What lies ahead for minimum wage in 2021 and beyond?
Our recent webinar, Get Ready for 2021: Minimum Wage News and Trends, offered a comprehensive examination of new rates, plus a look at what the future of minimum wage may hold.
Dana Holle, GovDocs Attorney, Employment Law and Compliance, led the presentation, covering:
- An overview of 2021 rates
- Specific rates for states, counties and cities
- Unique rates employers should be aware of
- The potential for a new federal minimum wage rate
Check out the complete recording of the webinar for a more in-depth look at the state of minimum wage in 2021.
2021 Minimum Wage: Overview
At a glance, employers have plenty to keep an eye on when it comes to 2021 minimum wage rates.
Thirty states have a minimum wage higher than the federal rate, along with more than 50 cities (37 in California alone). Many of these rates go up on Jan. 1, 2021.
Meanwhile, another eight cities will breach the $15-an-hour threshold, with Flagstaff, Ariz., increasing its minimum wage $2 to reach $15 in 2021.
Minimum wage remains a “current and hot topic” for employment law, Holle said, which she illustrated with a complete rundown of 2021 rates.
2021 Minimum Wage Rates – Unique Circumstances
Holle’s presentation covers nearly every early 2021 minimum wage increase. Be sure to view the full webinar for the numbers.
We also have other minimum wage resources for employers:
For the sake of brevity, we will examine some of the more unique aspects of 2021 minimum wage, starting with South Dakota.
There, the legislature passed a law saying the tipped employee wage shall be no less than 50 percent of the minimum wage. That means, at the outset of 2021, the minimum wage in South Dakota will be:
- $4.725 (tipped employees)
Elsewhere, Florida minimum wage has two rate increases set for 2021. The first was scheduled and is in effect Jan. 1, 2021:
- $5.36 (tipped employees)
But Florida voters in November 2020 passed a ballot measure that will increase minimum wage again on Sept. 30, 2021, when it goes up to $10. Eventually, in 2026, Florida will have a $15 minimum wage.
Meanwhile, Michigan’s scheduled 2021 minimum wage increase will likely not go into effect due to high unemployment figures. The rates for next year will remain at the 2021 levels — $9.65 and $3.67 for employees who receive tips.
Similarly, Virginia opted to delay its minimum wage increase to May 2021 due to economic concerns over COVID-19.
Related: Early 2021 Minimum Wage Rates for California Cities
Lastly, voters in Portland, Maine, passed a minimum wage increase in November 2020 that included hazard pay for minimum wage earners during a public emergency. However, there have been legal challenges to the wording of the law and whether that includes the current pandemic. Holle advised employers to check with legal counsel regarding minimum wage in Portland.
2021 Trends and Federal Minimum Wage
Holle also examined what the future of minimum wage could look like.
The COVID-19 pandemic has been especially hard on the hospitality and restaurant industries — bad news for tipped employees. Lawmakers in five states have proposed eliminating tipped wages, though so far the legislation hasn’t gained much traction, Holle said.
Still, there will likely be a “wide-ranging” reaction to the economic conditions of minimum wage workers, she said. Some states, New Jersey, for example, have added additional protections. In neighboring New York State, the tip credit for workers in the Miscellaneous Industry category will be eliminated by the end of 2020.
The status of gig workers will also be something to watch, Holle said. She cited Seattle, the first city to set premium pay for gig workers during the pandemic. The city has distinct fees for food delivery drivers: $2.50 for one pickup or drop-off point in Seattle, and $1.25 for each additional pickup or drop-off.
Hazard pay could also become more of a focus due to the pandemic, Holle said. The federal Fair Labor Standards Act does not require employers to offer hazard pay, but more than 10 states have introduced such legislation, while some have a law on the books.
Lastly, with President-elect Joe Biden taking office soon, his support for increasing the federal minimum wage, which hasn’t gone up since 2009, bears monitoring, Holle said. Biden has voiced his support for a $15 minimum wage.
Of course, many of Biden’s initiatives hinge on the U.S. Senate runoff in Georgia.
“That may give us a better understanding of the landscape of Washington, D.C., and the potential of a federal minimum wage increase over the next few years,” Holle said.