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New Minimum Wage Rates July 1: What You Need to Know

A number of state and local minimum wage rates are scheduled to increase on July 1, 2020. Below is a summary of these changes and guidelines to help you comply with your minimum wage requirements.

Note: As of June 8, 2020, a small number of jurisdictions (including Hayward, CA and San Carlos, CA) have delayed their July 1 minimum wage increase because of COVID-19, though additional jurisdictions are considering similar delays. Continue to monitor the status of minimum wage changes in your jurisdiction.

Minimum Wage Increases

Jurisdiction

Minimum Wage Rate July 1, 2020

Illinois

$10.00 per hour

Nevada

$9.00 per hour (if no health benefits are offered), $8.00 per hour (if health benefits are offered)

Oregon (see below for breakdown by region)

$11.50, $12.00, or $13.25 per hour depending on region

District of Columbia

$15.00 per hour

Chicago

$13.50 or $14.00 per hour depending on employer size

San Francisco

$16.07 per hour

Los Angeles

$14.25 or $15.00 per hour depending on employer size

Minneapolis

$11.75 or $13.25 per hour depending on employer size

Saint Paul, MN

$9.25 (see below), $10.00, $11.50, or $12.50 per hour depending on employer size

Montgomery County, MD

$13.00, $13.25, or $14.00 per hour depending on employer size

Cook County, IL

$13.00 per hour, unless the employee works in a municipality that has opted out of the requirement

Oregon:

Oregon's minimum wage differs based on where the employer is located:

  • Non-urban Counties: Employers in Baker, Coos, Crook, Curry, Douglas, Gilliam, Grant, Harney, Jefferson, Klamath, Lake, Malheur, Morrow, Sherman, Umatilla, Union, Wallowa, and Wheeler must pay non-exempt employees at least:

    $11.50 per hour beginning July 1, 2020.
  • General: Employers that aren't located in one of the non-urban counties above and aren't located within the metropolitan Portland urban growth boundary (see below) must pay non-exempt employees at least:

    $12.00 per hour beginning July 1, 2020.
  • Portland Metro: Employers that are within the metropolitan Portland urban growth boundary must pay non-exempt employees at least:

    $13.25 per hour beginning July 1, 2020.

Saint Paul, MN:

The city's minimum wage for employers with five or fewer employees is $9.25 per hour effective July 1, 2020.  However, the state minimum wage is $10.00 per hour for employers with annual gross revenue of $500,000 or more. Therefore, employers with 5 or fewer employees but annual gross revenue of $500,000 or more must pay non-exempt employees at least $10.00 per hour.

Minimum Wage Increases: Smaller Cities

Several smaller cities are also increasing their minimum wage effective July 1, 2020. Some of these include:

Jurisdiction

Minimum Wage Rate July 1, 2020

Alameda, CA

$15.00 per hour

Berkeley, CA

$16.07 per hour

Emeryville, CA

$16.84 per hour

Fremont, CA

$13.50 or $15.00 per hour depending on employer size

Pasadena, Santa Monica, and Malibu, CA

$14.25 or $15.00 per hour depending on employer size

Milpitas, CA

$15.40 per hour

Novato, CA

$13.00, $14.00, or $15.00 per hour depending on employer size

San Leandro, CA

$15.00 per hour

Santa Rosa, CA

$14.00 or $15.00 per hour depending on employer size

Note: This is not an inclusive list. There may be additional jurisdictions that have scheduled increases for July 1. Check your local law to ensure compliance.

Other Considerations:

Tipped Employees:

In some jurisdictions, the minimum cash wage required for tipped employees also increases with the minimum wage. For example, the minimum cash wage for tipped employees in Illinois is increasing to $6 per hour on July 1, 2020. The employer then may apply up to a $4 tip credit toward meeting the state's minimum wage ($10.00 per hour). If the employee's direct cash wage and tips don't equal or exceed the minimum wage, the employer must make up the difference. Check your state and local law to determine whether the minimum cash wage is changing on July 1, 2020.

Note: Some jurisdictions, such as California, don't allow employers to apply a tip credit toward the minimum wage. In such cases, employers must pay tipped employees the full minimum in direct cash wages.

Multiple Minimum Wage Rates:

If an employee is subject to more than one minimum wage requirement (such as federal, state, and local), you should generally comply with the rate most generous to the employee. For example, if your state minimum wage is $11.00 and the local minimum wage is $12.00, you must generally pay the employee at least $12.00 per hour, since it's higher than the state and federal minimum wage rates. Additionally, if your business is located in one state, but you have employees (such as remote workers) working in another jurisdiction, the minimum wage in the location where the employee performs work generally applies.

Note: Some requirements may only apply to businesses of a certain size, or employees who perform a certain number of work hours in that jurisdiction. Check your state and local law for details.

Employees Earning More than the Minimum Wage:

When the minimum wage increases, some employers wonder if they should also provide a raise to employees already earning equal to or more than the new rate. While the employer is under no obligation to provide a raise in such cases, some employees may be expecting one. Consider the potential impact on labor costs, employee morale, internal equity (how employees are paid when compared with other employees within your company based on skills and experience), and your typical merit increase schedule.

New Posters:

Most jurisdictions require employers to post an up-to-date minimum wage notice in the workplace. State and federal posters are available for download in the State & Federal Resources section of HR411®. ADP clients with the Labor Law Poster Compliance Update Service receive updated posters automatically.

Your state or city may have additional notice requirements. For example, Chicago requires that employers include an updated minimum wage notice with each employee's first paycheck on or after the date of the increase. Check your jurisdiction's requirements to ensure compliance.

Conclusion:

Understand the minimum wage rules that apply to your employees and make any necessary changes in RUN Powered by ADP® before July 1, 2020. Additionally, post any updated minimum wage notices in each work location.

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