© 2024 American Payroll Institute, Inc.
September 2, 2024 Volume 26 Issue 17
Learn More About Upcoming State Ballot Initiatives Affecting Payroll
As election day approaches, several states have voter-
proposed ballot initiatives that may affect payroll if
passed. Alaska, Arizona, California, Massachusetts, Missouri,
Nebraska, and Washington have ballot proposals that have
been certified to appear on the general ballot for the state.
The ballot proposals cover minimum wage increases, tip
credit changes, paid sick leave (PSL) benefits, and opting out
of long-term care. Oklahoma also has a ballot proposal that
has could increase the state minimum wage, but the initiative
has not yet been certified to appear on the ballot.
Alaska
Minimum wage. Ballot Measure No. 1 will propose
annual increases to the state minimum wage beginning in
2025. If passed, the minimum wage will increase on July 1,
2025, to $13 per hour from $11.73. The minimum wage would
further increase on July 1 of subsequent years: effective July
1, 2026, $14 per hour and effective July 1, 2027, $15 per
hour. Beginning January 1, 2028, the wage will be adjusted
annually for inflation [Division of Elections, Ballot Measure
No. 1].
Paid sick leave. Ballot Measure No. 1 will also propose
the creation of PSL for Alaska employees. Employees would
accrue a minimum of 1 hour of PSL for every 30 hours of work.
Employers with 15 or more employees would have to allow
employees to accrue up to 56 hours of PSL a year. Employers
with 14 or fewer employees would only have to allow accrual
of up to 40 hours per year. If passed, employees would begin
accruing PSL effective July 1, 2025.
Paid sick leave would be available for the employee or
their family member’s need for leave related to mental or
physical illness, injury, or health condition preventative
care or need related to domestic violence, sexual assault, or
stalking [Division of Elections, Ballot Measure No. 1].
Arizona
Tip credit amendment. Proposition 138 will ask voters
whether the tip credit for employees who receive gratuities
should be 25% of the minimum wage (see PAYSTATE UPDATE,
Issue 15, Vol. 26). To take the tip credit, the employer would
have to establish that the employee received at least the
minimum wage plus $2 per hour. The current minimum
wage is $14.35 per hour, adjusted annually for inflation. For
an employer to take a tip credit, the employee would need
to receive at least $16.35 per hour. The minimum cash wage
would be $10.77 per hour, the tip credit would be $3.58 per
hour. Currently, the tip credit is $3 per hour [Secretary of
State, Proposition 138, 7-31-24].
California
Minimum wage increase. Proposition 32 will seek
to raise the state minimum wage annually. Currently, the
minimum wage is subject to annual increases for inflation.
The minimum wage increases initially would be divided
based on employer size. If passed, the minimum wage in
2025 for employers with 26 or more employees will be $18
per hour, up from $16. The minimum wage for employers
with 25 or fewer employees would be $17 per hour, up from
$16. In 2026, the minimum wage for all employers regardless
of size would be $18 per hour. Starting in 2027, the minimum
wage would continue to be adjusted annually for inflation
[Legislative Analyst’s Office, Proposition 32].
Massachusetts
Tip credit decrease. Ballot Initiative No. 23-12 would
gradually decrease and eventually eliminate the state tip
credit. If passed, the tip credit would decrease along the
following schedule. Effective January 1, 2025, the tip credit
would decrease to 36% of the minimum wage from $8.25
(i.e., 55% currently) effective January 1, 2026, 27% of the
minimum wage effective January 1, 2027, 18% of the
minimum wage and effective January 1, 2029, the tip credit
would be eliminated [Office of the Attorney General, Ballot
Initiative 23-12].
Missouri
Minimum wage. Proposition A would increase the state
minimum wage. If passed, the minimum wage will increase
along the following schedule. Effective January 1, 2025, the
minimum wage would increase to $13.75 per hour, up from
$12.30 effective January 1, 2026, $15 per hour and effective
January 1, 2027, the minimum wage would increase or
decrease annually for inflation [Secretary of State, Proposition
A, 1-9-23].
Paid sick leave. Proposition A also proposes the creation
of a state PSL law. Employees would accrue 1 hour of PSL
for every 30 hours worked. For employers with 15 or more
employees, employees could accrue up to 56 hours a year.
For employers with 14 or fewer employees, employees
could accrue up to 40 hours a year. Employees would begin
accruing PSL on May 1, 2025.
PSL could be used for leave related to an employee or
their family member’s mental or physical illness, injury, or
health condition preventative care public health emergency
or need for leave related to domestic violence, sexual assault,
or stalking [Secretary of State, Proposition A, 1-9-23].
Nebraska
Paid sick leave. A voter-initiated petition will appear on
the ballot to propose the creation of a state PSL law, known
as the Nebraska Healthy Families and Workplace Act. Under
the act, employees would accrue 1 hour of PSL for every 30
September 2, 2024 Volume 26 Issue 17
Learn More About Upcoming State Ballot Initiatives Affecting Payroll
As election day approaches, several states have voter-
proposed ballot initiatives that may affect payroll if
passed. Alaska, Arizona, California, Massachusetts, Missouri,
Nebraska, and Washington have ballot proposals that have
been certified to appear on the general ballot for the state.
The ballot proposals cover minimum wage increases, tip
credit changes, paid sick leave (PSL) benefits, and opting out
of long-term care. Oklahoma also has a ballot proposal that
has could increase the state minimum wage, but the initiative
has not yet been certified to appear on the ballot.
Alaska
Minimum wage. Ballot Measure No. 1 will propose
annual increases to the state minimum wage beginning in
2025. If passed, the minimum wage will increase on July 1,
2025, to $13 per hour from $11.73. The minimum wage would
further increase on July 1 of subsequent years: effective July
1, 2026, $14 per hour and effective July 1, 2027, $15 per
hour. Beginning January 1, 2028, the wage will be adjusted
annually for inflation [Division of Elections, Ballot Measure
No. 1].
Paid sick leave. Ballot Measure No. 1 will also propose
the creation of PSL for Alaska employees. Employees would
accrue a minimum of 1 hour of PSL for every 30 hours of work.
Employers with 15 or more employees would have to allow
employees to accrue up to 56 hours of PSL a year. Employers
with 14 or fewer employees would only have to allow accrual
of up to 40 hours per year. If passed, employees would begin
accruing PSL effective July 1, 2025.
Paid sick leave would be available for the employee or
their family member’s need for leave related to mental or
physical illness, injury, or health condition preventative
care or need related to domestic violence, sexual assault, or
stalking [Division of Elections, Ballot Measure No. 1].
Arizona
Tip credit amendment. Proposition 138 will ask voters
whether the tip credit for employees who receive gratuities
should be 25% of the minimum wage (see PAYSTATE UPDATE,
Issue 15, Vol. 26). To take the tip credit, the employer would
have to establish that the employee received at least the
minimum wage plus $2 per hour. The current minimum
wage is $14.35 per hour, adjusted annually for inflation. For
an employer to take a tip credit, the employee would need
to receive at least $16.35 per hour. The minimum cash wage
would be $10.77 per hour, the tip credit would be $3.58 per
hour. Currently, the tip credit is $3 per hour [Secretary of
State, Proposition 138, 7-31-24].
California
Minimum wage increase. Proposition 32 will seek
to raise the state minimum wage annually. Currently, the
minimum wage is subject to annual increases for inflation.
The minimum wage increases initially would be divided
based on employer size. If passed, the minimum wage in
2025 for employers with 26 or more employees will be $18
per hour, up from $16. The minimum wage for employers
with 25 or fewer employees would be $17 per hour, up from
$16. In 2026, the minimum wage for all employers regardless
of size would be $18 per hour. Starting in 2027, the minimum
wage would continue to be adjusted annually for inflation
[Legislative Analyst’s Office, Proposition 32].
Massachusetts
Tip credit decrease. Ballot Initiative No. 23-12 would
gradually decrease and eventually eliminate the state tip
credit. If passed, the tip credit would decrease along the
following schedule. Effective January 1, 2025, the tip credit
would decrease to 36% of the minimum wage from $8.25
(i.e., 55% currently) effective January 1, 2026, 27% of the
minimum wage effective January 1, 2027, 18% of the
minimum wage and effective January 1, 2029, the tip credit
would be eliminated [Office of the Attorney General, Ballot
Initiative 23-12].
Missouri
Minimum wage. Proposition A would increase the state
minimum wage. If passed, the minimum wage will increase
along the following schedule. Effective January 1, 2025, the
minimum wage would increase to $13.75 per hour, up from
$12.30 effective January 1, 2026, $15 per hour and effective
January 1, 2027, the minimum wage would increase or
decrease annually for inflation [Secretary of State, Proposition
A, 1-9-23].
Paid sick leave. Proposition A also proposes the creation
of a state PSL law. Employees would accrue 1 hour of PSL
for every 30 hours worked. For employers with 15 or more
employees, employees could accrue up to 56 hours a year.
For employers with 14 or fewer employees, employees
could accrue up to 40 hours a year. Employees would begin
accruing PSL on May 1, 2025.
PSL could be used for leave related to an employee or
their family member’s mental or physical illness, injury, or
health condition preventative care public health emergency
or need for leave related to domestic violence, sexual assault,
or stalking [Secretary of State, Proposition A, 1-9-23].
Nebraska
Paid sick leave. A voter-initiated petition will appear on
the ballot to propose the creation of a state PSL law, known
as the Nebraska Healthy Families and Workplace Act. Under
the act, employees would accrue 1 hour of PSL for every 30
