© 2022 American Payroll Institute, Inc. State Minimum Wage Rate Changes Effective July 1 Many states and the District of Columbia have enacted their own minimum wage laws in the absence of legislation to increase the federal minimum wage ($7.25 an hour). Several states have minimum wage rates that will take effect July 1 (this updates APA’s Guide to State Payroll Laws, §1.1). Local minimum wage increases that take effect July 1 will be covered in a future issue of PAYSTATE UPDATE. Remember changes to minimum wage rates can impact state white collar exemption salary thresholds and state garnishment limits (see APA’s Guide to State Payroll Laws, §§1.3 State White Collar Overtime Exemption Rules and 7.1 Creditor Garnishment Withholding Rules). State white collar exemption issues. Changes in a state or local minimum wage rate can impact state garnishment limits in states that calculate exemptions based on state or local minimum wage rates. In Oregon, the July 1 minimum wage increase means an increase in white collar overtime exemption salary thresholds to $590 per week (Portland metro currently $560), $540 per week (standard currently $510), and $500 per week (nonurban counties currently $480). Even though these threshold amounts will continue to be lower than the federal threshold amount of $684 per week, remember the state duties’ tests might be more favorable for some employees, which means those employees must be paid overtime under state law even if they are exempt from overtime under federal requirements. Also remember many state minimum wage laws exempt white collar employees (i.e., administrative, executive, professional, and outside sales employees) from state overtime requirements but not from state minimum wage requirements. In those states (e.g., Nevada) certain employees might be exempt from overtime but still must be paid at least the minimum wage for every hour worked in a workweek. State garnishment limit increases. Although many state garnishment laws tie limitations on the amount that can be garnished from an employee’s paycheck to the federal minimum wage, similar to the federal Consumer Credit Protection Act (CCPA), some states base the amount on the state or even the local minimum wage rate. Mid-year minimum wage increases will change garnishment limits in Connecticut and the District of Columbia. In California, local minimum wage increases (where applicable) affect garnishment limits and must be applied in parts of California without a local minimum wage, the state minimum wage rates for large and small employers apply. Many California local minimum wage rates will be increasing July 1. Effective July 1, 2022, in Connecticut, the maximum aggregate weekly earnings that can be subject to garnishment will be: (1) 25% of weekly disposable earnings or (2) the amount by which disposable earnings for that week exceed 40 times the higher of (a) the federal minimum wage or (b) the state minimum wage (effective July 1, 2022, $14 per hour). Effective July 1, 2022, in the District of Columbia, the maximum aggregate weekly earnings that can be subject to garnishment will be the lesser of: (1) 25% of weekly disposable earnings or (2) the amount by which disposable earnings for that week exceed 40 times the D.C. minimum wage (effective July 1, 2022, $16.10). The following chart provides state minimum wage rates and tip credit amounts that will change mid-year. The changes are effective July 1, 2022, unless indicated otherwise. State Minimum Wage Increases Effective July 1, 2022 State/Territory Minimum Wage Prior to July 1 Minimum Wage Eff. July 1, 2022 Tip Credit Prior to July 1 Tip Credit Eff. July 1, 2022 Connecticut $13.00 $14.00 $6.62 service employees $7.62 service employees $4.77 bartenders $5.77 bartenders District of Columbia $15.20 $16.10 $10.15 $10.75 Florida $10.00 $11.00 *eff. 9-30-22 $3.02 $3.02* *eff. 9-30-22 Nevada $9.75 no health benefits $10.50 no health benefits prohibited $8.75 health benefits $9.50 health benefits June 27, 2022 Volume 24 Issue 13
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