Quirky Minimum Wage Rates to Look Out for in 2021

Some minimum wage laws are fairly straightforward. Others, not so much. As employers plan for the new year, there are several quirky 2021 minimum wage rates to look out for.

Often, jurisdictions schedule increases at the beginning or middle of the year, with increases set by statute. But some are a bit trickier to navigate. Especially this year. And we’re talking about more than indexed rates.

Below are six jurisdictions with odd minimum wage rates to keep an eye on in 2021.

South Dakota Minimum Wage

Of all the jurisdictions on this list, perhaps the quirkiest is South Dakota.

When crafting the state’s minimum wage law, lawmakers in South Dakota decided the tipped minimum wage can be no less than 50 percent of the standard minimum wage. So, when the Jan. 1, 2021, minimum wage increase went into effect, it created a funky-looking rate for tipped employees of $4.725.

The standard rate for South Dakota in 2021 is $9.45.

Michigan Minimum Wage

In Michigan, the minimum wage law has a specific provision tied to the unemployment rate.

Under the state’s Improved Workforce Opportunity Act, passed in 2018, minimum wage increases do not go into effect if Michigan’s unemployment rate is higher than 8.5 percent.

In December 2020, Michigan officials announced that the planned 2021 minimum wage increase would likely not go into effect. Since then, the state has updated its minimum wage labor law posting to reflect no increase for 2021.

The state’s rates will remain at 2020 levels:

• $9.65
• $3.67 for tipped employees

Related: Early 2021 State Minimum Wage Rates

Florida

Following a successful 2020 ballot initiative, Florida will see two 2021 minimum wage increases.

First, the state’s planned increase at the start of the year went into effect Jan. 1, 2021. The standard minimum wage rate in Florida for most of the year is $8.65.

However, the voter-approved ballot measure will increase minimum wage again on Sept. 30 this year, bringing it to $10 an hour. Eventually, in 2026, Florida will have a $15 minimum wage.

Still, the tip credit remains the same — $3.02. That means the tipped employee wage will always be the regular minimum wage less that amount.

Virginia

The simplest of the quirky 2021 minimum wage rates is in Virginia.

Because of economic concerns over the COVID-19 pandemic, Virginia decided to delay its minimum wage increase to May 2021. It was initially to go into effect Jan. 1.

Starting May 1, 2021, the minimum wage in Virginia will be $9.50, eventually reaching $15 in 2026.

Maine Cities

In November 2020, voters in Portland, Maine, passed a minimum wage increase. Per the ballot measure, rates will be:

• 2022 – $13 and $6.50 for tipped employees
• 2023 – $14 and $7 for tipped employees
• 2024 – $15 and $7.50 for tipped employees

But that’s not the quirky part. The ordinance 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. Employers may want to check with legal counsel regarding minimum wage in Portland.

Also, voters in Rockland, Maine, passed a ballot referendum in November 2020 to increase rates starting in 2022. Each January, the rates will increase to:

• 2022 – $13 and $6.50 for tipped employees
• 2023 – $14 and $7 for tipped employees
• 2024 – $15 and $7.50 for tipped employees

After 2024, the rates in Rockland will increase based on the Consumer Price Index.

New 2021 Minimum Wage Increases

Wrapping up this minimum wage discussion, five cities in California had new minimum wage laws go into effect Jan. 1.

They are:

• Half Moon Bay – $15
• Hayward – $15 for large employers (26 or more workers) and $14 for small employers
• San Carlos – 15.24
• East Palo Alto – $15
• Burlingame – $15

Related: Early 2021 Minimum Wage Rates for California Cities

Conclusion

Managing employment law compliance is a complex task, as the above illustrates.

While the incoming administration may push for a new federal minimum wage rate, smaller jurisdictions continue to push for higher rates in an effort to attract workers. The federal minimum wage of $7.25 hasn’t increased in more than a decade.

Employers with locations across the U.S. must continue to monitor new laws, and apply them correctly, in order to maintain compliance.

This Employment Law News blog is intended for market awareness only, it is not to be used for legal advice or counsel.