Minimum Wage Updates 7/1/2021

Effective July 1, 2021, two states and several cities/counties will be increasing their minimum wage – this means payroll processes will have to be updated if you have employees in the specific areas. The federal minimum wage is currently $7.25, but many states and cities have their minimum wage set higher than that. Read below for all of the minimum wage updates that are effective July 1, 2021. 

CALIFORNIA

  • Berkeley – $16.32 (including youth work & training)
  • Emeryville – $17.13     
  • Fremont – $15.00 (≤25 employees)
  • Fremont – $15.25 (>26 employees)
  • Long Beach – $15.69 (hotels only)
  • Los Angeles City and Unincorporated Los Angeles County – $15.00 (≤25 employees)
  • Los Angeles City and Unincorporated Log Angeles County – $17.64 (hotels w/ 150+ rooms)
  • Malibu – $15.00 (≤25 employees)
  • Milpitas – $15.65 
  • Pasadena – $15.00 (≤25 employees)
  • San Francisco – $16.32 
  • San Francisco – $14.44 (government-supported employee)
  • Santa Monica – $15.00 (≤25 employees, non-hotel)
  • Santa Monica – $17.64 (hotels)

DISTRICT OF COLUMBIA

  • District of Columbia – $15.20
  • District of Columbia – $5.05 (tipped employee)

ILLINOIS

  • Chicago – $15.00 (>21 employees)
  • Chicago – $9.00 (>21 employees, tipped employees)
  • Chicago – $14.00 (4 to 20 employees)
  • Chicago – $8.40 (4 to 20 employees, tipped employee)
  • Chicago – $11.00 (youth wage)
  • Chicago – $6.60 (youth wage, tipped employee)
  • Cook County – $6.90 (tipped employee)

MARYLAND

  • Montgomery County – $13.50 (1 to 10 employees)
  • Montgomery County – $14.00 (11 to 50 employees)
  • Montgomery County – $15.00 (>51 employees)

MINNESOTA

  • Minneapolis – $14.25 (>100 employees) 
  • Minneapolis – $12.50 (≤100 employees) 
  • St. Paul – $12.50 (101 to 1,000 employees)
  • St. Paul – $11.00 (6 to 100 employees)
  • St. Paul (≤5 employees)

NEVADA

  • Statewide – $8.75 (employees who receive health benefits that meet certain criteria)
  • Statewide – $9.75 (employees who do not receive sufficient benefits)

NEW YORK

  • Cities outside of NYC – $15.00 (fast food employees only)

OREGON

  • Within Portland’s Urban Growth Boundary – $14.00
  • Nonurban Counties – $12.00
  • All other “Standard” Counties – $12.75
Minimum Wage Increases for 2021

2020 has been a year of crazy events, from a global pandemic to a historical election – we have constantly been on our toes. 2021 might be just as crazy, but we can go into it with some knowledge. 

The minimum wage for many states will be changing going into the new year. The federal minimum wage is $7.25/hour but if states or municipalities have a higher minimum wage, employers must pay their employees the higher rate. 

Check out the map below to see minimum wages for 2021. Some states will see an increase on January 1st, some states will see an increase on different dates, some will not see a minimum wage change and other states do not have a minimum wage, therefore they follow the federal minimum wage. 

Source: HR Daily Advisor

Alaska$10.34 (effective January 1)
Arizona$12.15 (effective January 1)
Arkansas$11.00, tipped employees must regularly earn at least $20/month in tips (effective January 1)
California$14.00 with 26 employees or more, $13.00 with 26 employees or less (effective January 1)
Colorado$12.32 (effective January 1)
Connecticut$13.00 (effective August 1)
Florida$8.65 (effective January 1) Increases to $10.00 (effective September 30)
Illinois$11.00 (effective January 1)
Maine$12.15 (effective January 1)
Maryland$11.75 with 15 employees or more, $11.60 with 15 employees or less
Massachusetts$13.50 (effective January 1)
Michigan$9.87 (effective January 1)
Minnesota$10.08 for large employers (annual gross revenue $500,000 or more) $8.21 for small employers (annual gross revenue less than $500,000) (effective January 1)
Montana$8.75 (effective January 1)
Nevada$9.75 for employees without healthcare benefits, $8.75 for employees with healthcare benefits (effective July 1)
New Jersey$12.00 with more than 5 employees, $11.10 for seasonal employees and/or 5 or fewer workers, $10.44 agricultural employers (effective January 1)
New Mexico$10.50 (effective January 1)
Ohio$8.80 for gross receipts of $323,000 or more, $7.25 for gross receipts under $323,000 (effective January 1)
Oregon$14.00 metro area (effective July 1), $12.75 urban counties (effective July 1), $12.00 rural counties (effective July 1)  
Rhode Island$11.50 (effective January 1)
South Dakota$9.45 (effective January 1)
Vermont$11.75 (effective January 1)
Virginia$9.50 (effective May 1)
Washington$13.69 (effective January 1)
6 Steps to Determine What to Pay an Employee

As a small business owner responsible for paying your own salary, you are most likely sensitive to the importance of satisfactory pay for a hard day’s work. You know that compensating your employees fairly and competitively is important to a positive and productive work environment, but how do you go about setting a pay scale?

For most small business owners, it’s not simply a matter of starting an employee at minimum wage. According to small business owners surveyed 81 percent pay above minimum wage and 66 percent support an increase in federal minimum wage.

What to pay an employee is generally based on a candidate’s experience, training and past salary. Use these six steps to determine a pay rate for new employees.

1. Write a job description

A job title isn’t enough. There are a wide range of jobs with the same title, and your small business environment likely requires specific talents and entails certain responsibilities. A clear idea of exactly what the position encompasses is necessary for determining pay. List all of the duties of the job, starting with the most important and moving down to less significant tasks.

2. Consider experience and training

Determine the minimum experience and education necessary for the position. If the job calls for prior training, note how many months/years are required. Also consider education. Does the position require an advanced degree or certification? Generally, the more training and education an employee has, the higher the pay.

3. Check out industry rates

Use your job description to compare industry rates. Do an online search on employment sites and compare pay rates of similar job descriptions in your geographic area. Ask an HR Consultant to benchmark your jobs in the same industry. Note the bottom of the pay scale, the top and the average.

4. Factor in benefits and perks

As best you can, determine the value in dollars of any healthcare coverage and retirement plans you offer, as well as opportunities like flextime, working from home, reduced workweeks and the use of company vehicles.

5. Set a salary range

Using all of the facts you’ve gathered regarding the position, determine a payment range. Start with the lowest salary you discovered for the position and offset that figure by the dollar value of benefits you offer. Then define that category with the lowest required education and training. Repeat the process for the next level.

A resulting starting salary pay scale might look like this:

  • $30,000 salary for 1-3 years of experience and no or limited education
  • $35,000 salary for 4-5 years of experience and a degree
  • $42,000 salary for 5+ years of experience and an advanced degree

6. Be flexible

Be willing to tweak your salary range, if necessary. For instance, if you find an employee who made $2,000 more a year than you’re offering, but the candidate looks especially promising, consider matching that pay, if your budget allows.

Offering potential employees a fair wage sets the stage for a happy work environment that’s bound to inspire productivity and encourage creativity.

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