In his 2013 State of the Union address, President Barack Obama suggested raising the federal minimum wage to $9.00 per hour.  Connecticut lawmakers were unwilling to wait for Congress to act (or not to act) on the President’s proposition and passed a measure that will raise the state minimum wage from $8.25 per hour to $9.00. 

The 9 percent increase does not take effect overnight; it was phased out over two years.  The state minimum wage will rise to $8.70 on January 1, 2014, and then leap to $9.00 a year later on January 1, 2015.  Still, employers who are paying employees less than $9.00 per hour will need to prepare for the future.

State lawmakers did throw a small bone to employers of hotel and restaurant staff and bartenders.  These employers are allowed to “credit” tips earned by these workers against minimum wage requirements.   State law currently allows employers to take an 11 percent tip credit for bartenders and a 31 percent tip credit for hotel and restaurant employees, as long as the tips bump their hourly earnings above $8.00 per hour.   This means employers must pay bartenders at least $7.34 per hour and hotel and restaurant employees $5.69.  The minimum wage bill increases the “tip credit” percentages, which allows employers to continue to pay these employees their current minimum wage.  Tip credits can be a headache for employers in the service industry, particularly trying to figure out which employees qualify for the credit.  Check out the Connecticut Department of Labor’s guidance on gratuities for more information.