22 Subsidized Temporary Youth / Transitional Employment Program – Under 18 Years Old. If the rate will not change, we do not include that information. This means that the minimum salary for exempt employees in 2020 is either: $4,160.00 per month (or $49,920.00 annually) if the employee works for an employer of 25 or fewer … Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney. Note, however, even using the lower statutory CPI-adjustment MCW, both would exceed the state’s 2021 MCW of $2.55 per hour. 44 Similar requirements exist in Indiana, North Dakota, Pennsylvania, and Wisconsin, but the minimum wage in each state is the same as the FLSA rate: $7.25 per hour. First, we highlight state, counties, and cities where the minimum wage will increase in 2021. On January 1, 2017, the minimum wage will increase in California to $10.50 per hour for employers who employ 26 or more employees. 9 If an employer pays at least $1.50 per hour per employee towards an employee medical benefits plan, which allows the employee to receive employer-compensated care from a licensed physician, the employer can pay employees $1.50 per hour less than the minimum wage. The 2021 salary threshold for executive, professional, and administrator exempts for businesses in Washington with 50 or fewer employees will be 1.5 times minimum wage, which is $821.40 per week (or $42,712.80 annually). 12 The minimum wage for employers with 26 or more employees remains $15.00 per hour. To be classified as exempt from New York's overtime requirements, executive and administrative employees must meet minimum salary requirements and satisfy certain duties tests. Exempt Employees: Minimum Salary Requirements for 2021. Federal law establishes a minimum salary of $684 per week for the professional exemption. Note that the some – but not all34 – New York rates will also increase on December 31, 2021, but for this article we focus on the New York rates that will apply every day in 2021 except December 31, 2021. By S. Libby Henninger and Sebastian Chilco on, General Data Protection Regulation (GDPR), Littler Restructuring Assessment Solution, Florida Passes Amendment 2, Gradually Increasing Florida’s Minimum Wage to $15 an Hour, https://www.oaklandca.gov/topics/measure-ff-and-measure-z, New State Employment Laws Set to Take Effect on January 1, 2021, On September 1, 2020, the minimum wage in, On November 1, a new $14.00 per hour minimum wage for long-term care facility direct care staff took effect in. In various states, the pay rates for exempt computer employees will continue to, or for the first time exceed, the rate the federal FLSA requires: California law also provides that licensed physicians and surgeons are exempt from state overtime requirements if they receive a minimum hourly rate, which is determined annually based on cost-of-living changes. Localities with higher minimum wages, such as the City of Seattle and Sea-Tac, will be unaffected. 7 At the time of publication, Oakland had not announced its adjusted 2021 hotel-worker-specific minimum wage rates. That is up from $13.50 an hour in 2020. 38 In the COMPS Order, the weekly and annual salary amounts may not perfectly align, so the "math" (M) rate (multiplying weekly by 52 and making further division) and "rule" (R) rate (dividing rule's annual rate) alternate being the highest possible rate. Small businesses: $821.40/week ($42,712.80/year) Large businesses: $958.30/week ($49,831.60/year) These include: Earlier this year, the state adopted the Colorado Overtime and Minimum Pay Standards Order ("COMPS Order") #36. Additional changes include: In New York City, the minimum wage will remain $15.00, whereas the minimum wage in Nassau, Suffolk, and Westchester Counties will increase to $14.00, and, in the remainder of New York State, the minimum wage will increase to $12.50. Each January 1 afterwards, the city will annually adjust the minimum wage based on changes to the CPI. ), CA (≤25)5, Oakland, CA (Hotel – No Health Benefits), San Francisco, CA (Gov't-Supported Employee), Montgomery County, MD (11-50 or ≥11 & Tax-Exempt,  Home Health, or Community Based Service Provider), Minnesota (<$500K Gross & Certain Hotels, etc. New Mexico, New Year, New Issues: State Rate Exceeds Various Local Rates in 2021. Note that in two aforementioned states – Arizona and Illinois – local minimum wage rates may apply (see above). The minimum wage in some of these states will increase in 2021,43 e.g., in Arizona the minimum wage will increase to $12.15 on January 1, and on July 1 the Nevada minimum wage will increase to $9.75 or $8.75 per hour, depending on whether an employer offers health benefits. However, this would result in paying employees less than the state minimum wage. In 2021, those thresholds are: For small businesses with 1-50 employees, an exempt employee must earn a salary of at least 1.5 times the minimum wage, or $821.40 a week ($42,712.80/year). For 2021, this means exempt employees must receive a minimum annual salary of $58,240 for employers with more than 26 employees, and $54,080 for employers with 25 employees or less. On January 1, 2022, the minimum … California: An employee’s earnings must exceed one-and-a-half times the state minimum wage, which on January 1, 2021, will increase to $14.00 per hour for employers with 26 or more employees and to $13.00 per hour for employees with 25 or fewer employees. Less than one month before voters went to the polls, the Florida Department of Economic Opportunity announced an annual CPI adjustment to take effect on January 1, 2021 ($8.65 per hour), as it was required to do under the state constitution before the amendments. On January 1, 2021, the minimum salary required to qualify for the executive/supervisor, administrative, and professional exemptions under state law increases to $778.85 per week. SeaTac & Seattle). March 1, 2021: Santa Fe and Santa Fe County (Unincorporated), NM. May 1, 2021: Virginia. July 1, 2021: Berkeley, Emeryville, Fremont, Long Beach (Hotel), Los Angeles, Los Angeles County (Unincorp. Exempt Employees. On September 30, 2027, and each subsequent September 30, the state will annually adjust the minimum wage based on changes to the consumer price index (CPI).1. . Nevertheless, for the purpose of this article, the rates above use those the state labor department contend apply. Employers can satisfy this obligation through wages (including applicable commissions, piece-rate, and bonuses), tips, and medical benefits. Salary Thresholds for Overtime Exempt Employees to Rise Jan. 1, 2021 Increase in state’s minimum wage rate to $13.69 an hour triggered recalculation As a result of the state’s minimum-wage rate rising to $13.69 an hour on Jan. 1, 2021, a new minimum salary threshold for overtime-exempt employees will also increase. Rev. 18 Employers subject to the state minimum wage that applies in New York City – generally or for fast food worker rate – will not see an increase in 2021, as both rates will remain $15.00 per hour. New Minimum Wage in 2021 On January 1, 2021, Washington’s minimum wage will increase from $13.50 to $13.69. Specifically, exempt employees must earn a fixed monthly salary of at least double the minimum wage for full-time employment. Among other things, the rule increases the minimum salary requirement incrementally until it reaches 2.5 times the state minimum wage in 2028. They will remain $15.00 (minimum wage), $2.50 (maximum tip credit), $12.50 (minimum cash wage), $3.25 (tip threshold), $8.40 (tip threshold resort hotel). All other marks are the property of their respective owners. Being paid on a “salary basis” means an employee regularly receives a predetermined amount of compensation each pay period on a weekly, or less frequent, basis. This number was based on the 20 th percentile of weekly earnings for full-time salaried workers in the lowest income census region (currently the South). 29 This includes any rate that would be in effect before the scheduled increase in 2021. Of course, it remains possible other states could join this list. Using the 2021 minimum wage, L&I has calculated the salary thresholds taking effect Jan. 1, 2021: Small businesses (1-50 employees): An exempt employee must earn a salary of at least 1.5 times the minimum wage, or $821.40 a week ($42,712.80/year). 11 San Jose has a separate rate for youth training program participants, which the city sets in an approved application and remains valid for one year. Or. Before classifying and treating any employee as exempt from overtime, employers should confirm that the employee satisfies all applicable tests for overtime exemption under federal and state laws. Effective January 1, 2021, for licensed physicians and surgeons, the minimum hourly rate of pay will increase from $84.79 to $86.49. In these jurisdictions, such employees must earn at least the applicable minimum wage for each hour worked in a workweek. However, for this article we focus on the New York rates that will apply in every day in 202128 except December 31, 2021. Additionally, the ordinance contains notice requirements concerning the tip credit, and discusses service charges, credit card tips, and tip pooling. To qualify under the FLSA’s 7(i) overtime exception, the regular rate of pay for an employee of a retail or service establishment must exceed one-and-a-half times the federal minimum wage, and more than half the employee’s compensation for a representative period (not less than one month) must represent commissions on goods or services. Under the FLSA, to be a bona fide executive, administrative, or professional employee, employer must compensate the individual on a salary or fee basis (only for administrative and professional employees) at least $684 per week, excluding board, lodging, or other facilities. To help manage this challenge, below we provide a rates-only update that details scheduled state- and local-level wage increases throughout 2021 so employers can determine the minimum amount they must pay non-exempt, tipped, and certain exempt employees. Salary thresholds for overtime exempt workers are a multiplier of state minimum wage for a 40-hour workweek. 31 This includes any rate that would be in effect before the scheduled increase in 2021. Additionally, the ballot measure changes the minimum cash wage for tipped employees standard from half the state minimum to half the local minimum wage. As a result, the state rate could exceed the local rate. Service Employee: An employer must directly pay a service employee at least the hourly Cash Wage (CW), and cannot claim a tip credit that exceeds the hourly Tip Credit rate (TC). 30 This includes any rate that would be in effect before the scheduled increase in 2021. On the Sonoma City Council November 16, 2020 agenda was “Discussion, Consideration and Possible Action on Provisions of the City’s Minimum Wage Ordinance Regarding the Health Benefits Credit.”, 14 Although, beginning in 2021, the ordinance allows an employer to pay employees $1.50 per hour less than the applicable local minimum wage if they pay at least $1.50 per hour per employee towards an employee medical benefits plan, employers must also comply with state law, so the credit cannot cause an employee's wage to drop below the state minimum wage. Most provisions become effective March 16, 2020, with the exception of the increased salary … January 1, 2024: $55,000 per year ($1,057.69 per week) 6. Like the minimum wage, the salary levels … In 2021, the (M) rate exceeds the (R) rate of $40,500. Notwithstanding the minimum amount 32 employers must pay executive, administrative, and professional employees for these workers to be exempt from the federal Fair Labor Standards Act’s (FLSA) minimum wage and overtime requirements, currently at least seven states have pay requirements that will exceed the revised federal standard in 2021… Minnesota: An employee’s regular rate of pay must exceed one-and-a-half times the state minimum wage, which on January 1, 2021, will increase to $10.08 per hour for employers with $500,000 in annual gross sales, and to $8.21 per hour for employers with less than $500,000 in annual gross sales, and certain hotels. Employers cannot claim a tip credit for fast food employees. 17 Although the ordinance uses “Beginning January 1, 2009, and each year therafter [sic]. This blog provides practical information on the subject matter. The content on this blog is "as is" and carries no warranties. 33 Until the FLSA rate increased in 2020, Connecticut, Iowa, and Oregon may have had greater rates. 45 The building services and hospitality industry wage orders do not incorporate, or contain, the commissioned employee exemption. § 653.025. Various states' minimum salary or fee amounts exceed the federal rate, and in 2021, these pay requirements will change. Although this logic remains true concerning the federal minimum wage, which has remained $7.25 per hour since July 24, 2009, in recent years more states have taken steps to increase their rates. That said, the regulations do not prohibit prospective changes to exempt employees’ salaries (provided they still receive the minimum required salary). Finally, because New York has varying standards, we include the numbers in a standalone section after the below chart. The U.S. Department of Labor recently released a proposed rule increasing the long-standing amount, as one of the requirements for “exempt” employees under the Fair Labor Standards Act. 6 The minimum wage for employers with 26 or more employees remains $15.00 per hour. The increase in 2021 is significant. This development creates unique issues for employers subject to local minimum wage ordinances in Albuquerque, Bernalillo County, and Las Cruces. Employers with operations subject to this rate should monitor the following city webpage: https://www.oaklandca.gov/topics/measure-ff-and-measure-z. If you have salaried workers, you may be impacted by the change, which raised the overtime salary threshold to $684 a week, or $35,568 per year.. Here’s an in-depth look at the new overtime rule for 2020, and a few steps on how to adapt. A summary of 2021 changes to state minimum salary requirements is below. Moreover, all adjusted rates take effect on January 1. The "General" rate applies in areas not covered by the "Urban" or "Nonurban" rates. As per the Wage Order, the minimum salary level for the executive exemption and the administrative exemption governing employers in New York State, but outside of New York City and outside of Nassau, Suffolk and Westchester Counties, will rise to: California requires the minimum salary for exempt employees to be twice the state hourly minimum wage level. Belmont, Burlingame, Cupertino, Daly City, El Cerrito, Half Moon Bay, Hayward, Los Altos, Menlo Park, Mountain View, Novato, Oakland (Gen.), Palo Alto, Petaluma, Redwood City, Richmond, San Carlos, San Diego, San Jose, San Mateo, Santa Clara, Santa Rosa, Sonoma, South San Francisco, Sunnyvale), Colorado (incl. As a result of the change in the minimum wage for 2021, the minimum salary required for the states' administrative, professional, and executive exemptions will increase to $827.20 per week (or two times the minimum wage for a 40-hour week) on January 1, 2021. .” the City of Santa Fe has routinely adjusted its rate on March 1. See Santa Fe, NM Code § 28-1.5(B). 15 Subsidized Temporary Youth / Transitional Employment Program – Under 18 Years Old. District of Columbia: An employee’s regular rate of pay must exceed one-and-a-half times the district minimum wage, which on July 1, 2021, will be annually adjusted from its current $15.00 per hour rate. … Stat. Preset increases to the minimum wage will occur on January 1 in 2023 ($14.00) and 2024 ($15.00). Minimum wage laws can affect businesses of all sizes, whether operating nationwide, in multiple jurisdictions, or only in one state, county, or city. Colorado: An employee’s regular rate of pay must be at least one-and-a-half times the state minimum wage, which on January 1, 2021, will increase to $12.32 per hour. Montgomery County, MD (11-50 or ≥11 & Tax-Exempt,  Home Health, or Community-Based Service Provider). Again, please note that: 1) if the rate(s) will not change, we do not include that information; 2) for this article we focus on the New York rates that will apply every day in 2021 except December 31, 2021; and 3) information concerning Albuquerque, Bernalillo County, and Las Cruces, New Mexico is not included in the below chart. In many cases, the state criteria are harder to meet than the federal criteria. Creates unique Issues for employers with 26 or more employees remains $ 15.00 per hour the FLSA increased! 13.50 to $ 14 per hour require an annual adjustment to their local minimum wage in.! Orders do not include that information in 2023 ( $ 684.00 per week or! 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