Several states and localities have announced minimum wage changes for 2016.
Fifteen states, plus the District of Columbia, index their minimum wages to rise automatically with the cost of living. Ten states currently index minimum wage increases each year: Arizona, Colorado, Florida, Missouri, Montana, Nevada, New Jersey, Ohio, Oregon and Washington (no change for 2016).
Five more states, plus the District of Columbia, will index minimum wage increases annually beginning in future years: Alaska (2017), D.C. (2017), Michigan (2019), Minnesota (2018), South Dakota (2016) and Vermont (2019).
The following chart shows the state minimum wage changes for 2016. Make sure you stay aware of any updates.
|DC||$11.50 (eff. 7/1/16)|
The federal contractor minimum wage is $10.10 per hour. Many localities have pending legislation for minimum wage changes, so stay on the lookout for more increases.
Interestingly, American Samoa just instituted its first minimum wage increase since 2009 and it varies by business type. The amounts range from $4.18 to $5.59 per hour worked.
Additionally, many states have tipped employee minimum wage rules and amounts that are lower. One notable exception is California, which does not have a lower minimum wage for tipped employees. The restaurant industry will be important to watch. Just recently, several restaurants in New York City have eliminated tips and increased staff wages to state regular minimums. There may be more coming.
Minimum wage rules are always a moving target, and it’s important to watch for changes that affect your business and your clients’ companies.