Like the minimum wage, the salary levels … The new minimum salary is now $684 per week, or $35,568 annually. In both jurisdictions, employers may pay employees $1 per hour less than the general minimum wage if they provide a certain level of health and/or childcare benefits. 41 Employers must pay an executive or administrative employee a specific weekly salary, including board, lodging, or other allowances and facilities. The new state minimum wage will be $13.69 an hour, and will take effect Jan. 1, 2021. Accordingly, for the time being, unless the Department revises its mandatory poster to state otherwise, it appears the pre-ballot measure increase will be in effect from January 1 through September 29, 2021, followed by ballot measure amendments on September 30, 2021. Employers may translate the $684 a week amount into equivalent amounts for periods longer than one week: $1,368 (Bi-weekly); $1,482 (Semi-monthly); $2,964 (Monthly); $35,568 (Annual). That amount will increase in 2021. White Collar Employees Covered by Minimum Wage. In 2021, this would be $958.30 a week and $49,831.60 a year. However, employers subject to the lower $13.00 per hour minimum wage can claim the full local credit without violating state law. If you have salaried workers, you may be impacted by the change, which raised the overtime salary threshold to $684 a week, or $35,568 per year.. Here’s an in-depth look at the new overtime rule for 2020, and a few steps on how to adapt. New Mexico, New Year, New Issues: State Rate Exceeds Various Local Rates in 2021. Among other things, COMPS Order #36 expands the industries covered by the order as well as increases the minimum salary required to be considered exempt under state law. Under some state laws, these employees are exempt only from overtime requirements, meaning employers must pay them at least the state minimum wage for all hours worked, and many of these state minimum wage rates will increase in 2021. Minnesota: An employee’s regular rate of pay must exceed one-and-a-half times the state minimum wage, which on January 1, 2021, will increase to $10.08 per hour for employers with $500,000 in annual gross sales, and to $8.21 per hour for employers with less than $500,000 in annual gross sales, and certain hotels. The federal Fair Labor Standards Act (FLSA) requires employers to pay most employees at least the federal minimum wage for each hour worked as well as overtime pay for all hours worked in excess of 40 in a workweek. Seyfarth Synopsis: On January 1, 2021, Washington's minimum wage will increase and will trigger the first in a series of increased salary thresholds for exempt employees, which will continue through 2028. In 2021, those thresholds are: For small businesses with 1-50 employees, an exempt employee must earn a salary of at least 1.5 times the minimum wage, or $821.40 a week ($42,712.80/year). An employer may reduce the regular workweek of an exempt employee, for example, from 40 hours to 32 hours, with a commensurate reduction in pay, provided the … On January 1, 2021, the minimum salary required to qualify for the executive/supervisor, administrative, and professional exemptions under state law increases to $778.85 per week. 3 This includes any rate that would be in effect before the scheduled increase in 2021. But, neither city’s minimum wage, when adjusted according to the formula the ordinances establish, produces a $10.50 per hour outcome. Nevada: An employee’s regular rate must exceed one-and-a-half times the state minimum wage, which on July 1, 2021, will increase to $9.75 per hour if an employer does not offer health benefits or $8.75 per hour if an employer offers health benefits. Various states' minimum salary or fee amounts exceed the federal rate, and in 2021, these pay requirements will change. 31 This includes any rate that would be in effect before the scheduled increase in 2021. For employers with 25 or fewer employees, the minimum annual salary would be … Employers cannot claim a tip credit for fast food employees. As the state minimum wage for employers with 26 or more employees will be $14.00 per hour, such employers will be unable to claim the full local credit without violating state law. In certain places, employers may be able to count tips an employee receives toward the minimum wage. 18 Employers subject to the state minimum wage that applies in New York City – generally or for fast food worker rate – will not see an increase in 2021, as both rates will remain $15.00 per hour. In many cases, the state criteria are harder to meet than the federal criteria. Employers can satisfy this obligation through wages (including applicable commissions, piece-rate, and bonuses), tips, and medical benefits. 13 Although, beginning in 2021, the ordinance allows an employer to pay employees $1.50 per hour less than the applicable local minimum wage if they pay at least $1.50 per hour per employee towards an employee medical benefits plan, employers must also comply with state law, so the credit cannot cause an employee's wage to drop below the state minimum wage. In California, exempt employees must meet certain salary and duties tests and must be paid at least twice the state minimum hourly wage based on a 40-hour week. Employers seeking to classify employees as exempt from overtime should ensure employees meet both federal and state exemption criteria. 7 At the time of publication, Oakland had not announced its adjusted 2021 hotel-worker-specific minimum wage rates. If the state minimum wage, the wage rate will increase on December 31, 2020. Portland, Maine voters approved Question A, which increases the citywide minimum wage in future years, on January 1, to $13.00 (2022), $14.00 (2023), and $15.00 per hour (2024). Additionally, information concerning Albuquerque, Bernalillo County, and Las Cruces, New Mexico is not included in the below chart. Employers with questions concerning this issue should consult counsel. Montgomery County, MD (11-50 or ≥11 & Tax-Exempt,  Home Health, or Community-Based Service Provider). 23 The rules only discuss the July 1, 2020 minimum cash wage; here we apply the math for the July 1, 2020 rate to future rates. Among other things, the rule increases the minimum salary requirement incrementally until it reaches 2.5 times the state minimum wage in 2028. Please note that some – but not all – New York rates may also increase on December 31, 2021, but for this article we focus on the New York rates that will apply every day in 2021 except December 31, 2021. Effective January 1, 2021, for licensed physicians and surgeons, the minimum hourly rate of pay will increase from $84.79 to $86.49. 17 Although the ordinance uses “Beginning January 1, 2009, and each year therafter [sic]. Please note the some New York rates may also increase on December 31, 2021. As a result, the state rate could exceed the local rate. Note: In Colorado, exempt employees' salary generally must also be sufficient to satisfy the minimum wage for all hours in a … Salary Threshold for Exempt Employees (2021) Finally, the tiered salary thresholds required for exempt status are also rising effective December 31, 2020. However, this article only addresses the salary or fee amount and does not address whether or how employers may use other compensation sources to satisfy exempt employee pay requirements. 44 Similar requirements exist in Indiana, North Dakota, Pennsylvania, and Wisconsin, but the minimum wage in each state is the same as the FLSA rate: $7.25 per hour. The state's minimum wage is scheduled to increase on January 1, 2021 and varies based on size of the employer. Flagstaff), Arkansas, California (incl. … 36 An employee must earn a monthly salary equivalent to no less than 2 times the state minimum wage for full-time employment (employment in which an employee is employed for 40 hours per week). Note that some – but not all – New York rates will also increase on December 31, 2021. Effective January 1, 2021, the rule increases the minimum salary required for the executive, administrative, and professional exemptions under state law as follows: Earlier this year, Pennsylvania adopted a new rule that increases the minimum salary required for the states' executive, administrative, and professional exemptions to $780 per week, effective October 3, 2021. Oregon: An employee’s regular rate of pay must exceed one-and-a-half times the state minimum wage, which on July 1, 2021, will increase to $14.00 per hour (urban), $12.75 per hour (general), and $12.00 per hour (non-urban). As per the Wage Order, the minimum salary level for the executive exemption and the administrative exemption governing employers in New York State, but outside of New York City and outside of Nassau, Suffolk and Westchester Counties, will rise to: Additionally, in a handful of states, outside sales employees are not exempt from state minimum wage requirements. In New York City, the minimum wage will remain $15.00, whereas the minimum wage in Nassau, Suffolk, and Westchester Counties will increase to $14.00, and, in the remainder of New York State, the minimum wage will increase to $12.50. On the Sonoma City Council November 16, 2020 agenda was “Discussion, Consideration and Possible Action on Provisions of the City’s Minimum Wage Ordinance Regarding the Health Benefits Credit.”. For large businesses (51 or more employees), an exempt employee must earn a salary of at least 1.75 times the minimum wage, or $49,831.60/year. Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney. The salary thresholds are now based on a multiplier of the minimum wage. California requires the minimum salary for exempt employees to be twice the state hourly minimum wage level. Please note that in the following states with 2021 rate increases, tip credits are prohibited (so they are not included below): Alaska; California; Minnesota; Montana; Nevada; New York (Employees outside the hospitality wage order only);Oregon; and Washington State. 9 If an employer pays at least $1.50 per hour per employee towards an employee medical benefits plan, which allows the employee to receive employer-compensated care from a licensed physician, the employer can pay employees $1.50 per hour less than the minimum wage. Minimum wage laws can affect businesses of all sizes, whether operating nationwide, in multiple jurisdictions, or only in one state, county, or city. ©2020 ADP, Inc. All Rights Reserved. . On January 1, 2022, the minimum … However, in their CPI-adjustment announcements, Albuquerque and Las Cruces say the local minimum wage will increase to $10.50 per hour, i.e., the state minimum wage. 29 This includes any rate that would be in effect before the scheduled increase in 2021. Note that pending or future legislation might change minimum wage rates that will apply in 2021, so we recommend employers monitor legislative developments and consult with counsel to confirm rates did not change since publication. 24 Although a lower minimum wage rate applies for employees of small or seasonal employers, the state labor department contends that the general minimum wage rate applies to a covered tipped employee thereof. 11 San Jose has a separate rate for youth training program participants, which the city sets in an approved application and remains valid for one year. A city or county enacts a law to set a minimum wage rate that exceeds that set by federal and state law. That translates to thousands of extra payroll dollars ($11,908 annually) for companies like retail, dry cleaners, restaurants, cleaning companies and lots of other businesses with … On January 22, 2020, the Colorado Department of Labor adopted the final Colorado Overtime and Minimum Pay Standards Order #36 (“COMPS Order”), which makes significant changes for both exempt and non-exempt employees. 26 Previous amendments to state law will affect employers covered by state and local law because the state minimum cash wage will increase to $2.55 per hour on January 1, 2021. For the administrative, professional, and executive exemptions under state law, employers with 26 or more employees must pay a salary of at least $1,120 per week beginning January 1, 2021. The content on this blog is "as is" and carries no warranties. If the rate will not change, we do not include that information. 19 The “Urban” rate applies to employer located within the urban growth boundary of a metropolitan service district organized under state law (i.e., Portland area). $1,125 per week ($58,500 per year) on and after December 31, 2021. Or. When making their annual adjustment announcements, the cities based their MCW on the state minimum wage, rather than what the adjusted local minimum wage would be. Note, however, even using the lower statutory CPI-adjustment MCW, both would exceed the state’s 2021 MCW of $2.55 per hour. All other marks are the property of their respective owners. The “Nonurban” rate applies to employers located within a nonurban county. Again, please note that: 1) if the rate(s) will not change, we do not include that information; 2) for this article we focus on the New York rates that will apply every day in 2021 except December 31, 2021; and 3) information concerning Albuquerque, Bernalillo County, and Las Cruces, New Mexico is not included in the below chart. Connecticut: An employee's regular rate of pay must exceed two times the state minimum wage, which on August 1, 2021, will increase to $13.00 per hour. Belmont, Burlingame, Cupertino, Daly City, El Cerrito, Half Moon Bay, Hayward, Los Altos, Menlo Park, Mountain View, Novato, Oakland (Gen.), Palo Alto, Petaluma, Redwood City, Richmond, San Carlos, San Diego, San Jose, San Mateo, Santa Clara, Santa Rosa, Sonoma, South San Francisco, Sunnyvale), Colorado (incl. Exempt Employees. 39 In the COMPS Order, the weekly and annual salary amounts may not perfectly align, so the "math" (M) rate (multiplying weekly by 52 and making further division) and "rule" (R) rate (dividing rule's annual rate) alternate being the highest possible rate. Using the 2021 minimum wage, L&I has calculated the salary thresholds taking effect Jan. 1, 2021: Small businesses (1-50 employees): An exempt employee must earn a salary of at least 1.5 times the minimum wage, or $821.40 a week ($42,712.80/year). January 1, 2024: $55,000 per year ($1,057.69 per week) 6. To qualify under the FLSA’s 7(i) overtime exception, the regular rate of pay for an employee of a retail or service establishment must exceed one-and-a-half times the federal minimum wage, and more than half the employee’s compensation for a representative period (not less than one month) must represent commissions on goods or services. These include: Earlier this year, the state adopted the Colorado Overtime and Minimum Pay Standards Order ("COMPS Order") #36. In various states, executive, administrative, or professional employees are exempt from state overtime requirements, but not exempt from state minimum wage requirements. Each January 1 afterwards, the city will annually adjust the minimum wage based on changes to the CPI. Workers ages 14-15 may be compensated at 85 percent of the minimum wage ($11.64 per hour in 2021). On the Sonoma City Council November 16, 2020 agenda was “Discussion, Consideration and Possible Action on Provisions of the City’s Minimum Wage Ordinance Regarding the Health Benefits Credit.”, 14 Although, beginning in 2021, the ordinance allows an employer to pay employees $1.50 per hour less than the applicable local minimum wage if they pay at least $1.50 per hour per employee towards an employee medical benefits plan, employers must also comply with state law, so the credit cannot cause an employee's wage to drop below the state minimum wage. In Rockland, Maine, voters approved a new minimum wage ordinance that will become operative on January 1, 2022, at which time covered employees must receive a $13.00 citywide minimum wage. However, it is unclear whether employers must base payment on the federal or state minimum wage. This rule took effect on … Note, however, that the legislative history suggests the general minimum wage rate only applies to tipped employees of seasonal employers. Before classifying and treating any employee as exempt from overtime, employers should confirm that the employee satisfies all applicable tests for overtime exemption under federal and state laws. Note that the some – but not all34 – New York rates will also increase on December 31, 2021, but for this article we focus on the New York rates that will apply every day in 2021 except December 31, 2021. For 2021, this means exempt employees must receive a minimum annual salary of $58,240 for employers with more than 26 employees, and $54,080 for employers with 25 employees or less. In some states, the minimum salary requirement for overtime exemption increases automatically whenever the minimum wage increases. Currently, these three jurisdictions’ ordinances require an annual adjustment to their local minimum wage based on CPI changes. In various states, the pay rates for exempt computer employees will continue to, or for the first time exceed, the rate the federal FLSA requires: California law also provides that licensed physicians and surgeons are exempt from state overtime requirements if they receive a minimum hourly rate, which is determined annually based on cost-of-living changes. The FLSA rate increased in 2020 or `` nonurban '' rates, 2020 the! Various local rates in 2021 on January 1, 2021 July 1 but not all – York! Employee standards can be more complicated in New York, so we give the Empire its. 25 neither the ordinance contains notice requirements concerning the tip credit, and service... Recently adopted regulations that increase the minimum wage goes up statewide, does! 1 afterwards, the state rate exceeds the ( M ) rate exceeds the ( R rate. 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Or $ 35,568 annually is below applicable minimum wage, the minimum amount exempt...