You Cannot Ignore Minimum Wage Increases Even if You Pay Employees More

Minimum wage will increase in 19 states and 21 cities and counties on January 1, with many reaching $15 an hour. Twenty-one additional jurisdictions will raise pay later in the year. Obviously, an increase in the minimum wage will impact the pay for most employees paid the minimum wage. Just because a retailer pays more than minimum wage, however, does not mean it can ignore these increases.

An increase in the minimum wage may also impact the pay to commissioned salespersons and salaried employees. For example, a commissioned salesperson is exempt from minimum wage and overtime pay, only if over half of the employee's total earnings must be from commissions, and the salesperson’s total earnings from commissions and base salary adds up to an effective hourly rate that is more than one and one-half times the state minimum wage. Any increase in the minimum wage, therefore, will automatically increase the minimum total compensation required for commissioned sales.

Similarly, any increase in minimum wage may impact piecework rates. Employers often mistakenly believe minimum wages and overtime rules do not apply to employees paid piecework rates. To the contrary they do apply, and it is important to ensure all employees are paid minimum wage and overtime rates. For more information on piecework rates, see Piece-Rate Compensation: Get Ready for the Changing Rules, in WFCA’s Premier Flooring Retailer (November/December 2016) (

Finally, an increase in the minimum wage is the impact it may have on the salary test for determining whether administrative and management employees are exempt from overtime. A number of states set the salary test as a multiple of the minimum wage. For example, in California a supervisor classified as exempt must be paid a monthly salary that is no less than two times the wages paid to a full-time minimum wage employee. There may be a number of other consequences from the increases of the minimum wage, such as increasing meal and lodging credits, and piecework rates.

Listed below are the minimum wage levels for each state and localities. This list is compiled from available information with some conflicting information. In addition, there may be other localities that have raised its minimum wage that was not included in this list. Finally, some jurisdictions base their minimum wage increase on a year-end consumer price index. Any rate increases, therefore, have not yet determined. It is therefore key that you check with your state Department of Labor for rates and wages specific to your location.

Minimum wage increases effective January 1, 2019 (December 31, 2018, for New York):

State/Locale New Rate Amount of Increase
Alaska $9.89 $0.05
Arizona $11.00 $0.50
Flagstaff $12.00 $1.00
Arkansas $9.25 $0.75
California $12.00 (more that 25 employees) $1.00
  $11.00 (25 or less employees) $0.50
Delaware $8.75 $0.50
Florida $8.46 $0.21
Maine $11.00 $1.00
Massachusetts $12.00 $1.00
Minnesota $9.86 (More than $500K in revenue) $0.21
  $8.04 ($500K or less in revenue) $0.17
Missouri $8.60 $0.75
Montana $8.50 $0.20
New Jersey $8.85 $0.25
New Mexico    
Albuquerque $9.20 $0.25
  $8.20 (if employer pays at least $2,500 annually toward healthcare or childcare)  
Bernalillo County  $9.05  $0.20
Las Cruces $10.10 $0.65
New York State $11.10 $0.70
  $12.75 (fast food workers) $1.00
Nassau/Suffolk/Westchester Counties $12.00 $1.00
  $12.75 (fast food workers) $1.00
New York City (10 or more employees) $15.00 $2.00
  $15.00 (fast food workers) $1.25
New York City (10 or less employees) $13.50 $1.50
  $15.00 (fast food workers) $1.50
Ohio $8.55 (if gross sales $314K or more) $0.25
  $7.25 (if gross sales less than $314K)  
Rhode Island $10.50 $0.40
South Dakota $9.10 $0.25
Vermont $10.78 $0.28
Washington $12.00 $0.50
Seattle (500 or more employees) $16.00 $1.00
Seattle (less than 500 employees $12.00 $0.50
SeaTac (hospitality & transportation workers) $16.09 $0.45
Tacoma $12.35 $0.35


There are also minimum wage increases effective July 1, 2019 or later:


State/Locale New Rate Amount of Increase  
Delaware (statewide) (Oct. 1) $9.25 $0.50
District of Columbia  $14.00 $0.75
Illinois (Chicago) $13.00 $1.00
Maryland (Montgomery County) $13.00 (more than 50 employees) $0.75
  $12.50 (11to 50 employees) $0.50
  $12.50 less than 10 employees) $0.50
Minnesota (Minneapolis) $12.25 (more than 100 employees) $1.00
  $11.00 (100 or less employees) $0.75
“Non-Urban” Counties $11.00 $0.50
Portland Metro  $12.50  $0.50
All Other Counties $11.25 $0.50

It is important for flooring dealers to be vigilant in determining whether their state or local governments have increased the minimum wage and whether that increase impacts other salary requirements. Given the impact of violating these requirements, it is recommended that competent legal or accounting counsel be consulted.

Notice:  The purpose of this blog is to review the latest developments that are of interest to clients of Mr. King. The information contained is abridged from legislation, court decisions, and administrative rulings. The information provided should not be construed as legal advice or opinion, and is not a substitute for the advice of counsel.


Thursday, January 3, 2019