Friday, May 23, 2014

Connecticut Leads Nation in Raising Minimum Wage to $10.10

On March 27, 2014, Connecticut Governor Dannel Malloy signed Senate Bill 32, now known as Public Act 14-1, which gradually increases Connecticut’s minimum hourly wage to $10.10 over the next three years. Currently, Connecticut’s minimum wage is $8.70 per hour, but this amount will increase to $9.15 per hour on January 1, 2015; $9.60 per hour on January 1, 2016, and $10.10 per hour on January 1, 2017. 

            This past March, President Barack Obama visited Connecticut to advocate for raising the federal minimum wage to $10.10.  Considering the partisan divide in Washington, it is unlikely that Congress will act on this. Connecticut is the first state to respond to Obama’s call to action.  Advocates for this legislation have said that it will help working families and will stimulate the economy by providing additional funds to people who spend their money locally; whereas opponents of the Act have cautioned that it could slow hiring at a time of already high unemployment.

            The Act also effectively raises the minimum wage for tipped employees, such as hotel staff, wait staff, and bartenders, who may currently have a percentage of their tips counted towards their hourly income. Employers are allowed to count some employees’ tips as a percentage of their hourly minimum wage, which results in employers paying a smaller portion of the employees’ required minimum wage as long as the employees’ tips make up the difference. Presently, for hotel and wait staffs, employers are required to pay their employees $5.69 per hour, which will increase to $5.78 in 2015, $6.07 in 2016, and $6.38 in 2017. Similarly, bartenders who are now receiving $7.34 per hour exclusive of tips will receive $7.46 in 2015; $7.82 in 2016; and $8.23 in 2017.        

            In addition, the Act enables employers to pay learners, beginners, and employees younger than 18 years of age an hourly rate equal to 85% of the required minimum wage for an employee’s first 200 hours of employment. Thus, the required minimum wage for learners and beginners will increase from $7.40 to $7.78 in 2015; $8.16 in 2016; and $8.59 in 2017. 

            Attorney David Rintoul has experience handling wage and hour claims, and defending employers against Department of Labor Wage and Hour Audits, and can work with you to ensure compliance with this new legislation.