RI Approves 2019 Minimum Wage Increase
posted Dec 20, 2018 by Norman LeBlanc, CPA in the Business Blog
The minimum wage in the Ocean State will increase to $10.50 per hour on January 1, 2019. 19 other states including Massachusetts are also increasing their minimum wages effective 2019. Employers should prepare for this upcoming change by analyzing how the increase will affect their budgets and forecasts.
- Minimum wage for 2019: $10.50/hour (up from $10.10 in 2018 and $9.60 in 2017)
- Tipped employee rate for 2019: $3.89/hour
- The maximum FICA tip credit for 2019: $6.61 (difference between minimum wage and tip wage)
Wait, what is the FICA tip credit? The minimum wage allowable in RI for those occupations earning tips is $3.89 per hour. As such, waiters, waitresses and bartenders can be paid that minimum rate as long as their tips received brings them to the minimum wage of $10.50 per hour, otherwise the employer must make up the shortage.
What about overtime rates?
Federal and RI law requires payment of 1.5 times the regular wage rate for any hours worked in excess of 40.
For tipped employees in 2019 it would be ($10.50 x 1.5) minus the tip credit ($6.61) so $9.14/hour.
More about this increase
The Rhode Island Hospitality Association, in conjunction with the RI Business Coalition advocated in 2017 for the increase, proposing a two year phase-in at $0.50 per year (citing the business community’s need for time to adjust). Hence last year, minimum wage rose from $9.60 to $10.10, and finally to $10.50 in 2019.
Questions on the 2019 rates? Please contact us.