$15 Min Wage for State Employees Gains Traction

$15 Min Wage for State Employees Gains Traction

As the $15 minimum wage went into effect Sunday for federal employees, a few states have approved or are considering proposals to pay state employees that same wage floor, a trend attorney said could impact private sector wages.

On Wednesday, Florida Senate President Wilton Simpson, a republican, proposed the minimum wage for Sunshine State employees to $15 an hour. A day earlier, Pennsylvania Gov. Tom Wolf, a democrat, set the same wage floor for commonwealth employees through an executive order amendment.

Democratic lawmakers in New Mexico introduced two bills in January calling for a $15 minimum wage for state employees. The same wage floor is set to be approved in Missouri, by Republican Gov. Mike Parson before Feb. 1.

And Maine Gov. Janet Mills and Colorado Gov. Jared Polis, both Democrats, each recently agreed to a $15 minimum wage for state workers during union negotiations.

Attorneys said the increases for state employees could affect the private sector, especially as federal employees also see their wages increase.

"If states raise the minimum wage rate of pay for state employees, it will definitely have an impact on private employers," said Daniel Stern of management-side firm Dykema Gossett PLLC.

Here, Law360 looks at the minimum wage increases or proposed raises for state employees.

A Half-Dozen States Eyeing Increases

Multiple states in recent months have approved increases to a $15 minimum wage for their employees.

On Jan. 25, Wolf amended Executive Order 2016-02 that in 2018 had set a $15 minimum wage for Pennsylvania employees by 2024. The new amendment accelerated that timeline so the $15 rate would go into effect Jan. 31.

"Increases in the minimum wage raise employee morale, productivity and work quality, while lowering turnover and training costs," Wolf said in a statement. He pointed out in the statement that Pennsylvania is one of 20 states with no minimum wage above the federal hourly floor of $7.25.

The governors of Maine and Colorado also recently approved a $15 minimum wage, during contract negotiations with unions representing state workers.

Mills agreed to the increase in October in talks with the Maine Service Employees Association Local 1989 of the Service Employees International Union, which represents the vast majority of workers in the Pine Tree State. The statewide minimum wage is $12.75 an hour.

The $15 rate went into effect in mid-December and affected about 500 union workers, said Alec Maybarduk, executive director of MSEA-SEIU.

"It's the difference to being able to afford safe housing for themselves and their children," Maybarduk said. "It is the ability to just survive in America."

Colorado state employees also secured a $15 provision in November, a boost from the statewide minimum wage of $12.56.

The governor approved the rate in negotiations with Colorado Workers for Innovative and New Solutions. The rate would apply to all covered state employees, even those who aren't members of the union.

The state Legislature is now deliberating the contract provisions as part of the governor's budget request.

State legislators elsewhere are also considering increases.

Legislators in Missouri, where the statewide hourly minimum wage is $11.15, are debating a proposal for a $15 minimum wage for state employees in a supplemental budget request by the governor. Parson has said the increase could combat high employee turnover and vacancy rates, and he had set a Feb. 1 goal for approval.

In New Mexico and Florida, state lawmakers have put forward their own proposals for $15 wage floors.

A proposal Simpson announced would grant the $15 minimum wage for state workers by October. The funding would be included in the state Senate's budget.

The Sunshine State currently guarantees all workers $10 an hour, and an increase to $15 is scheduled for 2026.

And in New Mexico, state Sens. Antoinette Sedillo Lopez, Peter Wirth and Linda M. Lopez on Jan. 19 introduced Senate Bill 7, which calls for a $15 minimum wage for state employees and state contract workers effective July 1. The statewide minimum wage there is $11.50 an hour.

On Jan. 20, state Sens. George K. Munoz and Michael Padilla also introduced legislation, Senate Bill 125, which proposes the $15 minimum wage for state employees effective in July.

Munoz said his bill would enable New Mexico to compete for workers as many private sector employers are paying above minimum wage, while the state government workforce has thousands of vacancies.

"In the labor market, we know that we're not competitive," Munoz told Law360. "The competitive market in the labor pool has increased over the last year and a half, and so we need to make sure that we have employees in the state ... the labor market has shifted, and we need to adjust."

Responding to the Great Recession and 'Great Resignation'

The state employee minimum wage boosts or proposed boosts come as workers nationally are quitting jobs and employers have lots of openings, a trend widely referred to as the "Great Resignation."

The state efforts also come as the Biden administration is increasing minimum wage for federal employees to $15 an hour. The administration announced the move on Jan. 21, and the policy took effect on Sunday and affects 67,000 workers.

Public sector employees have seen pay gains over the past year. State and local government workers' wages and salaries in December were up 2.6% over the previous 12 months, according to U.S. Department of Labor data.

A $15 minimum wage for state employees is not without precedent. New York in 2016 said it would set that wage floor for its workers by 2021, and North Carolina approved that minimum wage for its employees in 2018.

The Biden administration and state politicians have said the increases are to attract and retain workers in the competitive labor market.

But the latest increases or proposed increases also reflect states' efforts to make up for cuts amid the Great Recession, said Richard Auxier, senior policy associate at the Urban-Brookings Tax Policy Center. That financial crisis lasted from about 2007 to 2009.

"We're currently dealing with the fiscal ramifications of the pandemic, but states were dealing with the fiscal ramifications of the Great Recession basically right up until the pandemic," Auxier said. "In a lot of states, their ability to both hire workers and their ability to pay those workers was on hold and at best sluggish for the entire past decade."

Maybarduk, from the Maine union, also said the current increases come after a decade of cuts following the Great Recession.

"They refused to give raises that kept up with the cost of living for nearly a decade, they cut funded health care plans, they cut pensions, they cut back on positions and just really hampered government's ability to do its job," Maybarduk said. "Workers across the country are starting to realize the value that they've had all along."

Private Sector Could Feel Pressure

Attorneys previously said they expected that the federal employee minimum wage boost would compel private sector employers to raise their own wage floors. Attorneys now say increases for state employees could add to that pressure.

"The numbers of people affected are increasing," said Dykema's Stern.

Stern said the increases could be more significant in communities with high numbers of public employees, such as areas with large state university systems.

"In a place like that, they raise the minimum wage, it's definitely going to have an impact," Stern said.

Shannon Meade, executive director of management-side firm Littler Mendelson's Workplace Policy Institute, said state employee minimum wage increases will differ based on where the employees are located.

"It depends on that locality and that jurisdiction," Meade said. "What happens in Dothan, Alabama, is quite different from what would happen in New York City."

Minimum wage increases could cause wage-and-hour concerns, such as if employers force workers to do off-the-clock work to make up for the higher pay, attorneys said.

"It's a step in the right direction," said Kevin Cole of KJC Law Group APC, who has represented federal employees in wage suits. "But obviously as lawyers we'll still want to make sure that people are getting compensated at the right rate."

Besides pressuring private sector employers to raise wages to compete with governments for workers, the public sector increases could also contribute to an overall acceptance of a $15 wage floor, workers' attorneys said.

"This all has the potential of creating a public perception that $15 should be the absolute minimum that someone should be paid for giving their labor," said Michael Morrison of Alexander Morrison & Fehr LLP, who has represented federal employees. "Like the changes at the federal level, these changes at the state level help build momentum for a universal $15 minimum wage."

Sally Abrahamson of worker-side firm Werman Salas PC also said the state increases could normalize a $15 wage floor.

"The more you can make it the norm that people have jobs where they can earn $15 an hour, the more you're going to see that across the board," Abrahamson said. "People who want to attract workers, and they know workers have options for better-paying jobs, are going to increase their wages."

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