Ring in the New Year With a New Minimum Wage

12.28.20Baylee Davies

Ring in the New Year With a New Minimum Wage

The New Year is around the corner and now is the time to ensure employers are prepared for the new Minimum Wage in their states and cities. Many of the new laws for 2021 made for big stories and you can read more about the ones in California here.  However, there is still more to do as over half the new requirements are related to Minimum Wage increases.

Minimum Wage Increases

(effective on January 1, 2021, for non-exempt employees)

State and/or CityNew Minimum Wage
Arizona – State$12.15
California – State:  Large Employers (26 +)$14.00
California – State:  Small Employers (25 or less)$13.00
California – Cities
 Daly City$15.00
 El Cerrito$15.61
 Half Moon Bay$15.00
 Hayward: Large Employers$15.00
 Hayward: Small Employers$14.00
 Los Altos$15.65
 Menlo Park$15.25
 Mountain View$16.30
 Novato: 100+ employees$15.24
 Novato:  26 – 99 employees$15.00
 Novato:  25 or less employees$14.00
 Palo Alto$15.65
 Redwood City$15.62
 San Carlos$15.24
 San Diego$14.00
 San Jose$15.45
 San Mateo$15.62
 Santa Clara$15.65
 Santa Rosa$15.20
 Sonoma: Large Employers$15.00
 Sonoma: Small Employers$14.00
 South San Francisco$15.24
 San Jose$15.45
Colorado – State$12.32
Colorado – Denver$14.77
Maryland: 15+ employees$11.75
Maryland: 14 or less employees$11.60
Minnesota: $500K Gross$10.08
Minnesota: less than $500K gross and certain hotels$8.21
Nevada – No Health Benefits offered$9.75
Nevada – Health Benefits offered$8.75
New Jersey$12.00
New Mexico$10.50
New York$12.50
New York – Non-NYC Fast Food$14.50
New York – Nassau, Suffolk and Westchester$14.00
South Dakota$9.45
Seattle: 501+ employees$16.69
Seattle: 500 or fewer employees$15.00
Seattle: 500 or less Min. Hourly Compensation (can include tips, commission, health benefits, etc.)$16.69

Note: Some states and cities may not have released their new Minimum Wage Rates for Jan 1, 2021, at the time of this writing. Please check with us if you have any questions about your area’s Minimum Wage Rate. There are other states and cities that have passed new Minimum Wage Rates but they do not become effective until later in 2021, normally on July 1st.

Minimum Salaries for Exempt Employees

Employees who are paid as an Exempt Employee must meet the minimum standards under the Fair Labor Standards Act (FLSA) and several state laws. This includes not only a Job Duties test but a minimum salary requirement. 

For more information, if your exempt employees meet both the Job Duties test and the minimum salary for your state, contact us! We can help assess if your employees are classified correctly.

Minimum Requirements for Exempt Employees

(per state that are effective January 1, 2021)

Minimum Annual SalaryMinimum Annual Salary
Federal Law (no change for 2021)$35,568
California: 26+ employees$58,240
California: 25 or fewer employees$54,080
New York$48,750
New York: Nassau, Suffolk and Westchester$54,600
Washington: 51+ employees$49,831.60
Washington: 50 or fewer employees$42,712.80

Computer Professionals Minimum Pay Increases

The FLSA requires all employers to pay computer professionals a minimum of $27.63 per hour in order for them to be exempt from overtime. Some state’s pay rates for exempt computer professionals are higher than the FLSA rate and the minimum salaries listed above for other exempt employees.  The states below will increase on January 1, 2021, for exempt computer professionals.

  • California:  Minimum hourly rate will increase to $47.48 per hour.
  • Colorado: Employees in highly technical computer-related occupations must receive at least the lesser of the applicable salary noted above or at least $28.38 per hour.
  • Washington: Minimum hourly rate will increase to $47.92 per hour.

California Minimum Wage for Commissioned Inside Salespeople

California’s increased minimum wage will also impact commissioned inside salespeople. Under California law, commissioned inside salespeople are exempt from the state’s overtime laws if the employee earns more than 1.5 times the state minimum wage and more than half of the employee’s compensation represents commission earnings.

Therefore commissioned inside salespeople will need to earn more than $21 per hour (26 or more employees) or $19.50 per hour (25 or fewer employees).

About the Author

Traci Hagan, “Treasure Trove”

Traci is an HR Consultant who has been with SDHRC for over 5 years but has over 35 years of experience in employee relations, conflict resolution benefits administration, training and development, workers’ comp, and staffing. Traci’s experiences encompass multi-organizational and cross-cultural issues which allow her to expertly charter the waters of complex problems and where she thrives by discovering and providing solutions for smoother sailing.