2015 has come and gone, and while Congress failed to pass any legislation this year regarding the federal minimum wage, 14 states and the District of Columbia have minimum wage increases that went into effect on January 1, 2016 (due to scheduled minimum increases or annual minimum wage calculations). Employers, especially those with multistate operations, should review the minimum wage of the state(s) in which they operate and make preparations for the changes.
Breakdown of Minimum Wage Increases
There are currently 13 states that adjust their minimum wage annually based on the rate of inflation: Alaska, Arizona, Colorado, Florida, Missouri, Montana, Nevada, New Jersey, Ohio, Oregon, South Dakota, Vermont, and Washington. As there was no inflation in most of these states in 2015, only two, Alaska and Colorado, have minimum wage increases in 2016. Alaska’s increase was actually a scheduled increase, as the annual adjustment does not begin until after this year.
Unlike the other states where the annually adjusted minimum wage goes into effect on January 1st of each year, Nevada’s annually adjusted minimum wage goes into effect on July 1st of each year. As a result, Nevada does not notify employers of any adjustment until April 1st of each year.
The minimum wage increases in the remaining jurisdictions were the result of legislation passed in either 2015 or previous legislative sessions. These jurisdictions include: Arkansas, California, Connecticut, Delaware, the District of Columbia, Hawaii, Maryland, Massachusetts, Michigan, Minnesota, Nebraska, New York, Rhode Island, and West Virginia. Note that in two of these states, Maryland and Minnesota, the minimum wage increases do not take effect until the second half of the year. Additionally, several of the states have scheduled minimum wage increases in years following 2016.
The New Rates
For a summary of the minimum wage increases for 2016, click here. The summary includes states where the minimum wage is calculated annually but where there is no increase this year.
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