and Tennessee) do not have a minimum wage law. The federal minimum wage rate applies.

As we approach the end of 2016, it's important to note that the minimum wage in eleven states is linked to a consumer price index (Arizona, Colorado, Florida, Missouri, Montana, New Jersey, Nevada, Ohio, Oregon, South Dakota and Washington). The minimum wages in these states generally go up annually around January 1st. In Florida, for example, the minimum wage is going up five cents to $8.10 per hour on January 1, 2017.

Other states have already enacted future minimum wage increases. For example, according to the National Conference of State Legislatures, the minimum wage in the following states will be going up on January 1, 2017:

Arkansas $8.50 ($8.00 in 2016)
California $10.50 ($10.00 in 2016)
Connecticut $10.10 ($9.60 in 2016)
Hawaii $9.25 ($8.50 in 2016)
Massachusetts $11.00 ($10.00 in 2016)
Michigan $8.90 ($8.50 in 2016)
Vermont $10.00 ($9.60 in 2016)
New York (12/31/16) $11.00 ($9.00 in 2016)

Like the FLSA, state laws may also provide a different minimum wage for tipped employees. Florida, for example, provides a specific rate ($5.08 per hour in 2017), which is in addition to tips. In Arizona, the minimum wage for tipped employees is $3.00 less than the state's minimum wage, which was $8.05 in 2016.

Though many state laws may be similar to the FLSA, do not assume that they are identical. To avoid costly violations, employers must identify the specific requirements for each state's wage and hour laws that may be applicable. To limit the risk, employers should implement a training program and explore their options for insuring against wage and hour claims.

Additional information about various employment related liabilities, including wage and hour law, is available in The Human Equation's library of Human Resources online courses. Please contact us if you would like more information about implementing an employee training program.

To receive regular updates about developments which may affect your business, subscribe to The Human Equation's biweekly news brief.

The Human Equation prepares all risk management and insurance content with the professional guidance of Setnor Byer Insurance and Risk.

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Categories: 2016, 2017

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