© Seyfarth Shaw LLP 2025 Employment Laws on the Horizon | 11 Wage & Expense, etc. upon an employee’s separation of employment, a record of all pay stubs for the past year. Employers must document this offer in writing, noting (1)the date the offer was made; and (2) the employee’s response. (S.B. 3208) Tip Credit Chicago, IL (Eff. 7/1/24 with Rolling Deadlines) – Chicago is phasing out the tip minimum wage, annually reducing the percentage of an employees pay that comes from tips over 5 years. Until July 1, 2024, tips may not account for more than 40% of an employee’s pay. Each year after, the tips may not account for more than 32%, 24%, 16%, and 8% of their pay. On and after July 1, 2028, employers may not account for tips when calculating employee pay and must pay each covered employee the applicable minimum wage. (Ord. SO2023-2995) MI (Eff. 2/21/25 with Rolling Deadlines) – Beginning February 21, 2025, MI will annually increase the tip minimum wage until it is fully phased out. On February 21, 2025, the tipped minimum wage will be $5.99 (48% of min. wage). On February 21st of each year thereafter, the tip min. wage will increase based on a percentage of min. wage: $7.97 (60%) in 2026, $9.91 (70%) in 2027, $11.97 (80%) in 2028, and 90% of the TBD min. wage in 2029. Beginning February 21, 2030, the tip minimum wage will no longer exist. (Mothering Justice v. Attorney General) ME (Eff. 1/1/25) – An employee must customarily and regularly receive more than $185 per month in tips (up from $179) to qualify as a service employee. (Announcement) Flagstaff, AZ (Eff. 1/1/26) – The tipped minimum will be phased out and minimum wage will be based on the Consumer Price Index. (Rates) Wage Deductions CO (Eff. 1/1/25) – The CO Wage & Hour Rights and Responsibilities poster must be posted, which includes information on wage deductions. (Poster) Wage Theft CA (Eff. 1/1/25) – The Freelance Workers Protection Act requires freelance workers to be paid on or before the agreed upon date, or if no date is provided then 30 days after the completion of the work. (S.B. 988) Minimum Wage, Tip Credit, and Minimum Earnings for Exempt Status Revisions Effective January 1, 2025 unless otherwise noted; Most jurisdictions publish an updated poster not linked below. Jurisdiction See counsel for coverage exceptions Gen. Min. Wage Min. Cash Wage Max. Tip Credit Min. Earnings for Exempt Status Federal $7.25 $2.13 $5.12 $684/week or $35,568/year Alaska Effective 7/1/25 $11.91 N/A $0 $952.80/week or $49,545.60/year $1,040/week or $54,080/year Arizona Flagstaff Tucson $14.70 $17.85 $15.00 $11.70 $16.85 $12.00 $3 $1 $3 N/A
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