The Raise the Wage Act of 2017, introduced recently in the Senate and House, proposes an increase to the federal minimum wage from $7.25 an hour to $9.25 an hour, and then to $15 an hour by 2024. In addition, the legislation wants to gradually phase out subminimum wages for tipped workers, young workers, and workers with disabilities. This proposal comes on the heels of the Fight for $15 movement that has been lobbied for by workers in industries like tourism and hospitality.
While the likelihood that this Act will succeed is very slim due to lack of bipartisan support, states and cities have looked at making their own changes.
Nineteen states began the new year with higher minimum wages. Seven states (Alaska, Florida, Missouri, Montana, New Jersey, Ohio, and South Dakota) automatically increased their rates based on the cost of living; five states (Arizona, Arkansas, Colorado, Maine, and Washington) increased their rates through ballot initiatives previously approved by voters; and seven states (California, Connecticut, Hawaii, Massachusetts, Michigan, New York, and Vermont) did so as a result of legislation passed in prior sessions. Washington, D.C., Maryland, and Oregon are scheduled to raise their respective minimum wages on July 1, 2017, due to previously enacted legislation.
Here in the Midwest, the minimum wage for Wisconsin has remained the same as the federal minimum wage ($7.25 per hour); however, there has been recent activity in Minnesota, Iowa, and Illinois.
As of August 1, 2016, Minnesota’s minimum wage rate increases accordingly: (1) large employers must pay at least $9.50 an hour (annual gross volume of sales made or business done of $500,000 or more); (2) small employers must pay at least $7.75 an hour (annual gross volume of sales made or business done of less than $500,000); (3) the training wage rate is $7.75 an hour (90-day training rate paid to employees who are younger than 20 years of age); and (4) the youth wage rate is $7.75 an hour (may be paid to employees younger than 18 years of age).
The next state minimum wage updates will begin January 1, 2018, when it will be adjusted annually for inflation.
In the past several years, a few counties in Iowa, including Lee, Johnson, Linn, Polk, and Wapello, approved and began to implement minimum wage increases in installments, however in March of this year, Iowa Governor Branstad signed a law prohibiting counties and cities within the state from setting their own minimum wage that exceeds or conflicts with laws enacted by the state or federal government (commonly known as "preemption measures").
Therefore, ordinances in Lee, Johnson, Linn, Polk, and Wapello counties that had been approved for a higher minimum wage will now be rolled back to the current state minimum wage of $7.25 per hour. If employers have already increased employee wages in response to their respective minimum wage ordinances, this new bill does not require them to reduce the wages back to $7.25.
On May 31, the Illinois Legislature finalized legislation said to be the first $15 an hour minimum wage bill passed by state lawmakers.
The bill would raise the minimum wage, under a phased-in schedule, for employees at least 18 years of age to $15 an hour in 2022. The bill is headed to the governor’s desk and reports indicate he will likely veto the bill.
On July 1, 2017, Chicago’s minimum wage will increase to $11 per hour ($5.95 for tipped employees and will increase according to the CPI). Subsequent increases to $12 will occur in 2018 and up to $13 in 2019. Employers that maintain a business facility within the City of Chicago and/or are required to obtain a business license to operate in the City are subject to the minimum wage ordinance. Employees who work two hours in the City within a period of two weeks qualify for the minimum wage.
Employers located in the rest of the state of Illinois, applicable to employers with four or more employees, are required to pay $8.25 per hour.
As a reminder, MRA has a partnership with GovDocs, a reputable and cost-effective provider of state and federal consolidated employment law posters, so members can receive a 10 percent discount off the regular price of employment law posters and any other products. Employers using GovDocs will receive notification whenever updates are made to compliance posters, such as minimum wage increases.
Source: Ncsl.org; CCH/Wolters Kluwer, Michael Hyatt, HR Government Affairs Director, Lynell Meeth, HR Business Advisor, MRA – The Management Association