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.
If you procrastinated on finding a costume for the office Halloween party, never fear—just put "hipster" or "zombie" before any person, profession, or thing, and you're set. After indulging in too much sugar and embarrassing group photos, relax and unwind with our always cool and very much alive update on minimum wage, tip, and overtime developments.
DOL Previews its Costume (Regulatory Agenda Update): The U.S. Department of Labor released its fall regulatory agenda, in which it discussed proposed rulemaking activities the Wage & Hour Division plans to undertake concerning joint employment, white collar salary requirements, calculating the regular rate for overtime purposes, and tips.1
Washington State Costume Contest (Public Comments on Proposals): Washington State’s Department of Labor & Industries (LNI) is soliciting feedback on a draft administrative policy aimed at helping employers determine whether an employee is based in Washington and protected by the Minimum Wage Act. Comments must be submitted by November 9, 2018. The public comment deadline was October 26, 2018 concerning LNI’s “pre-draft” of proposed revisions to rules concerning the executive, administrative, and professional exemptions.
Bite-Sized or King-Sized Treats for Employees in 2019 (Annual Rate Announcements): Annual adjustment season was in full swing in October, with numerous cities, counties, and states announcing their 2019 rates.
- Alaska: On January 1, 2019, the state minimum wage will increase from $9.84 to $9.89 per hour. For tipped employees, Alaska prohibits tip credits. The increase also impacts the minimum salary or fee amount exempt executive, administrative, and/or professional employees must be paid, i.e., not less than twice the state minimum wage for the first 40 hours of employment each week, excluding employer-furnished board or lodging. So, e.g., the minimum weekly salary amount will increase from $787.20 to $791.20.
- California: State 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, 2019, the computer software employee minimum hourly rate will increase from $43.58 to $45.41 per hour, the minimum monthly salary amount will increase from $7,565.85 to $7,883.62, and the minimum annual salary amount will increase from $90,790.07 to $94,603.25. For licensed physicians and surgeons, the minimum hourly rate of pay will increase from $79.39 to $82.72.
- Florida: The state minimum wage will increase from $8.25 to $8.46 per hour on January 1, 2019. For tipped employees, the maximum tip credit will remain $3.02 per hour, while the minimum cash wage will increase from $5.23 to $5.44 per hour.
- Mountain View, California: The minimum wage will increase from $15.00 to $15.65 per hour on January 1, 2019.
- Sunnyvale, California: On October 29, it was announced that the minimum wage will increase from $15.00 to $15.65 per hour on January 1, 2019. The next day, October 30, the City Council voted to amend its ordinance to cap the amount of annual adjustments at five percent. Because 65 cents is less than five percent, the amendments will not impact the 2019 adjustment.
- Albuquerque, New Mexico: On January 1, 2019, the minimum wage will increase from $7.95 to $8.20 per hour for employees whose employers provide a certain amount of healthcare and/or childcare benefits, and from $8.95 to $9.20 per hour for employees not provided qualifying benefits. For tipped employees, the minimum cash wage will increase from $5.35 to $5.50 per hour, meaning the maximum tip credit will increase from $2.60 to $2.70 for employees with benefits, and from $3.60 to $3.70 per hour for those without benefits.
- Bernalillo County, New Mexico (Unincorporated): The minimum wage for employees whose employers provide a certain amount of healthcare and/or childcare benefits will increase from $7.85 to $8.05 per hour, on January 1, 2019, whereas the rate for employees not provided qualifying benefits will increase from $8.85 to $9.05 per hour. For tipped employees, the minimum cash wage will remain $2.13 per hour, while the maximum tip credit will increase from $5.72 to $5.92 per hour for employees provided benefits, and from $6.72 to $9.92 per hour for those who are not.
- SeaTac, Washington: The minimum wage applicable to certain employers and employees in the hospitality and transportation industries will, on January 1, 2019, increase from $15.64 to $16.09 per hour. In Washington State, tip credits are prohibited.
- Seattle, Washington: On January 1, 2019, the minimum wage for employers with more than 500 workers worldwide will increase from $15.45 to $16.00 per hour, and these employers can no longer pay a slightly lower rate if they pay toward an employee’s medical benefits plan. For employers with 500 or fewer employees, the minimum wage will increase from $11.50 to $12.00 per hour, and the hourly minimum compensation will increase from to $14.00 to $15.00 per hour; such employers can make up the $3.00 difference between the minimum wage and hourly minimum compensation by contributing at least $3.00 per hour toward an employee’s medical benefits and/or reported tips.
- Tacoma, Washington: The citywide minimum wage will increase from $12.00 to $12.35 per hour.
Next month, we will publish an article discussing all 2019 minimum wage, tip, and overtime-exemption-related rate changes.
D.C. Council TPs Voters’ Houses: The Council of the District of Columbia passed Bill 22-913, the “Tipped Wage Workers Fairness Amendment Act of 2018,” which in part repeals Initiative 77, a June 2018 voter-approved measure eliminating the tip credit. The mayor signed the bill, which must also undergo a 30-day review by the U.S. Congress. The Act also includes workplace training, posting, reporting, and recordkeeping requirements, but many amendments will not take effect until their fiscal impact is included in approved D.C. budget and financial plan. Reports are circulating that Initiative 77 proponents will gather signatures so that a voter referendum could be held on the Council’s action, which, if successful, would undo the Council’s undoing of Initiative 77.
Bobbing for Ballot Measures: Next month, voters will decide various minimum-wage-related measures. In Flagstaff, Arizona, Proposition 418 would reduce the citywide minimum wage (approved by voters) until January 1, 2021, after which time the rate will be 50 cents above the state minimum wage. Arkansas Issue 5 proposes increasing the state minimum wage from $8.50 per hour to $9.25 (2019), $10.00 (2020), and $11.00 (2021). Oakland, California’s Measure Z would, among other things, establish a minimum wage in the hotel industry. In Missouri, Proposition B seeks to increase the $7.85 per hour state minimum wage to $8.60 (2019), $9.45 (2020), $10.30 (2021), $11.15 (2022), and $12.00 (2023).
Bay Area Corn Maze (of Laws): It was a busy month in Northern California’s San Francisco Bay Area. The Alameda City Council adopted a citywide minimum wage, which, effective July 1, 2019, will be $13.50 per hour, increasing to $15.00 per hour on July 1, 2020, with annual adjustments based on cost-of-living increases beginning July 1, 2022. On October 1, the Berkeley minimum wage rate generally increased from $13.75 to $15.00 per hour, and increased from $12.00 to $13.25 for employer youth works and job training participants. In Daly City, the City Council received a staff recommendation to hold a public hearing concerning a proposed citywide minimum wage ordinance on November 26. The Fremont City Council held a listening session about whether to adopt a citywide minimum wage ordinance.
Sugar Crash (Other Developments): New Jersey A4687 seeks to increase the state minimum wage. The minimum wage would continue to be annually adjusted, but the bill sets rate rules that would supersede certain cost-of-living increases, e.g., it would set a $10.10 per hour minimum wage on January 1, 2019, and from 2020-2023 would increase the rate annually by $1.25 per hour or $1.00 per hour plus a cost-of-living increase, whichever is greater. New Jersey’s governor released a press release supporting efforts to eventually increase the state minimum wage to $15.00 per hour and to increase the amount tipped employees must be paid, stating he “look[ed] forward to working with [legislators] to pass an increase in the minimum wage by the end of this year.”
Pennsylvania HB 2693 was introduced, which proposes various amendments to the Minimum Wage Act. Although it seems the bill’s intent is to increase the statewide minimum wage – which is currently $7.25 per hour – to $12.00 per hour beginning in 2024, as written the rate would only apply to covered tipped employees. It also proposes scheduled rate increases in 2025, 2026, and 2027, and annual adjustments beginning in 2028. The bill proposes allowing municipalities to enact laws requiring a higher local minimum wage rate. Pennsylvania HB 861, which seeks to preempt local laws, was considered by the House Labor & Industry Committee. Currently, there is not a generally-applicable local minimum wage ordinance in the state.
In Montgomery County, Maryland, the County Council considered Bill 34-18, which would lower the number of employees an employer must employ to be covered under the law from two or more to one person in the county. The Saint Paul, Minnesota City Council voted favorably on amendments to decrease the amount of scheduled annual increases in a proposed citywide minimum wage ordinance. The minimum wage would eventually reach $15.00 per hour, but slower than initially proposed. A third reading is scheduled to occur on November 7.
We will continue to monitor and report on minimum wage and overtime developments as they occur.
1 To learn more, see James Paretti, Jr., Michael Lotito, Tammy McCutchen, and Tessa Gelbman, Joint Employment, Wage and Hour Changes are on the Regulatory Horizon, Littler ASAP (Oct. 17, 2018).