President Obama has called for an increase in the federal minimum wage to at least $9 an hour. The President also proposed to index the minimum wage to inflation, which means that minimum wage would increase as the cost of living increases. The Fair Minimum Wage Act of 2013 has been introduced in the U.S. Senate and House of Representatives and if it is passed, will raise the federal minimum wage from $7.25 to $10.10 per hour by 2015. In addition the index would adjust it each year to keep up with the rising cost of living. This legislation also proposes to increase the minimum wage for employees who receive tips.
While the legislation would need to be passed by both the Senate and the House to go into effect there have already been minimum wage increases in many states this year as of January 1, 2013. Connecticut and New York are two of the most recent states to have just passed minimum wage increases.
New York passed an increase in the minimum wage to $9 per hour which will go into effect over 3 years, at the end of the year there will be an $8 per hour increase, followed by an increase to $8.75 the next year, and $9 per hour the following year. The most recent state to jump on board with the increases, Connecticut aims to increase minimum wage to $9 by January 1, 2015, making it one of the highest rates in the country. The increase will begin from $8.25 to $8.70 on Jan. 1, 2014, followed by an increase on Jan. 1, 2015 to $9. While, the federal minimum wage remains at $7.25 per hour, if an employee is subject to both the state and federal minimum wage laws, the employee is entitled to the higher of the two minimum wages.
In additional state news, California has a pending bill that would also require the State to raise it’s minimum wage. California’s current minimum wage is $8 an hour, and the measure would increase it to $8.25 in 2014, $8.75 in 2015, and $9.25 in 2016. Then starting in 2017, it would be adjusted annually according to the rate of inflation.
California would be another state joining the following states in their 2013 minimum wage increases this year:
Arizona – $7.80
Colorado – $7.78
Florida – $7.79
Missouri – $7.35
Montana – $7.80
Ohio – $7.85
Oregon – $8.95
Rhode Island – $7.75
Vermont – $8.60
Washington – $9.19
It is very important for businesses to continue to update their State and Federal Labor Law Posters to reflect these ongoing changes. Because these laws can change and are expected to change at any time, the safest solution is a Worry-Free Poster Solution, which will continue to give you coverage and e-updates throughout the year.