Minimum Wage Increases – January 1, 2020

Ready for more increases to minimum wage? While the federal minimum wage is still $7.25 per hour, many states have adopted minimum wage rates higher than the federal rate. When the state rate and the federal rate are different, employers must pay their employees the higher rate.

The following states have announced new minimum wage rates for 2020, with an effective date of January 1, 2020, unless stated otherwise:

• Alaska: $10.19
• Arizona: $12
• Arkansas: $10
• California: $13 or $12 (see chart)
• Colorado: $12
• Connecticut: $12 as of September 1, 2020
• District of Columbia: $15 as of July 1, 2020
• Florida: $8.56
• Illinois: $9.25; $10 as of July 1, 2020 (see chart)
• Maine: $12
• Maryland: $11
• Massachusetts: $12.75
• Michigan: $9.65
• Minnesota: $10 or $8.15 (see chart)
• Missouri: $9.45
• Montana: $8.65 or $4 (see chart)
• Nevada: $9 or $8 as of July 1, 2020 (see chart)
• New Jersey: $11
• New Mexico: $9
• New York: Depends on the employer’s size, industry and geographic location (see chart)
• Ohio: $8.70 or $7.25 (see chart)
• Oregon: $12 as of July 1, 2020
• South Dakota: $9.30
• Vermont: $10.96
• Washington: $13.50

What should employers do about the new minimum wage rates?

Employers that have employees working in any of the above-listed states should review their employees’ pay rates and make any required adjustments. Companies should also update their minimum wage poster notices as necessary to ensure compliance with local wage regulations. (Stratus.hr clients will receive updated posters from their HR representatives, and our Stratus.hr Payroll Representatives will contact clients regarding any affected employees.)

States that Pay the Federal Minimum Wage

Although the majority of states have increased their local minimum wage rates, there are still plenty of states whose minimum wage is at the federal minimum rate of $7.25/hr. Those states include:

• Alabama
• Georgia
• Idaho
• Indiana
• Iowa
• Kansas
• Kentucky
• Louisiana
• Mississippi
• New Hampshire
• North Carolina
• North Dakota
• Oklahoma
• Pennsylvania
• South Carolina
• Tennessee
• Texas
• Utah
• Virginia
• Wisconsin
• Wyoming

Local laws and ordinances may be different than this summary. If an employee works in an area with a higher minimum wage than the federal standard, the higher rate should be paid.

Minimum Wage for Tipped Employees

Federal minimum wage for tipped employees is $2.13/hr, provided that this hourly rate combined with tips equals at least the federal minimum wage. Several states require employers to pay tipped employees the full state minimum wage before tips, whereas others require employers to pay tipped employees a minimum cash wage above the federal minimum amount. See the state-specific laws regarding tipped employees.

Youth Minimum Wage

Workers under the age of 20 can be paid a minimum wage of $4.25/hr for the first 90 consecutive calendar days of employment when their work does not displace another worker. This applies to all employers covered by the FLSA, unless prohibited by State or local law. After 90 days, the teen must receive at least the federal minimum rate of $7.25/hr.

For questions about minimum wage or help with other wage and/or compliance matters, please contact our certified HR experts at HR@stratus.hr.

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• Is Hiring Teens a Good Alternative to a Tight Labor Market?
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