Changes to the Minimum Wage Rate for 2017

The arrival of the new year signifies more than New Year’s resolutions. Those who work low-wage jobs have much reason to celebrate in 2017. Many states are boosting their minimum wage to compensate hard-working Americans. In total, 29 states plus the District of Columbia are hiking their minimum wage rates beyond the $7.25 required by the federal government.

Changes to the Minimum Wage

Changes to state minimum wage laws in 2017 will lift many hard-working Americans out of poverty. In fact, 22 of the 45 states with minimum wage laws on the books will hike their minimum wage in the new year. The overarching trend is toward increased compensation for workers who have been struggling to make ends meet. All-in-all, slightly less than 50 percent of states with minimum wage laws on the books will increase their minimum wage in 2017. This represents a considerable leap from the 33 percent of such states that hiked minimum wage pay rates last year.

A Look at Some Specific Changes

Florida’s minimum wage workers earned $8.05 per hour in 2016. This pay rate will climb just a bit in 2017 to $8.10 per hour. Employees who are eligible for tips will now receive a mandatory minimum wage of $5.08. Those who work low-wage jobs in California will enjoy a minimum wage hike to $10.50 per hour as long as they labor for an employer with at least 26 employees. Minimum-wage workers in the District of Columbia will be compensated with a minimum of $11.50 per hour until July 1, when compensation climbs to $12.50. Workers in Massachusetts and Washington will receive a minimum of $11 per hour beginning January 1.

FLSA, the Minimum Wage and Tip Credits

Organizations subjected to the Fair Labor Standards Act (FLSA) are required to compensate employees with at least $7.25 per hour. This level of compensation is mandatory regardless of whether the state’s laws permit a lower pay rate. Several states are altering the maximum tip credits an organization can count toward employee hourly compensation. If the rules of the FLSA apply to an organization, it can apply a maximum tip credit of $5.12 per hour. Those doing business in states with tip credit maximums that exceed the federal tip credit’s maximum can apply a higher tip credit as long as the difference between the state credit and tip credit is at least $2.13.

For more information about complete payroll, human resources and benefits administration, call the professionals at Lewis and Palmer Benefits. We have Professional resources that can help you manage your employees and business.