Minimum Wage Hikes Win at the Polls

Conservative politicians did well earlier this month in the mid-term elections, but so did a measure most consider liberal: increases in state minimum wages.  The success of these measures is all the more surprising because they passed in traditionally red states.  The ballot measures are summarized below:

–          Alaska:  Alaskans voted to raise the minimum wage to $9.75 by 2016.  The state’s current minimum wage of $7.75 per hour will increase to $8.75 beginning January 1, 2015.  Another automatic increase to $9.75 will occur on January 1, 2016. From that point, the minimum wage will be adjusted based on inflation or remain $1 higher than the federal minimum wage, whichever yields the high wage.

–          Arkansas: Arkansans approved a measure to increase the state’s minimum wage incrementally to $8.50 per hour by January 1, 2017.  The hourly minimum wage will increase from $6.25 to $7.50 on January 1, 2015.  It will then increase again to $8.00 on January 1, 2016 and to $8.50 on January 1, 2017.

–          Nebraska: Nebraskans also voted to increase their state’s minimum wage incrementally.  The minimum wage will increase from $7.25 to $8.00 on January 1, 2015; and again from $8.00 to $9.00 on January 1, 2016.

–          South Dakota: South Dakotans voted to increase the minimum wage from $7.25 per hour to $8.50 per hour beginning on January 1, 2015.  The measure also approved tied future increases in the minimum wage to inflation.  Tipped employees will also enjoy a wage increase, as the measure tied tipped employee minimum wage at half that of the minimum wage, raising their minimum wage from the current $2.13 to $4.25 an hour.

 –          Illinois: Although it does not have the effect of law, voters in Illinois voted to approve an “advisory question” calling on the Illinois Legislature to raise the state’s current $8.25 per hour wage to $10 per hour effective January 1, 2015.  The Illinois Assembly will likely consider a minimum wage increase in the coming months; though the election of Republican Bruce Rauner could make the passage of such an increase difficult.

Voters in the cities of Oakland and San Francisco also voted to increase their municipal minimum wages.  Minimum wage increases are also on the horizon in the coming year in states where no minimum wage issue was on the ballot.  For instance, in Missouri, the state minimum wage will automatically increase from its current $7.50 per hour to $7.65 per hour in the new year due to inflation.

Companies with employees being paid at or near the minimum wage in states with minimum wage increases should begin preparing now; and periodically check the applicable minimum wage to comply with local and state law.  The St. Louis labor attorneys at McMahon Berger can help you review your pay practices and avoid costly and disruptive litigation.