Overview. The federal minimum wage for covered nonexempt employees is $7.25 per hour effective July 24, 2009. The federal minimum wage provisions are contained in the Fair Labor Standards Act (FLSA). Many states also have minimum wage laws. In cases where an employee is subject to both the state and federal minimum wage laws, the employee is entitled to the higher of the two minimum wages.
Under federal law, an employer of a tipped employee is only required to pay $2.13 per hour in direct wages if that amount combined with the tips received at least equals the federal minimum wage. If the employee’s tips combined with the employer’s direct wages of at least $2.13 per hour do not equal the federal minimum hourly wage, the employer must make up the difference. Many states, however, require higher direct wage amounts for tipped employees.
Please carefully review the information and effective dates provided below as they vary by state. For your convenience we have provided links to additional information which you may access by clicking the state name below.
Effective Date. July 1, 2017
Details.
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Jurisdiction
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Minimum Wage Rate
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District of Columbia
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$12.50 per hour (currently $11.50).
Tipped employees must be paid at least $3.33 (currently $2.77) in cash wages.
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Maryland
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$9.25 per hour (currently $8.75).
Tipped employees must be paid at least $3.63 (currently $3.63) in cash wages.
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Oregon
· Standard
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$10.25 per hour (currently $9.75).
Tip Credit not permitted in Oregon.
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· Oregon – Portland Metro
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$11.25 per hour (currently $9.75).
Tip Credit not permitted in Oregon.
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· Oregon – Nonurban Counties
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$10.00 per hour (currently $9.50).
Tip Credit not permitted in Oregon
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Call to Action. Employers must comply with minimum wage laws on the applicable effective dates. Employers should review their employee’s hourly rate of pay and prepare to make necessary adjustments to bring employees to the correct minimum wage on the effective dates indicated in each state’s law. Please take careful note of the effective date of each of the minimum wage adjustments as they vary by state.
Local Jurisdiction Impact. Employers should also be aware that in addition to state minimum wage laws there are several municipalities that will be adjusting their minimum wage effective July 1, 2017. As it is not within the scope of our services to support local compliance, please check any applicable municipality laws for additional information.
If you have any questions regarding this article, please contact your Relationship Manager or Service Team.