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. When Washington state's minimum wage increases on January 1, 2021, it will have a cascading effect. Minimum Salary for Exempt Administrative and Executive Employees. September 30, 2021: Florida. 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). What is an exempt employee? The 2021 Colorado minimum wage is $12.32/hr for standard pay, and $9.30/hr for tipped employees. 43 Other states that require employers to pay these employers the minimum wage, but which will not experience a minimum wage increase in 2021, include: Georgia ($5.15); Nebraska ($9.00); and North Dakota ($7.25). The United States Department of Labor issued a final regulation to take effect January 1, 2020, raising the minimum overtime salary threshold for exempt employees under federal law to $35,568. In keeping with the gradual increase in the State's minimum This means that employers are not required to pay these employees overtime for working more than 40 hours and they are also exempt from paying an hourly minimum wage, paid sick leave and other benefits. In these jurisdictions, if the direct wage and tips an employer pays an employee equals the minimum wage, an employer satisfies its minimum wage obligation. However, currently under state law, employers must pay covered tipped employees a … 34 The state rate that applies in New York City will remain unchanged at $58,500 (annually), $4,875 (monthly), and $1,125 (weekly). Minimum Wage Increase. That said, the regulations do not prohibit prospective changes to exempt employees’ salaries (provided they still receive the minimum required salary). If the rate will not change, we do not include that information. Salary Test for Exempt Employees . Employers can satisfy this obligation through wages (including applicable commissions, piece-rate, and bonuses), tips, and medical benefits. The new thresholds will go into effect Jan. 1, 2021. On Tuesday, the U.S. Department of Labor issued its final rule concerning overtime exemptions. are also rising effective December 31, 2020. Next, we highlight state, counties, and cities where, for tipped employees, the minimum cash wage and/or tip credit will increase in 2021. Additionally, on May 1, the Virginia minimum wage will increase to $9.50 per hour, and on July 1, the Nevada minimum wage will increase to $9.75 or $8.75 per hour, depending on whether an employer offers health 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. Salary threshold implementation schedule Salary thresholds for overtime exempt workers are a multiplier of state minimum wage for a 40-hour workweek 2021 Salary thresholds ƒSmall businesses: $821.40/week ($42,712.80/year) Effective January 1, 2021, for licensed physicians and surgeons, the minimum hourly rate of pay will increase from $84.79 to $86.49. Employers should consult these Moreover, all adjusted rates take effect on January 1. industries," and employers in the "building service 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). Maybe You Can Invest Your Retirement Plan To Save The Planet! the salary levels depend on employer size and location. 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. Thus, by October 3, 2021, any employee classified as exempt under a white-collar exemption that has a minimum salary requirement who earns less than that amount will need to receive a salary increase to at least meet this amount or be reclassified as non-exempt (and made eligible for overtime pay) going forward. 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. Minimum Wage (2021) In keeping with the gradual increase in the State’s minimum wage levels, the new tiered rates across the State, effective December 31, 2020, are listed below. Call 1-800-547-8367. Part 541. Like the minimum wage, the salary levels depend on employer size and location. $54,080 per year (or $1,040 per week) for employers of 25 or fewer employees. Each January 1 afterwards, the city will annually adjust the rate based on changes to the CPI. 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. California: An employee’s earnings must exceed one-and-a-half times the state minimum wage, which on January 1, 2021, will increase to $14.00 per hour for employers with 26 or more employees and to $13.00 per hour for employees with 25 or fewer employees. Salary Thresholds for Overtime Exempt Employees to Rise Jan. 1, 2021 Increase in state’s minimum wage rate to $13.69 an hour triggered recalculation As a result of the state’s minimum-wage rate rising to $13.69 an hour on Jan. 1, 2021, a new minimum salary threshold for overtime-exempt employees will also increase. 12 The minimum wage for employers with 26 or more employees remains $15.00 per hour. 35 Employers must pay an employee on a salary or fee basis at a rate of not less than 2 times the state minimum wage for the first 40 hours of employment each week, excluding employer-furnished board or lodging. Food Service Worker: A food service worker must receive a wage of at least the hourly Cash Wage (CW), and a tip credit cannot exceed the below-specified hourly rate provided the total of tips received plus the wages equals or exceeds the hourly total minimum wage rate (MW). 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. In 2021, more than twenty states will increase their minimum wages for workers. Effective January 1, 2021 minimum wage is increasing for both the state of California and the City of San Diego. Salary Test for Exempt Employees . ), Las Cruces), Ohio, South Dakota, Vermont, Washington (incl. The City of Denver also increased the standard minimum wage for all citywide workers in 2021 to $14.77/hr for standard pay, and $9.83 for tipped workers. 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). 28 Under the Hospitality Wage Order, the service employee rates applicable in New York City will not change on December 31, 2020. To print this article, all you need is to be registered or login on Mondaq.com. At the time of publication, though not necessarily officially certified, it appears voters approved the following three measures: In Florida, Amendment 2 establishes a $10.00 per hour minimum wage on September 30, 2021, which will increase $1.00 per hour each subsequent September 30 until the minimum wage reaches $15.00 per hour on September 30, 2026. Like the minimum wage, Additionally, information concerning Albuquerque, Bernalillo County, and Las Cruces, New Mexico is not included in the below chart. As they have each year since 2016, the minimum wage and exempt All three of the above exemptions require payment of a true salary: "Salary" is defined as agreed-upon periodic compensation, intended to cover a period of at least a week, equivalent to at least $684 per week,* that is not subject to … New York: The general wage order45 provides – in part – that employers must pay an employee for overtime at a wage rate of one-and-one-half times the employee's regular rate in the manner and methods provided in and subject to the exemptions of section 7 of the FLSA. Effective January 1, 2021, the minimum salary threshold for these exemptions is as follows: $58,240 per year (or $1,120 per week) for employers of 26 or more employees. 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. (i.e., restaurants and hotels). Salary Threshold for Exempt Employees (2021) Finally, the tiered salary thresholds required for exempt status are also rising effective December 31, 2020. The table below lists the current prevailing 2021 minimum wage rates for every state in the United States. 10 Notwithstanding the available credit (see previous footnote), employers must comply with local and state law. The subminimum 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. Chronologically, the increases will occur as follows: November 1, 2020: New Jersey (Long-Term Care Facility Direct Care Staff); December 31, 2020: New York (Nassau, Suffolk & Westchester Counties; Remainder of State; Fast Food Worker Outside New York City). New York State employers, though, must be mindful that, a 41 Employers must pay an executive or administrative employee a specific weekly salary, including board, lodging, or other allowances and facilities. allowance and claim for meal, lodging and tip credits. salary threshold will increase for New York employers effective 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. Each January 1 afterwards, the city will annually adjust the minimum wage based on changes to the CPI. Almost all Oregon employers are subject to the Fair Labor Standards Act (FLSA), and the minimum salary to qualify for exemption under that law is $684 per week or $35,568 annually (allowing up to 10% of the salary basis threshold to be met with nondiscretionary bonuses/incentives, including commissions, paid at least annually). Additionally, in Oregon, it is possible the amount might again exceed the FLSA rate at a later date because the standard relies on the state minimum wage, which will increase on July 1, 2021, and 2022, and, beginning July 1, 2023, and each subsequent July, will annually adjust based on consumer price index changes. This is what it looks like for employers: For employers in California who have 25 or less employees, the minimum wage for non-exempt employees will increase from $12/hour to $13/hour; for employers who have 26 or more employees, the minimum wage will increase from $13/hour to … Business groups and several states … The minimum salary for exempt executive and administrative employees in New York will increase as follows: Nassau, Suffolk, and Westchester counties: $1,050 per week, which equals $54,600 per year. Albuquerque, Bernalillo County (Unincorp. The Department of Labor on its website has summarized the revisions To help manage this challenge, below we provide a rates-only update that details scheduled state- and local-level wage increases throughout 2021 so employers can determine the minimum amount they must pay non-exempt, tipped, and certain exempt employees. 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. Minimum wage laws can affect businesses of all sizes, whether operating nationwide, in multiple jurisdictions, or only in one state, county, or city. Pennsylvania employees otherwise exempt under the duties test but making less than the specified minimum weekly salary must be paid overtime for all hours worked in excess of 40 in a workweek at a rate of not less than 1.5 times the employee’s regular pay rate. officials have floated the idea of postponing the effective date of these increases in light of the COVID-19 pandemic, we expect these 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.”. The "General" rate applies in areas not covered by the "Urban" or "Nonurban" rates. 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. 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. These salary requirements do not apply to outside sales employees, teachers, and employees practicing law or medicine. However, this would result in paying employees less than the state minimum wage. The new rules start with setting the salary threshold at 1.25 times the state’s hourly minimum wage. Currently, these three jurisdictions’ ordinances require an annual adjustment to their local minimum wage based on CPI changes. 38 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). 40 An employee’s regular compensation, when converted to an annual rate, must exceed 3,000 times the state minimum wage or the annualized FLSA rate set by the U.S. Labor Department, whichever is higher. The rule increases the salary threshold for employees exempt under the executive, administrative, and professional exemptions (the “white collar exemptions”) from $455 per week (or $23,660 annually) to $684 per week (or $35,568 annually). Generally (Outside Hospitality Wage Order): Beginning on December 31, 2020, employers cannot apply a tip credit, and employees must be paid the full minimum wage (see chart above). Effective January 1, 2021, the minimum monthly salary for sheepherders increases to $2,488.97 per month for employers with 26 or more employees and $2,311.24 per month for employers with 25 or fewer employees. Employers with questions concerning this issue should consult counsel. If the state minimum wage, the wage rate will increase on December 31, 2020. 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Libby Henninger and Sebastian Chilco on, Diversity & Inclusion Training and Consulting, General Data Protection Regulation (GDPR), Littler Restructuring Assessment Solution, Florida Passes Amendment 2, Gradually Increasing Florida’s Minimum Wage to $15 an Hour, https://www.oaklandca.gov/topics/measure-ff-and-measure-z, New State Employment Laws Set to Take Effect on January 1, 2021, On September 1, 2020, the minimum wage in, On November 1, a new $14.00 per hour minimum wage for long-term care facility direct care staff took effect in. Exempt employees must receive a salary of at least twice the state’s minimum wage for a 40-hour workweek. For 2020, employees must earn a minimum or $684 per week or $35,568 per year to have exempt status. CT State Statute 31-58 - exempt employees not covered by minimum wage or record keeping laws. As of January 1, 2021, the minimum annual salary to qualify for an exempt employee would be $58,240 (Double the state minimum wage $14.00/hour for employers with 26 or more employees is $28.00/hour x 40 hours/week x 52 weeks = $58,240). Albuquerque says the 2021 MCW will be $6.30 (rather than $5.70) and Las Cruces says the 2021 MCW will be $4.20 (rather than $4.18). Finally, because New York has varying standards, we include the numbers in a standalone section after the below chart. McLane Middleton, Professional Association. Specialist advice should be sought Minimum Salary Levels for Executive, Administrative and Professional Employees by State. 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 change applies to all workweeks going forward. 2021 minimum wage for each hour worked in a standalone section after the below chart general wage... 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Located within a Nonurban County Employment Program – under 18 Years Old uses “ Beginning January 1 2021... Year, New year, New York City will not change on December,! Fixed amount recurring each pay period without variance due to hours, quantity, or other and. 31-60-14, 31-60-15, and tip pooling note the some New York has varying standards, we the. ) and 2024 ( $ 42,390.40 annualized ) subject matter will not change on December,. Changes to the CPI for employers with 25 or fewer employees will remain $ 12.50 per (! 'S New exempt salary cutoff is $ 815.20 a week or $ 684 per week ) for with. 22 Subsidized Temporary Youth / Transitional Employment Program – under 18 Years Old. ” the of! Miscellaneous industries '' wage Order 14-2001 toward the minimum wage minimum salary for exempt employees 2021 by state each hour worked in a of... Sales employees are divided into two categories: exempt and non-exempt adjustments based on changes to the subject matter states... Subject to this rate should monitor the following City webpage: https:.... New state minimum wage based on changes to the lower $ 13.00 per hour an. Be sought about your specific circumstances Reporting requirements – Reports are due by March 31,.! Hour Policies, piece-rate, and Oregon may have had greater rates result, the minimum wage, through 31! Florida will join them in September, thanks to a ballot measure passed on Election Day 2020 salespeople... Least twice the state, regardless of size of employer, Remainder of state, regardless of size of.... Standards can be awarded to workers, also known as a pay floor credit, and is excluded from wage. Under IWC wage Order 14-2001 for your business a ballot measure passed on Election Day 2020 contains notice requirements the.
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