OLR Bill Analysis

sHB 6208

AN ACT INCREASING THE MINIMUM WAGE.

SUMMARY

This bill increases the state's minimum hourly wage from $10.10 to $11 on January 1, 2018; $12 on January 1, 2019; $13 on January 1, 2020; $14 on January 1, 2021; and $15 on January 1, 2022.

Once the minimum wage reaches $15 in 2022, the bill indexes any future increases to annual increases in the consumer price index (CPI). It requires the labor commissioner to announce, by July 15 each year, an adjustment to the minimum wage equal to the previous year's percentage increase in the CPI for urban wage earners and clerical workers in the northeast urban area of New York-Northern New Jersey-Long Island, NY-NJ-CT-PA, with no seasonal adjustment, as determined by the U.S. Department of Labor's Bureau of Labor Statistics. The new minimum wage, rounded to the nearest five cents, becomes effective on the following January 1.

The bill does not change the “tip credit” allowed by law; thus, it will correspondingly increase the employer's share of minimum wages for hotel and restaurant wait staff and bartenders each year. Under the bill, wages will similarly increase each year for learners, beginners, and people younger than age 18, who by law can be paid at a rate equal to 85% of the minimum wage for their first 200 hours of employment.

EFFECTIVE DATE: October 1, 2017

TIP CREDIT

The law provides a “tip credit” to employers of hotel and restaurant staff and bartenders who customarily receive tips (CGS 31-60). The credit allows employers to count these employees' tips as a percentage of their minimum wage requirement, thus reducing the employer's share of the minimum wage, as long as the tips make up the difference. Because the bill does not change the tip credit percentage, its increases in the minimum wage will raise the amount that employers must pay towards their tipped employees' minimum wage requirements as shown in Tables 1 and 2.

Table 1: Hotel and Restaurant Employees' Tip Credit

Year

Minimum Wage

Tip Credit

(36.8% of minimum wage)

Employer's Share

(difference between minimum wage and tip credit)

2017

(current law)

$10.10

$3.72

$6.38

2018

(the bill)

$11.00

$4.05

$6.95

2019

(the bill)

$12.00

$4.42

$7.58

2020

(the bill)

$13.00

$4.78

$8.22

2021

(the bill)

$14.00

$5.15

$8.85

2022

(the bill)

$15.00

$5.52

$9.48

Table 2: Bartenders' Tip Credit

Year

Minimum Wage

Tip Credit

(18.5% of minimum wage)

Employer's Share

(difference between minimum wage and tip credit)

2017

(current law)

$10.10

$1.87

$8.23

2018

(the bill)

$11.00

$2.04

$8.96

2019

(the bill)

$12.00

$2.22

$9.78

2020

(the bill)

$13.00

$2.41

$10.59

2021

(the bill)

$14.00

$2.59

$11.41

2022

(the bill)

$15.00

$2.78

$12.22

COMMITTEE ACTION

Labor and Public Employees Committee

Joint Favorable

Yea

7

Nay

6

(02/21/2017)