By Susan Prince, J.D., M.S.L., Legal Editor
Dec 10, 2020 - HR Daily Advisor
Minimum wage increases will affect numerous states across the country in January 2021.
Under the Fair Labor Standards Act (FLSA), the current federal minimum wage is $7.25 per hour, but the FLSA does not supersede any state or local laws that are more favorable to employees. Therefore, if a state or municipality has a minimum wage that is higher than the federal minimum, employers subject to the state or local minimum wage law are obligated to pay the higher rate to employees working there. The minimum wage for federal contractors in 2021 is $10.95 per hour.
The map below shows the states that are increasing their minimum wages, including the new rates and amounts of the increases as of the date of publication of this article. We also provide a listing of the states increasing their minimum wages and the effective dates of the changes below the map.
New York State: $12.50 per hour. Annual indexing to continue increasing up to $15.00.
Alaska: $10.34 per hour. Adjusted annually January 1.
Arizona: $12.15 per hour. Adjusted annually on January 1.
Arkansas: $11.00 per hour. Tipped employees must regularly earn at least $20 per month in tips.
California: $14.00 per hour with 26 employees or more; $13.00 per hour with fewer than 26 employees. Scheduled wage increases (if no increases are paused) for 26 employees or more: $15.00 per hour on 1/1/22, and then adjusted annually. For 25 employees or less: $14.00 per hour on 1/1/22; $15.00 per hour on 1/1/23, and then adjusted annually.
Colorado: $12.32 per hour. Adjusted annually on January 1.
Florida: $8.65 per hour. Increasing to $10.00 on 9/30/21; $11.00 on 9/30/22; $12.00 on 9/30/23; $13.00 on 9/30/24; $14.00 on 9/30/25; and $15.00 on 9/30/26.
Illinois: $11.00 per hour. Increasing to $12.00 per hour on 1/1/22.
Maine: $12.15 per hour. Adjusted annually on January 1.
Maryland: $11.75 for businesses with 15 or more employees and $11.60 for businesses with fewer than 15 employees.
Massachusetts: $13.50 per hour on 1/1/21. Increasing to $14.25 per hour on 1/1/22 and $15.00 per hour on 1/1/25.
Michigan: $9.87 per hour. Adjusted annually on January 1.
Minnesota: $10.08 per hour for large employers (annual gross revenue $500,000 or more) and $8.21 per hour for small employers (annual gross revenue less than $500,000). Adjusted annually on January 1.
Missouri: $10.30 per hour. Increasing to $11.15 per hour on 1/1/22 and $12.00 per hour on 1/1/23. Adjusted annually on January 1.
Montana: $8.75 per hour. Adjusted annually on January 1.
New Jersey: $12.00 per hour for employers with more than 5 employees; $11.10 per hour for seasonal employers and/or small employers with 5 or fewer workers, and $10.44 per hour for agricultural employers.
New Mexico: $10.50 per hour. Increasing to $11.50 per hour on 1/1/22, and $12.00 per hour on 1/1/23.
Ohio: $8.80 per hour for gross receipts of $323,000 or more; $7.25 per hour for gross receipts under $323,000. Adjusted annually on January 1.
Rhode Island: $11.50 per hour.
South Dakota: $9.45 per hour. Adjusted annually on January 1.
Vermont: $11.75 per hour. Adjusted annually on January 1.
Washington: $13.69 per hour. Adjusted annually on January 1 after 1/1/21.
Connecticut: $13.00 per hour, effective 8/1/21. Increasing to $14.00 on 7/1/22; $15.00 on 6/1/23, and then adjusted annually on January 1.
Nevada: $9.75 per hour for employees without healthcare benefits; $8.75 per hour for employees with healthcare benefits. Effective on 7/1/21. Increasing to $10.50 per hour on 7/1/22 for employees without healthcare benefits and $9.50 per hour on 7/1/22 for employees with healthcare benefits.
Oregon: An employer’s location affects the minimum wage rate:
Virginia: $9.50 per hour, effective 5/1/21. Increasing to $11.00 per hour on 1/1/22 and $12.00 per hour on 1/1/23.
The federal FLSA requires that a minimum wage be paid for all hours an employee is “suffered or permitted” to work for the employer (29 U.S.C. §203(g)) and that an overtime wage be paid for all hours “worked” over 40 in a week. The FLSA does not specifically define “hours worked” or place a limit on the number of hours an employee may work; it requires only that overtime be paid for any hours worked over 40.
Determining exactly what constitutes hours worked is essential in determining an employee’s compensation and compliance with both minimum wage and overtime requirements of the act.
Hours worked includes time during which an employee is “necessarily required to be on the employer’s premises, on duty or at a prescribed work place” (29 C.F.R. §785.7). This broad definition of hours worked may require that an employee be compensated for time the employer does not otherwise consider working time, such as travel time, waiting time and certain meal, rest and sleep periods, and time the employee is required to spend in training, at seminars, or in meetings.
The courts and the U.S. Department of Labor, however, have developed a de minimis rule, whereby employers may disregard insubstantial or insignificant periods of time beyond the scheduled working hours, if, as a practical administrative matter, such time cannot be precisely recorded.
If employees are checking e-mails for 2 or 3 minutes, employers will likely not have to pay for this time. But if employees are spending 10 to 15 minutes after work hours, employers will have to pay employees for this work time. Also, the FLSA explicitly permits the rounding of an employee’s start and stop times.
Hours worked for purposes of the FLSA does not include time spent on call, time spent waiting to work, or time when an employee is required to carry a pager or cell phone, provided the employee is otherwise free to effectively use the time for his or her own personal purposes. The FLSA does not obligate employers to pay employees for holidays, vacation, or sick days.
The rules are strict, but the penalties are stricter. Paying employees properly now will help you to avoid expensive fines, claims, and lawsuits down the line.
What state minimum wage changes have already taken place in 2020? See our previous minimum wage map.
 - HR Daily Advisor_files/Susan-PrinceBW.jpg) Susan E. Prince, J.D., M.S.L., is a Senior Legal Content Specialist for BLR’s human resources and employment law publications. Ms. Prince has close to 20 years of experience as an attorney and writer in the field of human resources. She has published numerous articles on a variety of human resources and employment topics, including compensation, benefits, workers’ compensation, discrimination, work/life issues, termination, and military leave. Ms. Prince has also served as an expert speaker on the Fair Labor Standards Act. Ms. Prince received her law degree and master’s degree from Vermont Law School.
Questions? Comments? Contact Susan at sprince@blr.com for more information on this topic. |