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Where Will the Minimum Wage Rise Above $7.25 in 2017?

Payroll
Article
01/10/2017

While the federal minimum wage of $7.25 an hour has remained unchanged since 2009, many states and local municipalities have set their own minimum wage rates higher than the federal law. As of January 1, 2017, 29 states have a higher minimum wage than the federal minimum wage as well as multiple local jurisdictions.

The chart below shows the states that have increased minimum wage rates for 2017. Additional industry-specific or regional rates may also apply in certain states.

State

Non-Tipped Employees

Tipped Employees

Alaska

$9.80

N/A

Arkansas

$8.50

$2.63

Arizona

$10.00

$7.00

California

$10.50 (Large employer)
$10.00 (Small employer)

N/A

Colorado

$9.30

$6.28

Connecticut

$10.10

$6.38 (wait staff)
$8.23 (bartenders)

Florida

$8.10

$5.08

Hawaii

$9.25

$8.50

Maine

$9.00

$5.00

Maryland

$9.25

$3.63

Massachusetts

$11.00

$3.75

Michigan

$8.90

$3.38

Missouri

$7.70

$3.85

Montana

$8.15

N/A

New Jersey

$8.44

$2.13

New York

$9.70*

$7.50 (hospitality industry)

Ohio

$8.15

$4.08

Oregon

$10.25*

N/A

South Dakota

$8.65

$4.325

Vermont

$10.00

$5.00

Washington

$11.00

N/A

*Minimum wage rates may vary by industry and/or location within NewYork State and Oregon.

Increases to Exempt Salary Thresholds in New York, California

California and New York have set their own thresholds for certain exempt-employee salaries as well as definitions for which employees may be classified as exempt from state overtime requirements.

In California, an exempt employee is normally an executive, administrative or professional employee, but may also include some inside and outside salespeople. The Golden State’s salary threshold for covered exempt employees is 2x the applicable minimum wage for a 40-hour workweek.  Effective January 1, the minimum monthly salary test for these exemptions for employers with 26 or more employees will be $3,640 per month, while the minimum salary threshold for these exemptions for employers with 25 or fewer employees will remain at $3,466.67 per month for 2017.

New York State labor regulations provide for executive and administrative exemptions from the state’s overtime requirements.  As of December 31st, employees who meet the duties requirements for these exemptions must also receive at least a weekly salary as provided below based on location and employer size.

Large employers (11+ employees) in New York City:

  • $825.00 per week on and after 12/31/16
  • $975.00 per week on and after 12/31/17
  • $1,125.00 per week on and after 12/31/18

Small employers (10 or fewer employees) in New York City:

  • $787.50 per week on and after 12/31/16
  • $900.00 per week on and after 12/31/17
  • $1,012.50 per week on and after 12/31/18
  • $1,125.00 per week on and after 12/31/19

Employers in Nassau, Suffolk, and Westchester Counties:

  • $750.00 per week on and after 12/31/16
  • $825.00 per week on and after 12/31/17
  • $900.00 per week on and after 12/31/18
  • $975.00 per week on and after 12/31/19
  • $1,050.00 per week on and after 12/31/20
  • $1,125.00 per week on and after 12/31/21

Employers OUTSIDE of New York City, Nassau, Suffolk, and Westchester Counties:

  • $727.50 per week on and after 12/31/16
  • $780.00 per week on and after 12/31/17
  • $832.00 per week on and after 12/31/18
  • $885.00 per week on and after 12/31/19
  • $937.50 per week on and after 12/31/20

It's important for business owners to stay current on minimum wage rates, as more states and local jurisdictions may increase their minimum wage rates going forward. Violations can expose companies to violations and enforcement of these laws continues to be a priority in most states. We encourage employers to consult with their payroll provider, CPA or legal counsel to ensure awareness of all applicable minimum wage laws.

 

Tammy Tyler

Tammy Tyler is a senior compliance analyst with a focus on employment law at Paychex, Inc., a leading provider of integrated solutions for payroll, HR, retirement, and insurance services.

This website contains articles posted for informational and educational value. Paychex is not responsible for information contained within any of these materials. Any opinions expressed within materials are not necessarily the opinion of, or supported by, Paychex. The information in these materials should not be considered legal or accounting advice, and it should not substitute for legal, accounting, and other professional advice where the facts and circumstances warrant.
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