Employers in every Western Growers-represented state should begin preparing now to pay higher minimum wage and H-2A wage rates beginning next year.
On January 1, 2020, the California minimum wage is set to increase to $13.00 per hour, up from $12 per hour, for employers with 26 or more employees. The rate will rise to $12 for employers with 25 employees or fewer. By 2023, the minimum wage will go up to $15 statewide, regardless of how many employees a company has.
The minimum salary under the white-collar overtime exemption test is two times the state minimum wage or $54,080 for employers with 26 or more employees and $49,920 for employers with 25 or fewer employees.
The minimum wage rate for H-2A workers and domestic workers in “corresponding employment,” that is the Adverse Effect Wage Rate (AEWR) is expected to rise to $14.77 on January 1, up from $13.92 based on FY 2019 Farm Labor Survey data. Look for the new AEWR to be officially published in the Federal Register in the coming weeks.
Keep in mind that a number of cities and counties in California have scheduled local minimum wage increases that are higher than the state’s beginning January 2020, while others have minimum wage increases scheduled for the summer of 2020. Moreover, some cities impose their local minimum wage obligations even if an employee spends minimal time in the city. For example, the City of Los Angeles defines “employee” as any individual who in any particular week performs at least two (2) hours of work within the geographic boundaries of the City for any Employer, and is thus entitled to earn the California minimum wage. Employers with drivers and other employees who spend minimal time in a city with a higher minimum wage should consider whether they are in compliance with these local laws.
Arizona’s minimum wage is set to increase to $12 per hour on January 1, up from $11. The City of Flagstaff has a local minimum wage that goes up to $13.00 per hour in January. The AEWR for 2020 is expected to rise to $12.91, up from $12.
The minimum wage for Colorado will be $12 per hour, effective January 1, 2020. State law previously blocked local governments from enacting their own minimum-wage laws, but that changed when Gov. Jared Polis signed House Bill 1210. The new law gives cities and counties permission to set their own minimum wages starting in 2020, but the new wages will not take effect until January 2021.
The AEWR for Colorado is expected to hit $14.26 per hour on January 1, up from $13.13 in 2019. This represents an 8.6% increase, on top of the 22% increase the state absorbed last year.
Gov. Michelle Lujan Grisham signed legislation last April raising the state’s minimum wage for the first time in a decade from $7.50 per hour to $12 by 2023. The first increase to $9.00 per hour goes into effect January 1, 2020. New Mexico’s AEWR is expected to hit $12.91, up from $12.
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Employers should consider reviewing internal policies in preparation for the scheduled jumps. In addition, employers should ensure that their minimum wage notices and posters are compliant with the latest posting requirements ahead of the January 1 increases.