United States: 18 States Set To Ring In The New Year With Minimum Wage Increases

Executive Summary: With 2018 winding down, employers should be prepared for the minimum wage increases that are expected in the New Year. Even though the federal minimum wage has stagnated at $7.25 per hour since 2009, state legislatures have been active in increasing their respective minimum wage rates. In 2019, 21 states will increase their state’s minimum wage rate, with 18 of those increases taking effect on New Year’s Day or New Year’s Eve.

In light of these anticipated changes, employers should ensure their pay practices comply with the wage increases listed below. Employers should also be prepared to update their state minimum wage posters, as many states require employers to post up-to-date notices of the state minimum wage. Finally, in addition to the state-wide increases, cities and/or localities in your jurisdiction may also have increased minimum wage(s).

Don’t put off these tasks until the New Year, as these new requirements could end up catching you by surprise. Start 2019 off on the right foot and be prepared for the changes the new year will bring.

Alaska

Alaska’s minimum wage will increase from $9.84 to $9.89 on January 1, 2019. Alaska law requires the state to adjust its minimum wage annually for inflation using the Consumer Price Index (CPI). Notably, Alaska law prohibits tip credits, so this minimum wage increase applies to tipped employees as well. Under this statute, the Last Frontier’s minimum wage must be at least $1.00 over the federal minimum wage.

Arizona

Under Proposition 206, the Fair Wages and Healthy Families Act, Arizona’s minimum wage will increase from $10.50 to $11.00 on January 1, 2019. Arizona’s tipped minimum wage will also increase from $7.50 to $8.00. Under this act, Arizona’s minimum wage will reach $12.00 by 2020, and beginning in 2021, Arizona’s minimum wage will increase each year by the cost of living.

Arkansas

Just last month Arkansas voters passed Issue 5, increasing the state minimum wage over the next three years. Accordingly, Arkansas’s current minimum wage of $8.50 will increase to $9.25 on January 1, 2019. Pursuant to this vote, Arkansas’s minimum wage will reach $11.00 by 2021. Notably, this minimum wage increase does not affect Arkansas’s tip credit of $3.62.

California

On January 1, 2019, the minimum wage for California employers with 25 or fewer employees will increase from $10.50 to $11.00. The minimum wage for California employers with 26 or more employees will also increase from $11.00 to $12.00. By 2023 the state minimum wage will reach $15.00. Notably, California law prohibits tip credits, so this minimum wage increase applies to tipped employees as well.

Colorado

Colorado’s minimum wage will increase from $10.20 to $11.10 on January 1, 2019. The tipped employee minimum wage will also increase from $7.18 to $8.08. Colorado’s minimum wage will reach $12.00 by 2020.

Delaware

On October 1, 2019, Delaware’s minimum wage will increase from $8.75 to $9.25. By October 1, 2021, Delaware’s minimum wage will reach $10.25. This minimum wage increase does not affect Delaware’s tip credit of $2.23.

District of Columbia

On July 1, 2019, D.C.’s minimum wage will increase from $13.25 to $14.00. The District’s tipped employee minimum wage will also increase from $3.89 to $4.45. By 2020, the Capitol’s minimum wage rate will reach $15.00.

Florida

Effective January 1, 2019, Florida's minimum wage rate will increase by 21 cents, from $8.25 to $8.46. Florida’s tipped employee minimum wage will also increase by 21 cents, from $5.23 to $5.44. This increase is based on the percentage increase in the Consumer Price Index ("CPI") for the South region. Significantly, even if the CPI decreases in a given year, the Sunshine State’s minimum wage will never decrease.

Maine

Maine’s minimum wage rate will increase from $10.00 to $11.00 effective January 1, 2019. The state’s tipped minimum wage will also increase from $5.00 to $5.50 in the New Year. By 2020, Maine’s minimum wage will reach $12.

Massachusetts

Earlier this year, Massachusetts’s Governor Charlie Baker signed a bill increasing the state’s minimum wage from $11.00 to $15.00 by 2023. In accordance with the bill, on January 1, 2019, the Bay State’s minimum wage will increase to $12.00 and the tipped minimum wage will increase to $4.35.

Minnesota

Minnesota’s minimum wage rates will be adjusted for inflation on January 1, 2019. For “large employers” (employers with annual gross revenue of $500,000 or more), the minimum wage will increase from $9.65 to $9.86. For “small employers” (employers with annual gross revenue of less than $500,000) the minimum wage will increase from $7.87 to $8.04. Notably, Minnesota law prohibits tip credits, so this minimum wage increase applies to tipped employees as well.

Missouri

Just last month, Missouri voters passed Proposition B: The $12 Minimum Wage Initiative. In accordance with Proposition B, Missouri’s minimum wage will increase from $7.85 to $8.60 on January 1, 2019. Similarly, Missouri’s tipped minimum wage will increase from $3.93 to $4.30. Missouri’s minimum wage will increase by 85 cents per a year thereafter until it reaches $12.00 in 2023. Employers engaged in retail or service businesses whose annual gross income is less than $500,000 are not required to pay the state minimum wage rate.

Montana

Montana’s minimum wage will rise to $8.50 on January 1, 2019. Notably, Montana law prohibits tip credits, so this minimum wage increase applies to tipped employees as well.

New Jersey

On January 1, 2019, New Jersey’s minimum wage will increase from $8.60 to $8.85. The Garden State’s tipped minimum wage of $2.13 remains unchanged.

New York

As part of New York’s Minimum Wage Act, requiring all New York employers to eventually pay at least $15.00 per hour, the state’s minimum wage will increase on New Year’s Eve. On December 31, 2018, the minimum wage for New York City “big employers” (11 or more employees) will increase from $13.00 to $15.00, and the tipped minimum wage will increase from $8.65 to $10.00. The minimum wage for New York City “small employers” (10 or fewer employees) will increase from $12.00 to $13.50, and the tipped minimum wage will increase from $8.00 to $9.00. The minimum wage for employers in Long Island and Westchester will increase from $11.00 to $12.00, and the tipped employee minimum wage will increase from $7.50 to $8.00. The minimum wage for employers in the remainder of the state will increase from $10.40 to $11.10, and the tipped employee minimum wage rate will remain $7.50.

Employers should be aware that New York’s state minimum wage laws permit regulations known as “Wage Orders,” which govern the minimum wage for specific industries, including the hospitality, building service, and farm industries.

Ohio

In accordance with Ohio’s annual indexed wage increases, Ohio’s minimum wage will increase from $8.30 to $8.55 on January 1, 2019. The state’s minimum wage for tipped employees will also increase from $4.15 to $4.30. Employers who gross less than $314,000 are not subject to the Buckeye State’s minimum wage requirements, but still must comply with the federal minimum wage rate.

Oregon

On July 1, 2019, Oregon’s standard minimum wage rate will increase from $10.75 to $11.25. The minimum wage for employers in the Portland metro area will increase from $12.00 to $12.50. The minimum wage for employers in Oregon’s “Nonurban Counties” (Baker, Klamath, Coos, Lake, Crook, Malheur, Curry, Morrow, Douglas, Sherman, Gilliam, Umatilla, Grant, Union, Harney, Wallowa, Jefferson, and Wheeler) will increase from $10.50 to $11.00. Notably, Oregon law prohibits tip credits, so this minimum wage increase applies to tipped employees as well.

Rhode Island

On January 1, 2019, Rhode Island’s minimum wage will increase from $10.10 to $10.50. The minimum wage for tipped employees remains $3.89.

South Dakota

South Dakota’s minimum wage will increase from $8.85 to $9.10 on January 1, 2019. The minimum wage for tipped employees will also increase from $4.43 to $4.55.

Vermont

Vermont’s minimum wage increases annually every January 1 in accordance with an index formula. Accordingly, on January 1, 2019, Vermont’s minimum wage will increase from $10.50 to $10.78. The minimum wage for tipped employees will increase from $5.25 to $5.39.

Washington

In accordance with a ballot measure approved by voters in 2016, Washington’s minimum wage will increase from $11.50 to $12.00 on January 1, 2019. By 2020, Washington’s minimum wage will be $13.50. The Evergreen State does not provide a separate wage for tipped employees.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.