With the minimum wage having increased in 19 states last year, now is a good time to ensure that your business’s pay policies are in compliance with federal, state and local wage laws.
The current federal minimum wage is $7.25 per hour; however, 29 states and the District of Columbia have a higher minimum wage rate. When the state minimum wage rate is higher than the federal rate, workers are paid the higher amount.
Ogletree Deakins has compiled an excellent summary of 2016 minimum wage and tipped wage rates here. But following is a quick rundown of recent changes:
• Four states – Alaska, Arkansas, Nebraska and South Dakota – approved minimum wage increases through ballot measures in the 2014 general election; Illinois voters approved an advisory measure.
• The legislatures in Connecticut, Delaware, Hawaii, Maryland, Massachusetts, Michigan, Minnesota, Rhode Island, Vermont, West Virginia and Washington, D.C. enacted increases during the 2014 legislative session.
• Finally, minimum wages will go up in nine states because of indexed increases in their state law; these states are Arizona, Colorado, Florida, Missouri, Montana, New Jersey, Ohio, Oregon, and Washington.
Among states raising the minimum wage, Washington State will boast the highest at $9.47 an hour–but only until July 1, when the District of Columbia will have the highest in the nation at $10.50 an hour.
Remember, some employees are exempt from minimum wage requirements. One such exemption is the tipped employee; an individual who receives more than $30 per month in tips. But as with minimum wage, many states have laws specific to tipped em¬ployees. If state and federal laws provide for different wage rates, the employee must be paid the higher of the wage rates.
For more information on wage and hour basics, download a copy of NFIB’s Guide to Wage and Hour law available free here.
