In the recent past, Connecticut minimum wage has been a regular topic of debate. If you’re a small-business owner, it’s important you’re in the know on current regulations and potential changes so you can plan accordingly.
To make sure you’re up to date, we’ve prepared a guide with must-know details on the minimum wage in Connecticut.
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What is the minimum wage in Connecticut?
Since September 2020, the Connecticut minimum wage is $12 per hour, which is $4.75 higher than the federal minimum wage of $7.25. The minimum wage last increased in 2019, when it was raised from $10.10 to $11.
Some additional Connecticut minimum wage rules apply for specific types of employees, including:
Tipped employees. Employers can take a tip credit for employees, and unlike federal law, Connecticut does not specify a minimum amount of tips to be classified as a “tipped employee.” With a tip credit, employers can pay a lower minimum cash wage, which varies based on employee type. For bartenders, employers must pay a minimum cash wage of $8.23, and the maximum tip credit allowed is 18.5 percent of the applicable minimum wage. For hotel and restaurant employees, employers must pay a minimum cash wage of $6.38, and the maximum tip credit allowed is 36.8 percent of the applicable minimum wage.
Minors under the age of 18, who can be paid 85 percent of the Connecticut minimum wage. Minors working at farms or for the government can be paid this rate indefinitely. For minors employed elsewhere, they can be paid this rate only for their first 200 hours of employment.
Employees considered exempt under the Fair Labor Standards Act (FLSA).
Federal contractor employees, who must be paid a minimum wage of $10.60, effective January 1, 2019.
Keep in mind that some counties, cities, and towns may have their own minimum wage laws. Be sure to check what local wage laws may apply to you.
Will the minimum wage change in 2021?
The Connecticut minimum wage in 2021 will stay at $12 per hour until August 2021, when it changes to $13 per hour for all non-exempt employees.
Are there plans to change the minimum wage beyond 2021?
Yes. The recently passed bill (Minimum Wage Act no. 19-4) means the Connecticut minimum wage increase happens every year. The minimum wage will continue to increase until 2023, when it will reach $15 per hour after increasing by $1 per year.
How should small- business owners prepare for changes to the minimum wage?
It’s smart to plan ahead for the coming changes to the minimum wage in Connecticut. We recommend taking the following measures to ensure you’re prepared:
Reevaluate your staffing plan: Review your monthly sales and overhead costs to see if your current staffing levels are appropriate. Depending on your business model, it may make sense to reduce full-time staff throughout the year, and hire contract employees during your busy seasons.
Hire the right people: The hiring process is time-consuming and expensive. By following best hiring practices, you have a better chance of finding the right fit the first time around, which saves you money in the long run. Once you have your team in place, invest in your employees to keep them engaged.
Upgrade your technology: Save more time and money by streamlining tedious tasks. Learn how to do payroll yourself and the best ways to avoid common payroll mistakes. Square’s small business payroll frees up time for you to focus on issues like staffing and growing your business.
While these are helpful guidelines to follow, to make sure your business is prepared and stays in compliance, you should discuss Connecticut minimum wage laws with your accountant and lawyer.