Minimum Wage Changes in Effect for 2016
Minimum wage continues to be an important issue for businesses around the nation. The federal minimum wage rate remains unchanged at $7.25 per hour. However, many states and local municipalities have set their own minimum wage rates, which may be higher than the federal rate.
Currently, 29 states and the District of Columbia (DC) have minimum wage rates set above the federal minimum wage*. Many of these states had increases go into effect on January 1, 2016, and a few have additional adjustments planned for later this year. Fifteen states and Washington D.C. index their minimum wage to increase annually in accordance with cost-of-living statistics.
State Minimum Wage Rate Increases in Effect as of January 1, 2016
District of Columbia: $10.50 ($11.50 eff. 7/1/16)
Maryland: $8.25 ($8.75 eff. 7/1/16)
Minnesota: $7.25 for small employers (gross annual sales below $500,000), $7.75 eff. 8/1/16; and $9.00 for large employers (gross annual sales above $500,000), $9.50 eff. 8/1/16
New York: $9.00 eff. 12/31/2015
Rhode Island: $9.60
South Dakota: $8.55
West Virginia: $8.75
It's important for business owners to stay informed of the latest minimum wage updates to mitigate exposure to wage and hour violations and litigation. Please check back for the latest information as Paychex continues to monitor minimum wage updates.
*Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, District of Columbia, 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, and West Virginia. Additional industry-specific rates may also apply in certain states.