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Changes for 2019 in State Minimum Wage Rates

Tuesday November 6th, 2018

Estimated time to read: 1 minute, 45 seconds

As usual, the new year will usher in a multitude of changes in state and municipal minimum wage laws. Let's take a look at some of the reasons why payroll professionals need to be aware of the changes.

Montana, New Jersey, Ohio, South Dakota, and Vermont will all raise minimum wages on January 1, 2019. Most increases are in line with the increase in local inflation. Many states are also raising hourly wages for tipped employees.

For example:

  • Montana's minimum wage rises 20 cents from $8.30 to $8.50, a 2.4 percent hike.
  • New Jersey's hourly minimum wage rises 25 cents from $8.60 to $8.85, a 2.9 percent hike, while the maximum tip credit also rises 25 cents to $6.72 from $6.47, a larger 3.9 percent increase, with a suggested minimum cash wage of $2.13.
  • Ohio's minimum wage also rises 25 cents an hour in 2019 to $8.55 for hourly workers and 15 cents an hour to $4.30 for tipped employees. A new law requires the hourly cash wage in 2019 for tipped workers to be no less than half the regular minimum wage.
  • South Dakota's minimum wage increases 25 cents (2.8 percent) from $8.85 an hour to $9.10.
  • Vermont's 2019 minimum wage increases 28 cents (2.7 percent) to $10.78 from $10.50, in line with a 2014 bill that increased the state hourly minimum wage in annual increments through 2018 and is now annually adjusted for inflation. The state's hourly minimum cash wage for tipped workers, which is to be no less than half the minimum wage, increases 14 cents (also 2.7 percent) to $5.39 from $5.25.

At the same time, many municipalities are setting their own minimum wages for the new year, often with much higher minimum wages than state laws require. In 2019, Seattle employers with more than 500 workers worldwide must pay at least a $16 hourly minimum wage. Seattle employers with no more than 500 workers that do not contribute toward employees' medical benefits or reported tips must pay at least a $15 hourly minimum wage in 2019.

Los Angeles has also announced that its minimum wage will rise $1 an hour (7.5 percent) to $14.25 for companies with 26 or more employees, but this increase will not take effect until July 1, 2019. Smaller employers' workers will get a $1.25 increase to $13.25. This rate is $2.25 more than the state's minimum wage.

While some pay standards will change with the ringing in of the new year, others will stay the same. For example, the unemployment-taxable wage base for 2019 is changing in only four states:

  • Iowa (up $700 to $30,600)
  • Nevada (up $700 to $31,200)
  • Washington (up $2,500 to $49,800)
  • Wyoming (up $700 to $25,400)

With these changes, it's important for payroll professionals to be aware of what will impact processing in their states and for their employees. iSolved will be updated with the changes to maintain compliance with the latest rules and regulations across the states.