Now that the new year has begun, employers need to be aware of state-specific minimum wage increases for 2019 that may impact their wage & hour compliance (see chart below). Some of these rate changes are due to inflation index increases[1], while others are the result of recent state legislature[2] or ballot initiatives[3].
The federal minimum wage of $7.25 remains unchanged and has not seen an increase since 2009. Some experts point out that the lack of upward movement of the minimum wage at the federal level may be one reason states and some localities have enacted their own minimum wage rates reflecting the needs and desires of their residents:
29 states and the District of Columbia[4] have a minimum wage rate higher than the federal minimum wage.
7 states[5] either have no state minimum wage law or have a minimum wage law below the federal level, requiring the federal minimum wage rate to apply.
44 localities have enacted their own rates[6].
The Takeaway for Employers
Minimum wage rate is one wage & hour issue that’s ripe for expensive class action litigation. Review the changes for 2019 to ensure you’re paying your minimum wage employees correctly and you’re fully compliant. Be sure to check both the state level and any locality that you’re doing business in, as the rates may vary.
As rates change, employers may have difficulty maintaining compliance, especially if they do business in multiple locations with varying rates. Minimum wage rates also play into other areas of compliance with the Fair Labor Standards Act (FLSA), so awareness and vigilance is key.
For more information or to see if a minimum wage compliance audit might be right for you, reach out to us at info@mcleodlegalsolutions.com.
[1] Alaska, Florida, Minnesota, Montana, New Jersey, Ohio, South Dakota and Vermont.
[2] California, Delaware, Massachusetts, Michigan, New York and Rhode Island.
[3] Arizona, Arkansas, Colorado, Maine, Missouri and Washington.
[4] Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, New Jersey, New Mexico, New York, Ohio, Oregon, Rhode Island, South Dakota, Vermont, Washington, Washington D.C. and West Virginia.
[5] Alabama, Georgia, Louisiana, Mississippi, South Carolina, Tennessee and Wyoming.
[6] Number of localities per state to enact individual minimum wage rates: Alabama: 1, Arizona: 1, California: 23, Illinois: 2, Maine: 1, Maryland: 1, Massachusetts: 1, Minnesota: 1, New Mexico: 5, New York: 4, Oregon: 1, Washington: 3.