Changes Employers Need to Know About for 2016

Changes Employers Need to Know About for 2016

2016Every new year brings new employment regulations and other changes that all employers need to know about.

We’ve put together a great overview of what’s headed your way!

Minimum wage in 2016:

Washington State’s minimum wage will hold steady at $9.47 per hour. The last year it wasn’t raised was 2010.

By voter initiative, it is tied to the national Consumer Price Index for Urban Wage Earners and Clerical Workers. This means for the first time in many years, Washington will no longer have the highest state minimum wage in the nation. Both California’s and Massachusetts’ minimum wage will reach $10 per hour in 2016.

  • On 2/1/16, Tacoma’s minimum wage will rise on to $10.35 per hour
  • On 1/1/16, Seattle’s minimum wage will rise to $12 per hour for small employers and $13 per hour for large employers

It’s no longer enough to pay attention to the state’s minimum wage! We now have to be alert to what individual municipalities are doing as well.

Paid leave:

As of 2/1/16, businesses with employees working within the city limits of Tacoma will be required to provide their employees with up to 24 hours of paid sick and safe leave.

Compensation predictions for 2016:

According to Mercer’s 2015/2016 Compensation Planning Survey, the average salary increase budget for 2016 is predicted to be about 2.9%.

This is up just slightly from the 2.8% average in 2015. According to the Society for Human Resource Management and the WorldatWork Study, salary increases will average 3.1%, leaving them virtually unchanged from 2015.

Contribution limits:

The maximum annual employee salary reduction contribution to a Health Savings Account remains at $2,550 — the same as in 2015.

One slight contribution change is in parking benefits. In 2016, the monthly fringe benefit exclusion for qualified parking is raised to $255 per month.

Taxable wage base:

There is no change to the taxable wage base for Social Security taxes in 2016. It will remain at the 2015 level of $118,500.

There is no limit on wages subject to Medicare tax. The taxable wage base for Washington’s unemployment tax will rise to $44,000 from $42,100.