Hi everybody, the minimum wage just went up! Yeah, yeah, I get it…old news…you all already know about minimum wage increase. Well, I realize that it’s been discussed ad nauseum, but just in case there are a handful of people out there who forgot to make the requisite changes with their payroll, here’s a quick reminder that the minimum wage has gone up (and will continue to rise) according to the following schedule:
- January 1, 2015 – $7.75
- January 1, 2016 – $8.50
- January 1, 2017 – $9.25
- January 1, 2018 – $10.10
In addition to the higher minimum wage, there are a couple other things you should know. First, the tip credit also increased to $0.50 an hour on January 1, 2015 and will tick up to $0.75 an hour on January 1, 2016, provided that the employee earns at least $7.00 above the minimum wage in tipped income and wages. What does this mean? Basically, in 2015, employees must make at least 7.50 an hour in tips to qualify for the $0.50 tip credit, which means that employers just lost the $0.25 tip credit they used to have for employees who earn less than $7.50 an hour in tips. In other words, for employees in low tipped categories who might make just $5-6 an hour in tips, there is no longer a tip credit.
Second, in July 2014, the state DLIR issued a new Wage and Hour that discussed the new minimum wage amounts. You can get a copy of the new poster here: July 2014 Wage and Hour Poster.
You can also view the state’s tip credit and minimum wage guide here: Minimum Wage and Tip Credits.