Executive Summary: Although much of the public’s attention since the Presidential election has been focused on the potential changes that may take place under the Trump administration, for employers there were many other important issues on state ballots, including state minimum wage and paid sick leave laws, that could significantly impact their businesses over the coming months. Four states approved increases to their state’s current minimum wage – as a ballot box issue.
State and Local
Arizona, Colorado, Maine, and Washington approved raises to their state minimum wage, some well above the current federal minimum. In recent years even some cities and counties have enacted their own minimum wage laws. Some proposals target fast-food workers specifically, but most cover a wide range of employees. For example, earlier this year New York Governor Andrew Cuomo signed legislation that would increase the state’s minimum wage, gradually increasing the minimum wage to $15.00 per hour – beginning with New York City and expanding to other parts of the state by 2020. Therefore, employers must adjust their policies and budgets accordingly.
- Arizona: Arizona voters just approved Proposition 206, which will gradually increase the state’s minimum hourly wage from $8.05 to $12.00 by 2020: increasing it to $10.00 January 1, 2017; to $10.50 in 2018; to $11.00 in 2019; and to $12.00 in 2020. As of 2021, Arizona’s minimum wage will be determined by the increase in the cost of living. Despite these increases, some employers will still be permitted to pay employees $3.00 below the state minimum wage to those employees who receive tips and gratuities. Flagstaff residents went further, voting to increase that city’s minimum hourly wage to $2.00 more than the state minimum wage. Beginning in July 2017 Flagstaff’s minimum wage will rise from $8.05 per hour to $12.00 per hour. Proposition 206 also addressed the issue of paid sick time in Arizona. Beginning July 1, 2017, Arizona employers with 15 or more employees will be required to provide employees 40 hours of paid sick time annually. Employers with 15 or fewer employees will be required to provide 24 hours of paid sick time.
- Colorado: Voters in Colorado approved Amendment 70, raising that state’s hourly minimum wage from $8.31 to $9.30 starting January 1, 2017. After that, the state’s minimum wage will increase 90 cents per hour each year until it reaches $12.00 per hour in 2020 – adjusting annually thereafter based on cost of living increases.
- Maine: Maine voters said yes to Question 4, approving the increase of that state’s minimum wage from $7.50 to $9.00 per hour on January 1, 2017, and increasing the minimum wage by $1 each year thereafter until it reaches $12.00 per hour in 2020 – afterwards being adjusted based on cost of living. Employees who receive tips and gratuities will receive $5.00 per hour on January 1, 2017 and then annual increases of $1.00 per hour each year until their rate of pay matches the minimum wage for all employees in the state by 2024.
- Washington: Voters in Washington State voted to increase the state’s minimum hourly wage in stages to $13.50 by 2020. Beginning on January 1, 2017, Washington’s minimum wage will increase from $9.47 to $11.00, followed by increases to $11.50 in 2018, $12.00 in 2019, and $13.50 in 2020, with increases after 2020 based on the rate of inflation each year. Included with Initiative 1433, Washington voters approved a statewide requirement for employers to provide paid sick time, requiring one hour of paid sick time for every 40 hours worked beginning January 1, 2018.
In light of this recent trend, other states are likely to follow suit and begin addressing minimum wage and paid leave issues. Accordingly, employers should be prepared to adjust to changing minimum wage laws, especially employers that do business in multiple states.
If you have any questions regarding this Alert, please feel free to contact the author, LaTanyia Walker, lswalker@fordharrison.com, who is an associate in our Memphis office. You may also contact the FordHarrison attorney with whom you usually work.