Minimum Wage, Tipped and Exempt Employee Pay in 2020: A Rates-Only Update

Minimum wage laws can affect businesses of all sizes, whether operating nationwide, in multiple jurisdictions, or only in one state, county, or city. To help manage this challenge, below we provide a rates-only update that details scheduled state- and local-level wage increases throughout 2020 so employers can determine the minimum amount they must pay non-exempt, tipped, and certain exempt employees.

Because pending or future legislation might change minimum wage rates that will apply in 2020, we recommend employers follow developments via our monthly article, WPI Wage Watch: Minimum Wage, Tip, and Overtime Developments, and consult with counsel to confirm rates did not change since publication.

2020 Minimum Wage Wage Increases1

Please note the New York rates may also increase on December 31, 2020. However, for this article we focus on the New York rates that will apply every day in 2020 except December 31, 2020.

Jurisdiction

Increase Date

2019 Minimum Wage (MW) (or Pre-Change Rate2)

2020 MW

Increase

Alaska

January 1

$9.89

$10.19

30¢

Arizona

January 1

$11.00

$12.00

$1.00

Flagstaff, AZ

January 1

$12.00

$13.00

$1.00

Arkansas

January 1

$9.25

$10.00

75¢

California (≥26)

January 1

$12.00

$13.00

$1.00

California (≤25)

January 1

$11.00

$12.00

$1.00

Alameda, CA

July 1

$13.50

$15.00

$1.50

Belmont, CA

January 1

$13.50

$15.00

$1.50

Berkeley, CA (General)

July 1

$15.59

TBD

TBD

Berkeley, CA (Youth Works & Job Training)

July 1

$14.50

TBD

TBD

Cupertino, CA

January 1

$15.00

$15.35

35¢

Daly City, CA

January 1

$12.00

$13.75

$1.75

El Cerrito, CA

January 1

$15.00

$15.37

37¢

Emeryville, CA

July 1

$16.30

TBD

TBD

Fremont, CA (≥26)

July 1

$13.50

$15.00

$1.50

Fremont, CA (≤25)

July 1

$12.00 (State)

$13.50

$1.50

Long Beach (Hotel)

July 1

$14.97

TBD

TBD

Los Altos, CA

January 1

$15.00

$15.40

40¢

Los Angeles, CA (≥26)

July 1

$14.25

$15.00

75¢

Los Angeles, CA (≤25)

July 1

$13.25

$14.25

$1.00

Los Angeles, CA (Hotel)

July 1

$16.63

TBD

TBD

Los Angeles County (Unincorp.), CA (≥26)

July 1

$14.25

$15.00

75¢

Los Angeles County (Unincorp.), CA (≤25)

July 1

$13.25

$14.25

$1.00

Malibu, CA (≥26)

July 1

$14.25

$15.00

75¢

Malibu, CA (≤25)

July 1

$13.25

$14.25

$1.00

Menlo Park, CA

January 1

$12.00 or $11.00 (State)

$15.00

$3.00 or $4.00

Milpitas, CA

July 1

$15.00

TBD

TBD

Mountain View, CA

January 1

$15.65

$16.05

40¢

Novato, CA (≥100)

January 1 & July 1

$12.00 & $13.00 (State)

$13.00 & $15.00

$1.00 & $2.00

Novato, CA (26-99)

January 1 & July 1

$12.00 & $13.00 (State)

$13.00 & $14.00

$1.00 & $1.00

Novato, CA (≤25)

January 1 & July 1

$11.00 & $12.00 (State)

$12.00 & $13.00

$1.00 & $1.00

Oakland, CA (General)

January 1

$13.80

$14.14

34¢

Oakland, CA (Hotel – No Health Benefits)

July 1

$20.00

TBD

TBD

Oakland, CA (Hotel –Health Benefits)

July 1

$15.00

TBD

TBD

Palo Alto, CA

January 1

$15.00

$15.40

40¢

Pasadena, CA (≥26)

July 1

$14.25

$15.00

75¢

Pasadena, CA (≤25)

July 1

$13.25

$14.25

$1.00

Petaluma, CA (≥26)

January 1

$12.00 (State)

$15.00

$3.00

Petaluma, CA (≤25)

January 1

$11.00 (State)

$14.00

$3.00

Redwood City, CA

January 1

$13.50

$15.38

$1.88

Richmond, CA (Without Benefits)

January 1

$15.00

No Change3

N/A

Richmond, CA (With Benefits4)

January 1

$13.50

No Change

N/A

San Diego

January 1

$12.00

$13.00

$1.00

San Francisco, CA (General)

July 1

$15.59

TBD

TBD

San Francisco, CA (Gov't-Supported Employee)

July 1

$13.79

TBD

TBD

San Jose, CA (General)5

January 1

$15.00

$15.25

25¢

San Leandro, CA

July 1

$14.00

$15.00

$1.00

San Mateo, CA (General)

January 1

$15.00

$15.38

38¢

San Mateo, CA (Non-Profit)

January 1

$13.50

$15.38

$1.88

Santa Clara, CA

January 1

$15.00

$15.40

40¢

Santa Monica, CA (≥26)

July 1

$14.25

$15.00

75¢

Santa Monica, CA (≤25)

July 1

$13.25

$14.25

$1.00

Santa Monica, CA (Hotels)

July 1

$16.63

TBD

TBD

Santa Rosa, CA (≥26)

July 1

$13.00 (State)

$15.00

$2.00

Santa Rosa, CA (≤25)

July 1

$12.00 (State)

$14.00

$2.00

Sonoma, CA (≥26)

January 1

$12.00 (State)

$13.50

$1.50

Sonoma, CA (≤25)

January 1

$11.00 (State)

$12.50

$1.50

South San Francisco, CA

January 1

$12.00 or $11.00 (State)

$15.00

$3.00 or $4.00

Sunnyvale, CA

January 1

$15.65

$16.05

40¢

Colorado

January 1

$11.10

$12.00

90¢

Connecticut

September 1

$11.00

$12.00

$1.00

D.C.

July 1

$14.00

$15.00

$1.00

Florida

January 1

$8.46

$8.56

10¢

Illinois

January 1 & July 1

$8.25

$9.25 & $10

$1.00 & 75¢

Chicago, IL

July 1

$13.00

TBD

TBD

Cook County, IL

July 1

$12.00

$13.00

$1.00

Maine

January 1

$11.00

$12.00

$1.00

Portland, ME

January 1 & July 1

$11.11 & $12.00 (State)

$12.006 & TBD

89¢ & TBD

Maryland (≥15)

January 1

$10.10

$11.00

90¢

Maryland (≤14)

January 1

$10.10

$11.00

90¢

Montgomery County, MD (≥51)

July 1

$13.00

$14.00

$1.00

Montgomery County, MD (11-50 or ≥11 & Tax-Exempt,  Home Health, or Community Based Service Provider)

July 1

$12.50

$13.25

75¢

Montgomery County, MD (≤10)

July 1

$12.50

$13.00

50¢

Massachusetts

January 1

$12.00

$12.75

75¢

Michigan7

January 1

$9.45

$9.65

20¢

Minnesota ($500K Gross)

January 1

$9.86

$10.00

14¢

Minnesota (<$500K Gross & Certain Hotels, etc.)

January 1

$8.04

$8.15

11¢

Minneapolis, MN (≥101)

July 1

$12.25

$13.25

$1.00

Minneapolis, MN (≤100)

July 1

$11.00

$11.75

75¢

Saint Paul, MN (≥10,001)

January 1

$9.86 (State – Likely)

$12.50

$2.64

Saint Paul, MN (101-10,000)

July 1

$9.86 (State – Likely)

$11.50

$1.64

Saint Paul, MN (6-100)

July 1

$9.86 or $8.04 (State – Likely)

$10.00

14¢ or $1.96

Saint Paul, MN (≤5)

July 1

$8.04 (State – Likely)

$9.25

$1.21

Missouri

January 1

$8.60

$9.45

85¢

Montana

January 1

$8.50

$8.65

15¢

Nevada (No Health Benefits Offered)

July 1

$8.25

$9.00

75¢

Nevada (Health Benefits Offered)

July 1

$7.25

$8.00

75¢

New Jersey (General)

January 1

$10.00

$11.00

$1.00

New Jersey (Small or Seasonal Employer)

January 1

$8.85

$10.30

$1.45

New Jersey (Farm Hourly or Piece Rate)

January 1

$8.85

$10.30

$1.45

New Mexico

January 1

$7.50

$9.00

$1.50

Albuquerque, NM (No Health &/or Childcare Benefits)

January 1

$9.20

$9.35

15¢

Albuquerque, NM (Health &/or Childcare Benefits)

January 1

$8.20

$8.35

15¢

Bernalillo County (Unincorp.), NM (No Health &/or Childcare Benefits)

January 1

$9.05

$9.20

15¢

Bernalillo County (Unincorp.), NM (Health &/or Childcare Benefits)

January 1

$8.05

$8.20

15¢

Las Cruces, NM

January 1

$10.10

$10.25

15¢

Santa Fe, NM8

March 1

$11.80

TBD

TBD

Santa Fe County (Unincorp.), NM

March 1

$11.80

TBD

TBD

New York (NYC ≥11)

December 31, 2019

$15.00

No change

N/A

New York (NYC ≤10)

December 31, 2019

$13.50

$15.00

$1.50

New York (NYC Fast Food)

December 31, 2019

$15.00

No change

N/A

New York (Non-NYC Fast Food)

December 31, 2019

$12.75

$13.75

$1.00

New York (Nassau, Suffolk & Westchester Counties)

December 31, 2019

$12.00

$13.00

$1.00

New York (Remainder of State)

December 31, 2019

$11.10

$11.80

70¢

Ohio

January 1

$8.55

$8.70

15¢

Oregon (Urban)9

July 1

$12.50

$13.25

75¢

Oregon (General)

July 1

$11.25

$12.00

75¢

Oregon (Nonurban)

July 1

$11.00

$11.50

50¢

South Dakota

January 1

$9.10

$9.30

20¢

Vermont

January 1

$10.78

$10.96

18¢

Washington

January 1

$12.00

$13.50

$1.50

SeaTac, WA

January 1

$16.09

$16.34

25¢

Seattle, WA (≥501)

January 1

$16.00

$16.39

39¢

Seattle, WA (≤500 Min. Wage)

January 1

$12.00

$13.50

$1.50

Seattle, WA (≤500 Min. Hourly Comp.)10

January 1

$15.00

$15.75

75¢

Tacoma, WA

January 1

$12.35

$13.50 (State Law)11

$1.15

2020 Tipped Rate Increases

In certain places, employers may be able to count tips an employee receives toward the minimum wage. In these jurisdictions, if the direct wage an employer pays an employee and tips equals the minimum wage, an employer satisfies its minimum wage obligation. However, if the direct wage plus tips does not equal the minimum wage, an employer must pay the employee the difference. Directly below we highlight the minimum cash wage (MCW) that may be paid, and the maximum tip credit (TC) employers can claim, for covered tipped employees, as well as the amount of the increase. Please note that in the following states with 2020 rate increases, tip credits are prohibited (so they are not included below): Alaska; California; Minnesota; Montana; Nevada; Oregon; and Washington State. Finally, because New York has varying standards, we include the numbers in a standalone section after the below chart.

Jurisdiction

Increase Date

2019 MCW (or Pre-Change Rate12)

2020 MCW

2019 TC (or Pre-Rate Change)

2020 TC

Arizona

January 1

$8.00

$9.00 ($1.00)

$3.00

No Change

Flagstaff, AZ

January 1

$9.00

$10.00 ($1.00)

$3.00

No Change

Arkansas

January 1

$2.63

No Change

$6.62

$7.37 (75¢)

Colorado

January 1

$8.08

$8.98 (90¢)

$3.02

No Change

Connecticut (Hotel or Restaurant)

September 1

$6.38

No Change

$4.62

$5.62 ($1.00)

Connecticut (Bartender)

September 1

$8.23

No Change

$2.77

$3.77 ($1.00)

D.C.

July 1

$4.45

$5.00 (55¢)

$9.55

$10.00 (45¢)

Florida

January 1

$5.44

$5.54 (10¢)

$3.02

No Change

Illinois

January 1 & July 1

$4.95

$5.55 (60¢) & $6.00 (45¢)

$3.30

$3.70 (40¢) & $4.00 (30¢)

Chicago, IL

July 1

$6.40

TBD

$6.60

TBD

Cook County, IL

July 1

$5.25

TBD

$6.75

TBD

Maine

January 1

$5.50

$6.00 (50¢)

$5.50

$6.00 (50¢)

Portland, ME

January 1 & July 1

$5.50

$6.00 (50¢) & TBD

$5.61

$6.00 (39¢) & TBD

Maryland (≥15)

January 1

$3.63

No Change

$6.47

$7.37 (90¢)

Maryland (≤14)

January 1

$3.63

No Change

$6.47

$7.37 (90¢)

Montgomery County, MD (≥51)

July 1

$4.00

No Change

$9.00

$10.00 ($1.00)

Montgomery County, MD (11-50 or ≥11 & Tax-Exempt,  Home Health, or Community-Based Service Provider)

July 1

$4.00

No Change

$8.50

$9.25 (75¢)

Montgomery County, MD (≤10)

July 1

$4.00

No Change

$8.50

$9.00 (50¢)

Massachusetts

January 1

$4.35

$4.95 (60¢)

$7.65

$7.80 (15¢)

Michigan13

January 1

$3.59

$3.67 (08¢)

$5.86

$5.98 (12¢)

Missouri

January 1

$4.30

$4.725 (42.5¢)

$4.30

$4.725 (42.5¢)

New Jersey14

January 1

$2.63

$3.13 (50¢)

$7.37

$7.87 (50¢)

New Mexico

January 1

$2.13

$2.35 (22¢)

$5.37

$6.65 ($1.28)

Albuquerque, NM (No Health &/or Childcare Benefits)

January 1

$5.50

$5.60 (10¢)

$3.70

$3.75 (05¢)

Albuquerque, NM (Health &/or Childcare Benefits)

January 1

$5.50

$5.60 (10¢)

$2.70

$2.75 (05¢)

Bernalillo County (Unincorp.), NM (No Health &/or Childcare Benefits)

January 1

$2.13

$2.35 (22¢) (State Rate)

$6.92

$6.85 (-07¢)

Bernalillo County (Unincorp.), NM (Health &/or Childcare Benefits)

January 1

$2.13

$2.35 (22¢) (State Rate15)

$5.92

$5.85 (-07¢)

Las Cruces, NM

January 1

$4.04

$4.10 (06¢)

$6.06

$6.15 (09¢)

Santa Fe, NM

March 1*

$2.1316

$2.35 (22¢) (*1/117) & TBD

$9.67

TBD

Santa Fe County (Unincorp.), NM

March 1

$3.53

TBD

$8.27

TBD

Ohio

January 1

$4.30

$4.35 (05¢)

$4.25

$4.35 (10¢)

South Dakota

January 1

$4.55

$4.65 (10¢)

$4.55

$4.65 (10¢)

Vermont

January 1

$5.39

$5.48 (09¢)

$5.39

$5.48 (09¢)

New York Tip Rates

Tipped employee standards can be more complicated in New York, so we give the Empire State its own section. First, we discuss generally applicable tip standards, then standards that apply in the hospitality industry, which vary depending on an employee’s role and the place of employment.

Note that some New York rates will also increase on December 31, 2020. However, for this article we focus on the New York rates that will apply in every day in 2020 except December 31, 2020.

Generally: If an employee’s weekly tip average is less than the Low amount, employers cannot claim a tip credit. If an employee’s weekly tip average is between the Low (L) and High (H) amounts, the tip credit cannot exceed the Low amount. If an employee’s weekly tip average equals or exceeds the High amount, the tip credit cannot exceed the High amount.

Jurisdiction

Increase Date

2019 MCW L&H (or Pre-Change Rate18)

2020 MCW L&H

2019 TC L&H

2020 TC L&H

New York (NYC ≥11)

December 31, 2019

$12.75
$11.35

No Change

$2.25
$3.65

No Change

New York (NYC ≤10)

December 31, 2019

$11.45
$10.20

$12.75 ($1.30)
$11.35 ($1.15)

$2.05
$3.30

$2.25 (20¢)
$3.65 (35¢)

New York (Nassau, Suffolk & Westchester Counties)

December 31, 2019

$10.20
$9.05

$11.05 (85¢)
$9.80 (75¢)

$1.80
$2.95

$1.95 (15¢)
$3.20 (25¢)

New York (Remainder of State)

December 31, 2019

$9.45
$8.40

$10.05 (60¢)
$8.90 (50¢)

$1.65
$2.70

$1.75 (10¢)
$2.90 (20¢)

Hospitality Industry

Service Employee: An employer must directly pay a service employee at least the hourly Cash Wage (CW), and cannot claim a tip credit that exceeds the hourly Tip Credit rate (TC). However, an employer’s ability to claim the tip credit is dependent on an employee’s weekly tip average equaling at least the hourly Tip Threshold (TT) (or TT(R) for resort hotel service employees) and an employee’s direct wage plus tips equaling or exceeding the minimum wage.

Jurisdiction

Increase Date

2019 MCW (or Pre-Change Rate19)

2020 MCW

2019 TC

2020 TC

New York (NYC ≥11)

December 31, 2019

$12.50

No Change

$2.50

No Change

New York (NYC ≤10)

December 31, 2019

$11.25

$12.50 ($1.25)

$2.25

$2.50 (25¢)

New York (Nassau, Suffolk & Westchester Counties)

December 31, 2019

$10.00

$10.85 (85¢)

$2.00

$2.15 (15¢)

New York (Remainder of State)

December 31, 2019

$9.25

$9.85 (60¢)

$1.85

$1.95 (10¢)

 

Jurisdiction

Increase Date

2019 TT (or Pre-Change Rate20)

2020 TT

2019 TT(R)

2020 TT(R)

New York (NYC ≥11)

December 31, 2019

$3.25

No Change

$8.40

No Change

New York (NYC ≤10)

December 31, 2019

$2.95

$3.25 (30¢)

$7.60

$8.40 (80¢)

New York (Nassau, Suffolk & Westchester Counties)

December 31, 2019

$2.60

$2.80 (20¢)

$6.75

$7.30 (55¢)

New York (Remainder of State)

December 31, 2019

$2.40

$2.55 (15¢)

$6.25

$6.60 (35¢)

Food Service Worker: A food service worker must receive a wage of at least the hourly Cash Wage (CW), and a tip credit cannot exceed the below-specified hourly rate (TC) provided the total of tips received plus the wages equals or exceeds the hourly total minimum wage rate (MW). Employers cannot claim a tip credit for fast food employees.

Jurisdiction

Increase Date

2019 MCW (or Pre-Change Rate21)

2020 MCW

2019 TC

2020 TC

New York (NYC ≥11)

December 31, 2019

$10.00

No Change

$5.00

No Change

New York (NYC ≤10)

December 31, 2019

$9.00

$10.00 ($1.00)

$4.50

$5.00 (50¢)

New York (Nassau, Suffolk & Westchester Counties)

December 31, 2019

$8.00

$8.65 (65¢)

$4.00

$4.35 (35¢)

New York (Remainder of State)

December 31, 2019

$7.50

$7.85 (35¢)

$3.60

$3.95 (35¢)

Exempt Employees

Notwithstanding the 2020 increase concerning the minimum amount22 employers must pay executive, administrative, and professional employees for these workers to be exempt from the Fair Labor Standards Act’s (FLSA) minimum wage and overtime requirements, currently at least five states have pay requirements that will (or can) exceed the revised federal standard: Alaska, California, Colorado (Executive or Supervisor), Maine, and New York State (Executive or Administrative).23 Additionally, Pennsylvania and Washington State have proposals that will exceed the FLSA rate, and Michigan's governor has directed the state labor department to increase the minimum amount employers must pay these employees. It remains possible other states will join this list.

Under some state laws, the aforementioned categories of employees are exempt only from overtime requirements, meaning employers must pay them at least the state minimum wage for all hours worked, and many of these state minimum wage rates will increase in 2020. Additionally, in 2020, there will be state law increases in the minimum hourly pay required to qualify for the state-law equivalent of the FLSA’s 7(i) retail or service establishment overtime exemption for employees paid commissions. Below we discuss these pay-related 2020 changes.

Executive, Administrative, or Professional Exemption Minimum Pay Increases

Under the FLSA, to be a bona fide executive, administrative, or professional employee, employer must compensate the individual on a salary or fee basis (only for administrative and professional employees) at a specific rate per week, excluding board, lodging, or other facilities. On January 1, 2020, this minimum salary or fee will increase from $455 to $684 per week. Employers may translate the $684 a week amount into equivalent amounts for periods longer than one week: $1,368 (Bi-weekly); $1,482 (Semi-monthly); $2,964 (Monthly); $35,568 (Annual). Various states' minimum salary or fee amounts exceed the federal rate, and in 2020, these pay requirements will change.

Note that the New York rates may also increase on December 31, 2020. However, for this article we focus on the New York rates that will apply every day in 2020 except December 31, 2020.

Jurisdiction

2019 Annual

2020 Annual

2019 Monthly

2020 Monthly

2019 Weekly

2020 Weekly

Alaska24

$41,142.40

$42,390.40

$3,428.53

$3,532.53

$791.20

$815.20

California25 (≥26)

$49,920

$54,080

$4,160

$4,506.67

$960

$1,040

California (≤25)

$45,760

$49,920

$3,813.34

$4,160

$880

$960

Colorado26 (If 40, 50, or 60 Hrs/Wk)

>$23,088
>$28, 860
>$34,632

>$24,960
>$31,200
>$37,440

>$1,924
>$2,405
>$2,886

>$2,080
>$2,600
>$3,120

>$444
>$555
>$666

>$480
>$600
>$720

Maine27

>$33,000

>$36,000

>$2,750

>$3,000

>$634.61

>$692.30

New York28 (NYC ≥11)

$58,500

No Change

$4,875

No Change

$1,125

No Change

New York (NYC ≤10)

$52,650

$58,500

$4,387.50

$4,875

$1,012.50

$1,125

New York (Nassau, Suffolk & Westchester Counties)

$46,800

$50,700

$3,900

$4,225

$900

$975

New York (Remainder of State)

$43,264

$46,020

$3,605.34

$3,835

$832

$885

Additionally, California law provides that certain computer software employees, as well as licensed physicians and surgeons, are exempt from state overtime requirements if they receive a minimum hourly, monthly, or yearly rate, which is determined annually based on cost-of-living changes. Effective January 1, 2020, the computer software employee minimum hourly rate will increase from $45.41 to $46.55 per hour, the minimum monthly salary amount will increase from $7,883.62 to $8,080.71, and the minimum annual salary amount will increase from $94,603.25 to $96,968.33. For licensed physicians and surgeons, the minimum hourly rate of pay will increase from $82.72 to $84.79.

White Collar Employees Covered by Minimum Wage

In various states, executive, administrative, or professional employees are exempt from state overtime requirements, but not exempt from state minimum wage requirements. In these jurisdictions, such employees must earn at least the applicable minimum wage for each hour worked in a workweek. The minimum wage in some of these states will increase on January 1, 2020:29 Arizona ($12.00); Illinois ($9.25); Massachusetts ($12.75); New Jersey ($11.00 under the general rate; $10.30 for small or seasonal employers); and South Dakota ($9.10). Moreover, on July 1, 2020, the Illinois minimum wage will further increase to $10.00 per hour, and the Nevada minimum wage will increase to $9.00 or $8.00 per hour, depending on whether an employer offers health benefits. Note that in two aforementioned states – Arizona and Illinois – local minimum wage rates may apply (see above).

Commissioned Employee Overtime Exemption

To qualify under the FLSA’s 7(i) overtime exception, the regular rate of pay for an employee of a retail or service establishment must exceed one-and-a-half times the federal minimum wage, and more than half the employee’s compensation for a representative period (not less than one month) must represent commissions on goods or services. In the following states with 2020 rate changes, the 7(i)-type exemption requires – in part – an employee’s pay to either equal or exceed one-and-a-half times the state minimum wage.30

California: An employee’s earnings must exceed one-and-a-half times the state minimum wage, which on January 1, 2020, will increase to $13.00 per hour for employers with 26 or more employees and to $12.00 per hour for employees with 25 or fewer employees.

Colorado: An employee’s regular rate of pay must be at least one-and-a-half times the state minimum wage, which on January 1, 2020, will increase to $12.00 per hour.

Connecticut: An employee's regular rate of pay must exceed two times the state minimum wage, which on September 1, 2020, will increase to $12.00 per hour.

District of Columbia: An employee’s regular rate of pay must exceed one-and-a-half times the district minimum wage, which on July 1, 2020, will increase to $15.00 per hour.

Minnesota: An employee’s regular rate of pay must exceed one-and-a-half times the state minimum wage, which on January 1, 2020, will increase to $10.00 per hour for employers with $500,000 in annual gross sales, and to $8.15 per hour for employers with less than $500,000 in annual gross sales, and certain hotels.

Nevada: An employee’s regular rate must exceed one-and-a-half times the state minimum wage, which on July 1, 2020, will increase to $9.00 per hour if an employer does not offer health benefits or $8.00 per hour if an employer offers health benefits.

New York: The general wage order31 provides – in part – that employers must pay an employee for overtime at a wage rate of one-and-one-half times the employee's regular rate in the manner and methods provided in and subject to the exemptions of section 7 of the FLSA. However, it is unclear whether employers must base payment on the federal or state minimum wage. If the state minimum wage, the wage rate will increase on December 31, 2019. In New York City, the minimum wage applicable to employers with 11 or more employees will remain $15.00 and the rate for employers with 10 or fewer employees will increase to $15.00. The minimum wage in Nassau, Suffolk, and Westchester Counties will increase to $13.00. Finally, in the remainder of New York State, the minimum wage will increase to $11.80. Please note the New York rates may also increase on December 31, 2020.

Oregon: An employee’s regular rate of pay must exceed one-and-a-half times the state minimum wage, which on July 1, 2020, will increase to $13.25 per hour (urban), $12.00 per hour (general), and $11.50 per hour (non-urban).

Washington: An employee’s regular rate of pay must exceed one-and-a-half times the state minimum wage, which on January 1, 2020, will increase to $13.50 per hour.


See Footnotes

1 Although we include examples of industry-specific minimum wage rates, this article’s primary purpose is to discuss rate changes that affect employers generally, so it may not necessarily cover all industry-specific rate changes; nor does this article discuss industry laws’ coverage requirements.

Chronologically, the increases will occur as follows: December 31, 2019: New York. January 1, 2020: Alaska, Arizona (incl. Flagstaff), Arkansas, California (incl. Belmont, Cupertino, Daly City, El Cerrito, Los Altos, Menlo Park, Mountain View, Novato, Oakland (Gen.), Palo Alto, Petaluma, Redwood City, Richmond, San Diego, San Jose, San Mateo, Santa Clara, Sonoma, South San Francisco, Sunnyvale), Colorado, Florida, Illinois, Maine (incl. Portland), Maryland, Massachusetts, Michigan, Minnesota (incl. Saint Paul ≥10,001), Missouri, Montana, New Jersey, New Mexico (incl. Albuquerque, Bernalillo County (Unincorp.), Las Cruces), Ohio, South Dakota, Vermont, Washington (incl. SeaTac, Seattle, Tacoma). March 1, 2020: Santa Fe and Santa Fe County (Unincorporated), NM July 1, 2020: Alameda, Berkeley, Emeryville, Fremont, Long Beach (Hotel), Los Angeles, Los Angeles County (Unincorp.), Malibu, Milpitas, Novato, Oakland (Hotel), Palo Alto, Pasadena, San Francisco, San Leandro, Santa Monica, and Santa Rosa, CA, D.C., Illinois (incl. Chicago & Cook County), Portland, ME, Montgomery County, MD, Minneapolis and Saint Paul, MN (101-10,000, ≤100, ≤5), Nevada, and Oregon. September 1, 2020: Connecticut.

2 This applies to any rate change that occurs other than on January 1, 2020.

3 Although Richmond, like other cities in Northern California's San Francisco Bay Area, annually adjusts its rate based on consumer price index changes, the city announced its rate would not change like other cities in the area.

4 If an employer pays at least $1.50 per hour per employee towards an employee medical benefits plan, which allows the employee to receive employer-compensated care from a licensed physician, the employer can pay employees $1.50 per hour less than the minimum wage. Richmond, CA Code § 7.108.040.

5 San Jose has a separate rate for youth training program participants, which the city sets in an approved application and remains valid for one year.

6 Although Portland, ME annually adjusts its minimum wage on July 1, when the state minimum wage equals or exceeds the local minimum wage, the applicable local rate is the state rate, which will occur on January 1, 2020. Portland, ME Code § 33.7(b)(iv).

7 In July 2019, the Michigan Supreme Court heard oral arguments concerning a request by legislators to issue an advisory opinion concerning the constitutionality of 2018 lame-duck session amendments legislators made that overhauled the minimum wage (and paid sick) law. How the court decides the case could affect the applicable minimum wage rate and related rates.

8 Although the ordinance uses “Beginning January 1, 2009, and each year therafter [sic]. . . .” the City of Santa Fe has routinely adjusted its rate on March 1. See Santa Fe, NM Code § 28-1.5(B).

9 The “Urban” rate applies to employer located within the urban growth boundary of a metropolitan service district organized under state law (i.e., Portland area). The “Nonurban” rate applies to employers located within a nonurban county. Nonurban Counties include: Baker; Coos; Crook; Curry; Douglas; Gilliam; Grant; Harney; Jefferson; Klamath; Lake; Malheur; Morrow; Sherman; Umatilla; Union; Wallowa; and Wheeler. The "General" rate applies in areas not covered by the "Urban" or "Nonurban" rates. Or. Rev. Stat. § 653.025.

10 In Seattle, "hourly minimum compensation" represents the minimum wage plus tips actually received by an employee and reported to the IRS, and money paid by the employer towards an individual employee's medical benefits plan. Employers can satisfy this obligation through wages (including applicable commissions, piece-rate, and bonuses), tips, and medical benefits.

11 The enforcement agency publicly notified stakeholders that, on January 1, 2020, the state minimum wage will exceed the local rate. Separately, it informally confirmed the adjusted local rate for 2020 would be $12.54 per hour. Currently the city is considering the fate of the local minimum wage (and paid sick provisions) in light of state law concerning these issues. For example, a September 17, 2019 memo recommends repealing the minimum wage and paid sick provisions.

12 This applies to any rate change that occurs other than on January 1, 2020.

13 In July 2019, the Michigan Supreme Court heard oral arguments concerning a request by legislators to issue an advisory opinion concerning the constitutionality of 2018 lame-duck session amendments legislators made that overhauled the minimum wage (and paid sick) law. How the court decides the case could affect the applicable minimum wage rate and related rates.

14 Although a lower minimum wage rate applies for employees of small or seasonal employers, the state labor department contends that the general minimum wage rate applies to a covered tipped employee thereof. Note, however, that the legislative history suggests the general minimum wage rate only applies to tipped employees of seasonal employers. Nevertheless, for the purpose of this article, the rates above use those the state labor department contend apply. Small employers with tipped employees should consult employment counsel when determining the rate to pay tipped employees.

15 The minimum cash wage (MCW) for a tipped employee is $2.13 per hour. However, amendments to state law, effective January 1, 2020, impact employers covered by both state and local law because the state MCW will be greater than the local MCW.

16 Neither the ordinance, nor accompanying posters, state the minimum cash wage and maximum tip credit. However, currently under both state and federal law, employers must pay covered tipped employees a minimum cash wage of $2.13 per hour.

17 Amendments to state law will affect employers covered by state and local law because the state minimum cash wage will increase to $2.35 per hour on January 1, 2020.

18 This applies to any rate change that occurs other than on January 1, 2020.

19 This applies to any rate change that occurs other than on January 1, 2020.

20 This applies to any rate change that occurs other than on January 1, 2020.

21 This applies to any rate change that occurs other than on January 1, 2020.

22 Another notable FLSA change is that up to 10% of the salary amount may be satisfied via nondiscretionary bonuses, incentives and commissions that employers pay annually or more frequently. However, this article only addresses the salary or fee amount and does not address whether or how employers may use other compensation sources to satisfy exempt employee pay requirements. Employers with questions concerning this issue should consult counsel.

23 Until the FLSA rate increases in 2020, Connecticut, Iowa, and Oregon may have greater rates. Additionally, in Oregon, it is possible the amount might again exceed the FLSA rate at a later date because the standard relies on the state minimum wage, which will increase on July 1, 2020, 2021, and 2022, and, beginning July 1, 2023, and each subsequent July, will annually adjust based on consumer price index changes.

24 Employers must pay an employee on a salary or fee basis at a rate of not less than 2 times the state minimum wage for the first 40 hours of employment each week, excluding employer-furnished board or lodging.

25 An employee must earn a monthly salary equivalent to no less than 2 times the state minimum wage for fulltime employment (employment in which an employee is employed for 40 hours per week).

26 An executive or supervisor employee must earn in excess of the equivalent of the minimum wage for all hours worked in a workweek.

27 An employee’s regular compensation, when converted to an annual rate, must exceed 3,000 times the state minimum wage or the annualized FLSA rate set by the U.S. Labor Department, whichever is higher.

28 Employers must pay an executive or administrative employee a specific weekly salary, including board, lodging, or other allowances and facilities.

29 Other states that require employers to pay these employers the minimum wage, but which will not experience a minimum wage increase in 2020, include: Georgia ($5.15); New Hampshire ($7.25); North Dakota ($7.25); Rhode Island ($10.50); Utah ($7.25); and Wisconsin ($7.25). In Virginia ($7.25), although there is not a relevant exemption from the state minimum wage, the term “employee” does not include any person whose employment the FLSA covers.

30 Similar requirements exist in Indiana, Pennsylvania, North Dakota, and Wisconsin, but the minimum wage in each state is the same as the FLSA rate: $7.25 per hour.

31 The building services and hospitality industry wage orders do not incorporate, or contain, the commissioned employee exemption.

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.