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Connecticut to Increase Minimum Wage in 2014 and 2015

By David R. Golder, Beverly W. Garofalo and Michael J. Soltis
  • July 17, 2013

Governor Dannel P. Malloy has signed legislation to increase Connecticut’s hourly minimum wage over two years by $.75 to $9.00 by January 1, 2015. 

Under the new law (Public Act No. 13-117), effective January 1, 2014, the state minimum wage will rise from $8.25 per hour to $8.70 per hour. A second increase, effective January 1, 2015, will raise the rate to $9.00 per hour. 

In addition, the employer’s tip credit percentages will be adjusted to maintain the employer’s share of tipped employees’ wages at current dollar levels, despite the increase in the overall hourly minimum wage. Current law allows tips to comprise 31% of the minimum wage for hotel and restaurant employees and 11% of the minimum wage for bartenders. Thus, under current law, as long as employees’ tips cover the difference, hotel and restaurant employers must pay those workers 69% of the minimum wage ($5.69 per hour), and bartenders’ employers must pay bartenders 89% of the minimum wage ($7.34 per hour).

To maintain employer’s contribution at current dollar amounts, the new law will increase the tip credit percentage to 34.6% and 36.8% for hotel and restaurant workers in 2014 and 2015, respectively. Likewise, the new law will increase the tip credit percentage to 15.6% and 18.5% for bartenders in 2014 and 2015. Thus, tip credits will be calculated as follows:

Hotel and Restaurant Employee’s Tip Credit

 

2014

2015

Minimum Wage

$8.70

$9.00

Tip Credit

34.6%

($8.70 x .346 = $3.01)

36.8%

($9.00 x .368 = $3.31)

Employer’s Share

$5.69

($8.70 - $3.01)

$5.69

($9.00 - $3.31)

 

Bartender’s Tip Credit

 

2014

2015

Minimum Wage

$8.70

$9.00

Tip Credit

15.6%

($8.70 x .156 = $1.36)

18.5%

($9.00 x .185 = $1.66)

Employer’s Share

$7.34

($8.70 - $1.36)

$7.34

($9.00 - $1.66)

The Connecticut lawmakers dropped a provision that would have linked minimum wage increases to the Consumer Price Index beginning 2016.

If you have any questions about this or other workplace developments affecting your business, please contact the Jackson Lewis attorney with whom you regularly work.

©2013 Jackson Lewis P.C. This Update is provided for informational purposes only. It is not intended as legal advice nor does it create an attorney/client relationship between Jackson Lewis and any readers or recipients. Readers should consult counsel of their own choosing to discuss how these matters relate to their individual circumstances. Reproduction in whole or in part is prohibited without the express written consent of Jackson Lewis.

This Update may be considered attorney advertising in some states. Furthermore, prior results do not guarantee a similar outcome.

Jackson Lewis P.C. represents management exclusively in workplace law and related litigation. Our attorneys are available to assist employers in their compliance efforts and to represent employers in matters before state and federal courts and administrative agencies. For more information, please contact the attorney(s) listed or the Jackson Lewis attorney with whom you regularly work.

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