Revision: Dec. 6, 2023, 1:06 p.m.
HB 1322-FN - AS INTRODUCED
2024 SESSION
24-2413
12/10
HOUSE BILL 1322-FN
AN ACT relative to the state minimum hourly rate.
SPONSORS: Rep. Staub, Hills. 25; Rep. Seibert, Hills. 21; Rep. Horrigan, Straf. 10; Rep. Caplan, Merr. 8; Rep. Schultz, Merr. 29
COMMITTEE: Labor, Industrial and Rehabilitative Services
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ANALYSIS
This bill increases the minimum hourly rate, increases the base rate for tipped employees, and adjusts both rates annually based on the most recent 12-month average of the Consumer Price Index.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
24-2413
12/10
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Twenty Four
AN ACT relative to the state minimum hourly rate.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Minimum Hourly Rate. Amend the introductory paragraph of RSA 279:21 to read as follows:
279:21 Minimum Hourly Rate. Unless otherwise provided by statute, no person, firm, or corporation shall employ any employee at an hourly rate lower than that set forth in the federal minimum wage law, as amended, or the following minimum hourly rate, whichever is higher:
$9.50 per hour effective September 1, 2024.
$11.00 per hour effective January 1, 2025.
$12.50 per hour effective January 1, 2026.
$14.00 per hour effective January 1, 2027.
$15.50 per hour effective January 1, 2028.
$17.00 per hour effective January 1, 2029.
Beginning January 1, 2030, and each January 1 thereafter, the minimum hourly rate for employees and the base rate for tipped employees shall be adjusted according to the increase in the cost of living according to the Northeast Consumer Price Index for the most recent 12-month period as determined by the United States Department of Labor, Bureau of Labor Statistics. The adjustment to the minimum hourly rate for employees and the base rate for tipped employees shall not result in a decrease to either rate.
Tipped employees of a restaurant, hotel, motel, inn or cabin, or ballroom who customarily and regularly receive more than $30 a month in tips directly from the customers will receive a base rate from the employer of not less than [45] 50 percent of the applicable minimum [wage] hourly rate. If an employee shows to the satisfaction of the commissioner that the actual amount of wages received at the end of each pay period did not equal the minimum [wage] hourly rate for all hours worked, the employer shall pay the employee the difference to guarantee the applicable minimum [wage] hourly rate. The limitations imposed hereby shall be subject to the following exceptions:
2 Effective Date. This act shall take effect July 1, 2024.
24-2413
11/6/23
HB 1322-FN- FISCAL NOTE
AS INTRODUCED
AN ACT relative to the state minimum hourly rate.
FISCAL IMPACT: [ X ] State [ X ] County [ ] Local [ ] None
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Estimated State Impact - Increase / (Decrease) | ||||||
| FY 2024 | FY 2025 | FY 2026 | FY 2027 | ||
Revenue | $0 | $0 | $0 | $0 | ||
Revenue Fund(s) | General Fund and Highway Fund | |||||
Expenditures | $0 | $0 | $0 | $72,644 | ||
Funding Source(s) | General Fund and Highway Fund Various Government Funds | |||||
Appropriations | $0 | $0 | $0 | $0 | ||
Funding Source(s) | None | |||||
• Does this bill provide sufficient funding to cover estimated expenditures? [X] N/A • Does this bill authorize new positions to implement this bill? [X] N/A | ||||||
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Estimated Political Subdivision Impact - Increase / (Decrease) | ||||||
| FY 2024 | FY 2025 | FY 2026 | FY 2027 | ||
County Revenue | $0 | $0 | $0 | $0 | ||
County Expenditures | $0 | Indeterminable | Indeterminable | Indeterminable | ||
Local Revenue | $0 | $0 | $0 | $0 | ||
Local Expenditures | $0 | $0 | $0 | $0 | ||
METHODOLOGY:
This bill increases the minimum hourly rate, increases the base rate for tipped employees, and adjusts both rates annually based on the most recent 12-month average of the Consumer Price Index. The Department of Administrative Services assumes this bill is intended to apply to all employees working in the State of New Hampshire, including those working for the State. It is also assumed that the bill would apply to both full-time and part-time employees. The Department anticipates implementation of the bill would involve a system upload to increase the pay of those each year who are making less than the new minimum hourly rate. The cost to State government was estimated for the executive branch agencies only using data on current hourly rates of pay for all part-time and full-time employees. Annual increases in pay were considered for full-time employees only, because the timing of step increases for part-time staff varies depending on hours worked. The Division of Personnel identified all current full-time, part-time and seasonal employees that would be impacted by the required increase in the hourly rate of pay. The difference in pay for each employee was estimated and multiplied by an average number of hours expected to be worked for part-time staff (approximately ½ of total hours per year of full-time staff) and expected annual hours for full-time staff (either 1,950 or 2,080 hours per year). Based on this methodology there would be no increase in expenditures in fiscal years 2024 through 2026. Projecting into the future, the Department determined there would be increased state expenditures of $72,644 in FY 2027, $1,013,665 in FY 2028 and $3,289,017 in FY 2029.
The New Hampshire Municipal Association compared wage information available from the Bureau of Labor Statistics (BLS) for occupations in local and state government to the proposed hourly rates in the bill. The Association determined the pay rate for only four occupation codes may be impacted by the bill. Based on this information the Association indicates it appears unlikely that there would be any fiscal impact to municipalities before January 1, 2028 if wages stagnate between now and then. However, BLS statistics for the period of March 2006 to September 2023 showed an average wage increase of just under $0.79 per year. While it is not possible to predict future wage growth, if the historical trend holds, the Association would expect an increase of about $3.83 per hour. In addition, if wages were to remain flat it is unlikely that the low-paying occupations with stagnant wages would be able to fill empty positions. Therefore, the Association does not anticipate any fiscal impact on local expenditures or revenues as a consequence of this bill.
The New Hampshire Association of Counties is not able to determine the number of employees that may be impacted by the bill and is unable to estimate increase in county expenditures.
AGENCIES CONTACTED:
Department of Administrative Services, New Hampshire Municipal Association and New Hampshire Association of Counties