If you're an employer with minimum-wage employees, you may have to pay them more starting this week. That's because 19 states and 24 municipalities across the country are increasing the minimum wage starting tomorrow and one state, New York, increases them starting today.
The federal minimum wage of $7.25 per hour hasn't gone up in a decade. But 29 of the 50 states, along with the District of Columbia, have their own minimum wage laws, and 42 municipalities or counties have minimum wages that are higher than the minimum in their state.
The minimum wage continues to be a controversial topic, with the Fight for 15 movement seeking to raise minimum pay for everyone, and experts debating whether a higher minimum wage helps low-income workers by giving them better salaries, or hurts them because their employers are likely to reduce their hours or even downsize to keep payroll costs from climbing when the minimum wage goes up. Of course, a higher minimum wage that gives workers the same income as before but with fewer hours is still a benefit, allowing them to save on things like child care and take-out meals, and providing better work-life balance in general. But from an employer's point of view, a minimum wage increases is rarely good news.
You can find complete details here. This is some of what you need to know:
1. There's a wide range in increases.
Alaska is raising its minimum hourly wage only five cents, from $9.84 to $9.89. On the other end of the spectrum, in New York City, the minimum wage is jumping from $13 to $15. The highest minimum wage in the land will be $16.09 for hospitality and transportation employees in SeaTac, Washington (a city that grew up around the Seattle-Tacoma International Airport). In Seattle, the minimum wage will be $16.
2. Some are automatic.
In eight states--Alaska, Florida, Minnesota, Montana, New Jersey, Ohio, South Dakota, and Vermont--the minimum wage automatically increases each year to keep pace with inflation. With inflation low, these are mostly minimal increases.
In six states--California, Delaware, Massachusetts, Michigan, New York, and Rhode Island--the increases were voted in by state legislatures. In some cases, these represent a step along the way to a planned eventual minimum wage of $15. And then in six other states--Arizona, Arkansas, Colorado, Maine, Missouri, and Washington--the increases were decided by voters as ballot initiatives.
3. Some tipped workers are getting increases as well.
Twelve states--Arizona, Colorado, Florida, Maine, Massachusetts, Michigan, Missouri, Ohio, South Dakota, and Vermont, are raising the minimum wage for tipped employees (such as waiters). Under federal law and many state laws, these workers can be paid less than the legal minimum wage on the assumption that they receive a substantial part of their income in the form of tips. But the total of their salary and tips must at least equal the federal minimum wage. In Illinois, a new law requires that total to match the local minimum wage instead of the federal one.
Employers can claim a "tip credit"--a maximum amount an employee received in tips to make up the difference between a tipped employee's salary and the minimum wage. Many states are raising this maximum as well.
4. Some places still haven't made up their minds.
Not every minimum wage increase happens at the beginning of the year. Some cities in California, Santa Fe in New Mexico, and the whole state of Nevada, are planning minimum wage increases on July 1. Since they still have six months to go, they're taking their time and haven't yet decided what the new minimum wage will be. If you're in one of those places, you'll have to wait and see.