STATE LABOR & MINIMUM WAGE
- Quick Updates:
- The minimum wage will rise in 22 states, including Arkansas, Arizona, California, Colorado, Missouri, New Mexico and Washington. Nearly 7 million workers will kick off 2020 with higher pay, due to voters or lawmakers pushing the minimum higher or, in seven states, an annual automatic adjustment tied to inflation.
- Three additional states – Connecticut, Nevada and Oregon – and Washington, D.C., will boost theirs later in 2020, and a national effort is underway led by groups such as Business for a Fair Minimum Wage and the National Employment Law Project to gradually raise the federal minimum wage to $15/hour by the middle of the new decade.
- Workers in New Jersey, California, Washington, and Washington, D.C., will gain or gain more paid family and medical leave in 2020. Currently, only the District and eight states offer paid family-leave programs, though lawmakers in New Hampshire, Nebraska and Vermont are exploring similar proposals.
- Minimum wage to increase in more than 20 states in 2020: The minimum wage in more than 20 states and 26 cities and counties across the United States will increase starting on Jan. 1, affecting more than half of the country's population and marking the greatest jurisdictional raise in U.S. history. "Next year's increase is … going to be seen as the highest number of minimum wage increases of any time," Yannet Lathrop, a researcher at the National Employment Law Project (NELP), told ABC News. Of the states and municipalities increasing their minimum wage, 17 will hit or surpass $15 an hour. Later next year, four more states and 23 more municipalities will raise their wage floors as well, according to NELP. Those living and working in the state of Illinois and and the city of Saint Paul, Minnesota, will see their salaries increase twice in the new year. Among the cities that have agreed to raise the minimum wage to $15 per hour are Seattle and Petaluma, California, and New York City. Seattle and Petaluma will maintain lower wage floors for smaller businesses, while New York City will require all businesses to pay workers $15 per hour. Read the full article at ABC News.
- New Hampshire Senate Votes More Study on Minimum Wage Bill: The New Hampshire Senate on Wednesday shelved a bill to establish and then gradually increase the minimum wage but the debate will continue. The state currently defaults to the federal minimum wage of $7.25. Lawmakers last year approved the creation of a state minimum wage of $10 this year and $12 in 2022, but Republican Gov. Chris Sununu vetoed it. On Wednesday, the Senate voted to further study a similar House bill it had held from last year. But Democrats plan to continue pushing the issue, arguing that they have a better shot given that the minimum wage just increased in three other New England states.
- Tennessee to offer state workers 12 weeks paid family leave: Tennessee Gov. Bill Lee announced a plan Tuesday to offer up to 12 weeks of annual paid family leave for state workers who are experiencing a variety of life events, including parental leave for the birth of a child, adoption or foster care, and care for a sick family member. “Strong families make for strong communities, and I am proud that Tennessee will lead the nation in supporting our employees,” said Gov. Lee. “This is an impactful investment in the state workforce and will allow us to continue to attract and retain the best workforce possible.” The Republican's administration said the benefits will help reduce turnover rates for state employees and assist the state in saving on health care costs, without requiring additional state money. Read more at Fox17.
- New York State May Be the First to Pass a New Paid Leave Law in 2020: In Wednesday’s State of the State, Governor Andrew Cuomo proposed legislation that would require private employers to provide sick leave to their workers. Under his proposal, employers with five to 99 employees would be required to provide at least five days of job-protected paid sick leave per year and employers with 100 or more employees would be required to provide at least 7 days of paid sick leave per year. Small businesses with 4 or fewer employees would be required to provide 5 days of unpaid sick leave. A similar sick leave law has been in effect for New York City employers since 2014 and for Westchester County employers since April 2019. Read more in the National Law Review.
STATE TAX UPDATE
- Bloomberg Government: Cuomo Proposes N.Y. Tax Cuts for Small Businesses, Farmers: New York small businesses would get their corporate tax rate cut almost in half, and farmers would see better tax treatment under new proposals by Gov. Andrew M. Cuomo (D). The plans for small businesses and farmers were among the features of Cuomo’s Jan. 8 State of the State address, which also included proposals for the legislature to take another shot at legalizing marijuana—with an estimated eventual revenue payoff of $300 million—and to institute “green tax credits” for environmental-related job creation and capital investments. Cuomo touted what he called “the lowest middle class tax rate since 1947, the lowest manufacturers tax rate since 1917, and the lowest corporate tax rate since 1968” in the state under his tenure, which began in 2011. He also took credit for last year’s action to make permanent a 2% statewide property tax cap begun in 2012, which he said has saved taxpayers $45.6 billion since then.
- U-Haul Names Top Growth States of 2019, Florida is New No. 1 Florida welcomed more than sunshine and tourists in 2019. It greeted the largest number of U-Haul® moving trucks entering its borders versus exiting them, establishing a new No. 1 growth state for the first time in four years. Florida, which ranked second to Texas from 2016-18, bested the Lone Star State for growth this past year, according to U-Haul data analyzing U.S. migration trends for 2019. Texas inched back one spot to No. 2 while continuing its strong run of procuring do-it-yourself movers. North Carolina, South Carolina and Washington round out the top five growth states for 2019. California ranked 49th, and Illinois was 50th for the fourth time in five years, pacing the out-migration states with the largest net losses of U-Haul trucks crossing their borders. Growth States are calculated by the net gain of one-way U-Haul trucks entering a state versus leaving that state during a calendar year. Migration trends data is compiled from more than 2 million one-way U-Haul truck-sharing transactions that occur annually. Read the full article at PR Newswire
- Tax Foundation Reports - Tax Trends at the Dawn of 2020:
- State tax changes are not made in a vacuum. States often adopt policies after watching peers address similar issues. Several notable trends in tax policy have emerged across states in recent years, and policymakers can benefit from taking note of these developments.
- The enactment of the federal Tax Cuts and Jobs Act (TCJA) in late 2017 expanded many states’ tax bases and drove deliberations on tax conformity. By the end of 2019, all but four states with individual or corporate income taxes (or, in the case of Texas, a gross receipts tax that relies on federal definitions) updated their conformity date to reflect a post-TCJA version of the Internal Revenue Code.
- Many states incorporate the new federal tax on Global Intangible Low-Taxed Income (GILTI) by default, which often positions them to meaningfully tax international income for the first time and, in many cases, raises serious constitutional questions. In 2018, few states had issued guidance on their approach to GILTI, but by the end of 2019, 17 states taxed GILTI and had issued guidance to that effect, and another seven states and the District of Columbia may tax GILTI but have yet to offer guidance to taxpayers.
- Five states cut corporate income taxes in 2019, and another two have reductions effective on, or which will be backdated to, January 1, 2020.
- Six states cut individual income tax rates in 2019, three of them retroactive to 2018 and designed as a response to the base-broadening provisions of the TCJA.
- Read more here at the Tax Foundation.