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State Minimum Wage, Paid Sick Leave, and Tax Changes to Expect in 2019

Tuesday January 8th 2019

As we head into 2019, more states and localities have announced changes to their minimum wage rates. Here’s a rundown of the latest developments.

States:

  • Alaska: $9.89 (from $9.84), effective Jan. 1, 2019.
  • Arkansas: $9.25 (from $8.50), effective Jan. 1, 2019. The minimum wage will increase annually until it reaches $11 an hour by 2021.
  • California’s hourly minimum wage will rise to $12 for employers with at least 26 employees and $11 for employers with fewer than 26 employees, effective Jan. 1, 2019.
  • Colorado: The state minimum wage will rise to $11.10 (from $10.20), effective Jan. 1, 2019. The tipped-employee minimum wage will also increase, to $8.08 from $7.18. The state’s maximum tip credit is $3.02.
  • Maine: $11 on Jan. 1, 2019.
  • Michigan: The state governor signed legislation on Dec. 14, 2018, that will increase the hourly minimum wage. Effective March 29, 2019, the minimum wage will increase to $9.45, ultimately reaching $12.05 by 2030. The minimum wage rate will not increase in a year the federal Bureau of Labor Statistics determines the unemployment rate to be at least 8.5 percent for the previous year.
  • Missouri: The state’s hourly minimum wage will increase to $8.60 (from $7.85), effective Jan. 1, 2019. The wage rate will increase annually to $9.45 in 2020, $10.30 in 2021, $11.15 in 2022, and $12 in 2023. The wage rate will be annually adjusted for inflation starting in 2024.

Localities:

  • Cook County, Illinois: Townships with the county will have a minimum wage of $13 per hour by July 1, 2020. The wage rate will be indexed to the consumer price index in subsequent years.
  • New York City area: Effective Dec. 31, 2018, New York’s hourly minimum is to rise to $15 for New York City employers of at least 11 employees, to $13.50 for New York City employers of fewer than 11 employees, to $12 for Nassau, Suffolk and Westchester county employers, and to $11.10 for greater New York state employers.
  • Oakland, California: Effective Jan. 1, 2019, the city minimum wage is $13.80. Employers that own, operate, or control hotels with 50 or more guest rooms must pay an hourly minimum wage of $15 if they offer workers health insurance benefits or $20 otherwise, effective July 1, 2019.
  • Paul, Minnesota: The hourly minimum wage will increase incrementally based on employer size, beginning Jan. 1, 2020. The city and businesses with more than 10,000 employees will have a $12.50 minimum wage, effective July 1, 2020, and it will increase to $15 on July 1, 2022. On Jan. 1, 2019, the hourly minimum wage for employers with more than 100 employees is to rise to $9.86 from $9.65, while the minimum wage for employers with up to 100 employees will rise to $8.04 from $7.87.

Other Changes for 2019

Massachusetts also released exclusion amounts for employer-provided transportation benefits. Effective Jan. 1, 2019, $265 per month may be excluded from wages for employer-provided parking, and $140 per month may be excluded for the combined value of transit passes and commuter highway vehicle benefits.

Michigan’s governor also signed paid sick time legislation that provides 35 hours annually to workers covered by the federal Family and Medical Leave Act (excluding train workers, airline workers, and employees covered by collective bargaining agreements).

Employers in Jersey City, New Jersey are now required to pay a payroll tax, calculated at 1 percent of the payroll for private employers in the city, effective Jan. 1, 2019. Wages paid to city residents are exempt from the tax, the city said in Ordinance 18-133.

Finally, Wisconsin implemented a new withholding filing rule that requires employers to file all withholding deposit reports before filing an annual reconciliation, effective Jan. 1, 2019.  The state’s withholding methods will remain the same in 2019 and the state will conform to the federal transportation benefit exclusion amounts in 2019.

Employers must be aware of the changes in their states that impact the wages paid to employees. With iSolved, minimum wage changes are automatically input into the program, ensuring compliance for all employers.

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