As we head into the new year, we would like to take a moment to remind you that there are many state minimum hourly wage changes for 2018. In most of these states, the new minimum wage rates applied as of January 1, 2018. If you are a multi-state employer with operations outside of Massachusetts, it is important to know that many states provide annual increases to the State Minimum Wage based on the U.S. Consumer Price Index and inflation.
HR Knowledge will send further e-Alerts should additional states announce new rates for 2018.
Current Federal Minimum Wage Rate
Under the Fair Labor Standards Act (FLSA), the current federal minimum wage is $7.25 per hour. However, because the FLSA does not supersede any state or local laws that are more favorable to employees, if a state has a minimum wage that is higher than the federal minimum, employers subject to the state minimum wage law are obligated to pay the higher rate to employees working in that state. The minimum wage rate for federal contractors will increase to $10.35 (up from $10.20).
Minimum Wage Increased by State
As of January 1, 2018, new minimum wage rates will be in effect in the following states:
- Alaska: $9.84 (up from $9.80);
- Colorado: $10.20 (up from $9.30);
- Florida: $8.25 (up from $8.10);
- Hawaii: $10.10 (up from $9.25);
- Maine: $10.00 (up from $9.00);
- Michigan: $9.25 (up from $8.90);
- Minnesota: $9.65 (up from $9.50)
- Montana: $8.30 (up from $8.15);
- New Jersey: $8.60 (up from $8.44);
- Ohio: $8.30 (up from $8.15);
- Rhode Island: $10.10 (up from $9.60)
- Vermont: $10.50 (up from $10.00);
- Washington: $11.50 (up from $11.00);
Other Minimum Wage Changes:
- California: California minimum wage updated to $10.50 per hour for employers with 25 or less employees and $11.00 per hour for employers with 26 or more employees, effective 1/1/2018.
- New York: New York's minimum wage increases on 12/31/17 to $10.40 (up from $9.70)
Effective later in 2018:
- Maryland: $10.10 effective July 1, 2018
Key Next Steps
- If HR Knowledge processes your payroll please contact your Client Account Manager to inform them of any employees' hourly rates that need to be changed to meet the new minimum wage requirements.
- If you process your own payroll, please note that when you submit these payrolls, you must make any necessary changes to the employees' rates by entering the new rate in the Pay Rate field found on the Payroll Info page under the Employees tab.