With 2017 just around the corner, it is time for employers in 19 different states to begin preparing for the increase in their state minimum wage that will go into effect on January 1, 2017. Each of these states has passed legislation that will increase their state minimum wage to be higher than the federal minimum wage.
What Is Minimum Wage?
The minimum wage is the lowest rate a non-exempt hourly employee can be paid under the Fair Labor Standard Act (FLSA). Note, there are some employees who are exempt from minimum wage requirements, including young workers under 20 and tipped employees.
Federal Minimum Wage
The federal minimum wage for non-exempt employees is set by provisions within the Fair Labor Standards Act (FLSA). The federal minimum wage law was first introduced in 1938 with a rate of $0.25 per hour. Over the years, there have been several increases to the rate, including the current rate of $7.25 an hour that went into effect on July 24, 2009. In instances where states have their own state minimum wage in addition to the federal minimum wage, employees are entitled to the higher of the two minimum rates.
| State | 2017 Minimum Wage |
|---|---|
| Alaska | $9.80 |
| Arizona | $8.05 |
| Arkansas | $8.50 |
| California | $10.50 |
| Colorado | $9.30 |
| Connecticut | $10.10 |
| Florida | $8.10 |
| Hawaii | $9.25 |
| Maine | $9.00 |
| Massachusetts | $11.00 |
| Michigan | $8.90 |
| Missouri | $7.70 |
| Montana | $8.15 |
| New Jersey | $8.44 |
| New York* | $9.70 |
| Ohio | $8.15 |
| South Dakota | $8.65 |
| Vermont | $10.00 |
| Washington | $11.00 |
*The $9.70 minimum wage for New York reflects the new rate for Greater New York. The new minimum wage for Nassau, Suffolk, and Westchester counties is $10.00. The new minimum wage rates for NYC is $10.50 for small employers and $11.00 for large employers.
Upcoming State Minimum Wage Increases
In addition to the scheduled increased that will go into effect on January 1, 2017, there are several states with indexed annual state minimum wage increases planned for either later in the year or in years to follow. Most of the time, these annual changes are to help keep up with the cost of living. In such instances, the anticipated increased amount is an estimate pending the final adjustment.
| State | Upcoming Changes |
|---|---|
| Alaska | Indexed Annual increases to begin January 1, 2017, based on either inflation or to remain $1.00 above the federal minimum wage, whichever is higher at the time. |
| Arizona | Indexed Annual Increases of $0.50 between January 1, 2017 and January 1, 2020 to reach final increased rate of $12.00 per hour. |
| California | Indexed Annual increases of $1.00 between January 1, 2018 and January 1, 2022. |
| Colorado | Indexed Annual Increase of $0.90 between January 1, 2018 and January 1, 2020 to reach final increased rate of $12.00 per hour. |
| District of Columbia | New city minimum wage of $12.50 per hour will go into effect in July 2017. After which, an Annual Indexed Increase of $0.75 per hour will go into effect. |
| Maine | Indexed Annual Increases of $0.50 between January 1, 2017 and January 1, 2020 to reach final increased rate of $12.00 per hour. |
| Maryland | Raising state minimum wage to $9.25 in July 2017 and again to $10.10 in July 2018. |
| Michigan | Raising state minimum to $9.25 in January 2018. |
| Minnesota | Indexed Annual Increase to go into effect January 1, 2018. |
| New York | Greater New York will increase its state minimum wage to $12.50 by the end of 2020. The minimum wage for New York City will be $15.00 by the end of 2021. |
| Washington | Indexed Annual Increases of $0.50 between January 1, 2017 and January 1, 2020 to reach final increased rate of $13.50 per hour. |
