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2018 Minimum Wage Rate Increases: Are You Ready?

By Jeffrey W. Brecher, David R. Golder, Richard I. Greenberg and Cary G. Palmer
  • November 15, 2017

The federal minimum wage has remained stagnant at $7.25 an hour since 2009. In the absence of an increase to the federal minimum wage, an increasing number of states, cities, and other municipalities have enacted statutes providing for minimum wage rates in excess of (and, in some cases, more than twice as high as) the federal rate.

When it comes to the jurisdictions enacting these minimum wage statutes, size does not matter: both Emeryville, California (population about 12,000), and New York City (population 8.5 million) now have such statutes. Beginning in 2018, at least three municipalities (Seattle, Washington (larger employers only), and Mountain View and Sunnyvale, California) will reach the elusive $15.00 per hour wage rate often identified by politicians and employee advocates as the minimum “living” rate necessary in today’s economy.

Speaking of California, employers operating in the Golden State face the possibility of nearly two dozen different minimum wage statutes, depending on where the employee works. Similarly, employers in New York must pay different minimum wage rates depending on whether employees work in New York City, Long Island, Westchester, or elsewhere in the state. Moreover, the rates in New York City also depend on the size of the employer: larger employers must pay $13.00 per hour, small employers must pay $12.00 per hour. Meanwhile, employers operating in and around Cook County, Illinois, are still attempting to wade their way through the legalities of that county’s wage ordinance, which arguably applies to all 130+ municipalities in the county, but approximately 80 percent of the municipalities have chosen to opt out of the county ordinance.

Many minimum hourly wage statutes passed in 2016 or earlier incorporate pre-determined annual “stepped” increases or potential annual increases based on a particular consumer price index (CPI). Increases resulting in such laws enacted and effective this year include those in Santa Fe, New Mexico ($11.09), effective March 1, 2017, and in Maryland ($9.25) and Washington, D.C. ($12.50), both effective July 1, 2017. On the other hand, anticipated wage increases in some cities in Missouri and Iowa were superseded by subsequent state statutes that quashed local wage rates by preempting them, including Missouri’s new law setting a $7.70 minimum wage statewide and Iowa’s law requiring only the $7.25 federal minimum. Currently, 25 states have enacted such local wage preemption statutes.

Not all of the upcoming minimum wage increases will go into effect at the beginning of next year (or, in the quirky case of New York, on the last day of this year). Rather, many municipal increases will take effect on July 1, 2018, including those in a number of California cities and in Minneapolis, Minnesota. Because the list is becoming so extensive, we will alert you to those changes separately as their effective dates draw closer next spring. The minimum wage for “tipped” employees, where allowed, is not reflected in this article, nor are the “living wage” ordinances passed by some municipalities and applicable only to that local government’s employees, contractors, program beneficiaries, and the like.

Below are the minimum wage increases slated to go into effect on January 1, 2018 (December 31, 2017, for those in New York):

Jurisdiction Rate Increase
Alaska (statewide) $9.84 $0.04
Arizona (statewide) $10.50 $0.50
    Flagstaff $11.00 $0.50
California (statewide) $11.00 (26+ employees) $0.50
  $10.50 (≤25 employees) $0.50
    Cupertino $13.50 $1.50
    El Cerrito  $13.60  $1.35
    Los Altos  $13.50  $1.50
    Milpitas  $12.00  $1.00
    Mountain View  $15.00  $2.00
    Palo Alto  $13.50  $1.50
    Richmond  $13.41  $1.11
    San Jose  $13.50  $1.50
    San Mateo  $13.50  $1.50
    San Mateo (501c(3) non-profits)  $12.00  $1.50
    Santa Clara  $13.00  $1.90
    Sunnyvale  $15.00  $2.00
Colorado (statewide) $10.20 $0.90
Florida (statewide) $8.25 $0.15
Hawaii (statewide) $10.10 $0.85
Maine (statewide) $10.00 $1.00
Michigan (statewide) $9.25 $0.35
Minnesota (statewide) $9.65 ($500K+ revenue) $0.05
  $7.87 (<$500K revenue) $0.12
    Minneapolis $10.00 (>100 employees) $2.75
Montana (statewide) $8.30 $0.15
New Jersey (statewide) $8.60 $0.16
New Mexico    
    Albuquerque $8.95 $0.15
  $7.95 (if employer pays at least $2,500 annually toward healthcare or childcare)  
    Bernalillo County  $8.85  $0.15
    Las Cruces $9.45 $0.25
New York (statewide) $10.40 $0.70
  $11.75 (fast food workers) $1.00
    Nassau/Suffolk/Westchester Counties $11.00 $1.00
  $11.75 (fast food workers) $1.00
    New York City (>10 employees) $13.00 $2.00
  $13.75 (fast food workers) $1.50
    New York City (≤10 employees) $12.00 $1.50
  $13.50 (fast food workers) $1.50
Ohio (statewide) $8.30 $0.15
  $7.25 (gross sales <$305K)  
Rhode Island (statewide) $10.10 $0.50
South Dakota (statewide) $8.85 $0.20
Vermont (statewide) $10.50 $0.50
Washington (statewide) $11.50 $0.50
    Seattle (500+ employees in the U.S.) $15.00 $1.50
    Seattle (< 500 employees in the U.S.) $11.50* $0.50
    SeaTac (hospitality & transportation workers only) $15.64 $0.29
    Tacoma $12.00 $0.85

 

*For “Schedule 2” employers (<500 employees) in Seattle, the minimum hourly wage will be $11.50, but the minimum hourly compensation will be $14.00. The additional $2.50 may be based on wages, tips, bonuses, commissions, or medical benefits contributions.

Jackson Lewis is available to assist employers in achieving compliance with these and other workplace requirements.

©2017 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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