Minimum Wage Inching Upward
Next January, over 20 states are expected to increase their minimum wage rates for the coming year. Some states up their minimum wage rates by implementing an adjustment based on the annual increase in the cost of living. Other states follow a schedule of legislatively established minimum wage rate increases over a period of years. After much debate, this month New Mexico joined the minimum wage movement approving a series of incremental minimum wage increases beginning January 1, 2020 and continuing through January 1, 2023.
It’s a long-awaited change for New Mexico’s low wage workers and a challenge for the business community. Indeed, most stakeholders seem to agree that the increase in New Mexico’s minimum wage rate is timely. New Mexico’s current minimum wage rate, $7.50 per hour, has been in effect since 2009. However, passing the minimum wage bill (SB 437) was still a challenge for New Mexico lawmakers. At issue was how much and when top dollar would be reached, inflation indexing, and tipped employee sub-minimum wage rates. Lawmakers successfully brokered a compromise on these issues and New Mexico Governor Lujan Grisham signed the law on April 1, 2019.
Under the law, the minimum wage rate will increase as follows:
- prior to January 1, 2020 – $7.50 per hour
- January 1, 2020 – $9.00 per hour
- January 1, 2021 – $10.50 per hour
- January 1, 2022 – $11.50 per hour
- January 1, 2023 – $12.00 per hour
The tipped minimum wage rate is as follows:
- prior to January 1, 2020 – $2.13 per hour
- January 1, 2020 – $2.35 per hour
- January 1, 2021 – $2.55 per hour
- January 1, 2022 – $2.80 per hour
- January 1, 2023 – $3.00 per hour
The bill also includes a lower minimum wage of $8.50 per hour for high school students. A provision that would have indexed the minimum wage rate to inflation was dropped in the compromise. New Mexico’s Minimum Wage Law was also amended to include domestic workers within the meaning of covered “employees” effective June 14, 2019.
Other New Mexico Legislative Changes
This year, in addition to the minimum wage increase New Mexico enacted other legislation affecting employees’ rights and employers’ obligations.
- Conviction history law (SB 96) prohibits a private employer from making an inquiry regarding an applicant’s history of arrest or conviction on a job application. An employer may take into consideration an applicant’s conviction after review of the applicant’s application and upon discussion of employment with the applicant.
- Public and Private Caregiver Leave Acts (SB 123) require employers to provide employees who have accrued paid sick leave with the opportunity to use sick leave to care for sick family members.
- Human Rights Act amended (SB 227) to include sexual orientation and gender identity among the classes protected from unlawful discrimination by all employers.
Each of these laws are effective June 14, 2019.
What’s next?
Employers have the better part of the year to review payroll practices and plan for the next minimum wage increase. Employers can also expect the state to release a new Minimum Wage posting that they will be required to display by January 1, 2020. Employers must begin implementing the changes made by the other pieces of legislation described above two months from now.
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