United States: Minimum Wages, Maximum Challenges In 2016 (2017, 2018 . . .)

Although the state-level minimum wage changes in 2015 have been tame compared to the significant changes in 2014,1 employers should be aware of a number of minimum wage legislative developments on the federal, state, and local levels this year. The U.S. Department of Labor has proposed significant increases to the minimum salary that must be paid to executive, administrative, and professional employees for them to be exempt from federal minimum wage and overtime requirements. Proponents of increased minimum wages have succeeded in having more cities and counties enact local minimum wage laws and raise minimum wage rates where rates have remained unchanged for years. 

This article will discuss minimum wage changes that will occur in 2016 and subsequent years. We will briefly discuss the impact these increases can have on overtime-exempt employees. Additionally, we will take a closer look at local minimum wage developments. Finally, we will provide recommendations on how employers can effectively manage minimum wage changes on the federal, state, and local levels.

Complications in Minimum Wage Compliance

Compliance with minimum wage requirements has been complicated by California's and Washington State's restrictive interpretations of how the minimum wage must be paid. In California and Washington State, hourly-paid employees must be paid the minimum wage for each increment of work time, even if the employees' total pay, when divided by the hours worked, would exceed the minimum wage. In California, a piece rate pay plan is considered to provide compensation only for the activities which are directly related to earning the piece rate, and in Washington State a piece rate pay plan is not considered to provide compensation for rest breaks. For piece rate workers, separate compensation has been found to be due for non-productive and rest periods in California,2 and for rest periods in Washington.3

Compliance with California's minimum wage with respect to piece-rate-paid employees will become more complicated in 2016 by new Labor Code section 226.2. Section 226.2 will require piece-rate employees to be separately paid for non-productive time and for rest and recovery periods. Section 226.2 will also impose additional recordkeeping and pay stub requirements.4 The new statute also offers a defense to claims that compensation was not provided for rest and recovery periods. 

Overview of State Minimum Wage Increases5

Currently6 11 states require officials to examine and potentially adjust the minimum wage annually: Arizona; Colorado; Florida; Missouri; Montana; Nevada; New Jersey; Ohio; Oregon; South Dakota;7 and Washington.

To date, 15 state legislatures have enacted laws increasing the minimum wage in 2016: Alaska; Arkansas; California; Connecticut; District of Columbia; Hawaii; Maryland; Massachusetts; Michigan; Minnesota; Nebraska; New York;8 Rhode Island;9 Vermont; and West Virginia. Additionally, Arkansas, Connecticut, and Massachusetts have scheduled increases in 2017, and Hawaii, Maryland, Michigan, and Vermont have set increases for 2017 and 2018.

Decreased Consumer Price Index Causes Many State Minimum Wages to Not Increase 

Many state minimum wage rates are adjusted annually based on changes to the consumer price index (CPI). The CPI used by most states either decreased or the increase was insufficient to trigger a raise in 2016. However, employers should not expect a corresponding decrease in the minimum wage. Rather, 2015 rates will continue into and throughout 2016 in the following states: Arizona; Florida; Missouri; Montana; New Jersey; Ohio; Oregon; and Washington State.

To read the full article please click here.


1 See Brian Dixon and Sebastian Chilco, The Future of the Minimum Wage – 2015 and Beyond, Littler Insight (Nov. 13, 2014).

2 See Richard Rahm, Julie Dunne, and Michelle Heverly, "That Can't Be Right!" California Appellate Court Rules that Piece Rate Workers Are Entitled to Separate Hourly Compensation, Littler Insight (Mar. 22, 2013); see also Bluford v. Safeway Inc., 216 Cal. App. 4th 864, 872 (2013) (“a piece-rate compensation formula that does not compensate separately for rest periods does not comply with California minimum wage law.”). Like rest periods, Labor Code section 226.7 requires that a recovery period mandated by state law be counted as hours worked.

3 See Breanne Sheetz Martell, Washington Piece-Rate Workers to Receive Separate Rest Breaks, Littler ASAP (July 23, 2015).

4 See Richard Rahm and Angela Raforth, California Governor Signs AB 1513, Severely Limiting Piece-Rate Compensation but Throwing a Liability Life Raft to Employers, Littler Insight (Oct. 12, 2015).

5 Minimum wage rates in the following 25 states are currently not scheduled to change or possibly change via annual adjustment: Alabama; Delaware; Georgia; Idaho; Illinois; Indiana; Iowa; Kansas; Kentucky; Louisiana; Maine; Mississippi; New Hampshire; New Mexico; North Carolina; North Dakota; Oklahoma; Pennsylvania; South Carolina; Tennessee; Texas; Utah; Virginia; Wisconsin; Wyoming.

6 The following states will adjust their rates annually in the future: Alaska (effective January 1, 2017); District of Columbia (effective July 1, 2017); Minnesota (effective January 1, 2018); Vermont (effective January 1, 2019); and Michigan (effective April 1, 2019).

7 2016 is the first year South Dakota’s minimum wage will be annually adjusted.

8 New York’s minimum wage rates change on December 31, 2015, which for all intents and purposes is a 2016 increase.

9 Rhode Island is the only state to enact a relevant law in 2015; other states enacted laws in previous years.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Sebastian Chilco
Similar Articles
Relevancy Powered by MondaqAI
Ogletree, Deakins, Nash, Smoak & Stewart
Sheppard Mullin Richter & Hampton
Ogletree, Deakins, Nash, Smoak & Stewart
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Ogletree, Deakins, Nash, Smoak & Stewart
Sheppard Mullin Richter & Hampton
Ogletree, Deakins, Nash, Smoak & Stewart
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions