Expected 2022 Minimum Wage Changes

person A.J. Johnson today 12/21/2021

In 2022, 20 states will have new minimum wage rates. Many of the changes will take place on January 1 but some states make the change on July 1 while other states increase rates on odd schedules, such as Connecticut, and Florida, which saw its rate increase twice in 2021.

Affordable housing managers responsible for determining the income of applicants and residents need to be aware of state and local minimum wage laws in order to ensure the most accurate possible projection of income.

States with Minimum Wage in Excess of Federal $7.25 per Hour (as of 1/1/22) - unless noted otherwise, the minimum wage for tipped employees is $2.13

  • Alaska: $10.34 (AK does not have a different rate for tipped employees).
  • Arizona: $12.80; $9.80 for tipped employees.
  • Arkansas: $11.00; $2.63 for tipped employees.
  • California: $15.00 - applies only to employers with 26 or more employees. Employers in CA with 25 or fewer employees have a minimum wage of $14.00 per hour. Note: CA is the first state to reach the $15 minimum wage.
  • Colorado: $12.56; $9.54 for tipped employees. Colorado cities have the ability to set higher minimums, but so far only Denver has done so. The minimum wage for Denver will be $15.87 on January 1, 2022.
  • Connecticut: $12.00.
  • Delaware: $10.50. Minimum wage for tipped employees is $2.23.
  • District of Columbia: $15.00.
  • Florida: $8.65; $5.63 for tipped employees. Note: the minimum wage will increase to $10 per hour on September 30, 2021, reaching $15 by 2026.
  • Hawaii: $10.10.
  • Illinois: $12.00; $7.20 for tipped employees. The youth minimum wage for youth working less than 650 hours per year is $8.50.
  • Maine: $12.75; $6.38 for tipped employees.
  • Maryland: $12.20 for small employers (14 or fewer workers); $12.50 for all other employers; $3.63 for tipped employees.
  • Massachusetts: $14.25; $6.15 for tipped employees.
  • Michigan: $9.87; $3.75 for tipped employees. Note: this increase has been delayed due to high unemployment numbers and will remain at $9.87 until further notice.
  • Minnesota: $10.33 - this is the rate for large employers (employers with $500,000 or more gross revenue). Small employers have a minimum wage of $8.42 per hour.
  • Missouri: $11.15; $5.575 for tipped workers.
  • Montana: $9.20, for both tipped and non-tipped employees.
  • Nebraska: $9.00
  • Nevada: $8.25 for employees who are not offered health insurance. On July 1, 2020, minimum wage for employees with health insurance increased to $8.00 and those without health insurance to $9.00.
  • New Jersey: $13.00 (large employers - six or more employees); $11.90 (small employers); $5.13 for tipped employees.
  • New Mexico: $11.50; $2.80 for tipped employees.
  • New York: $13.20 statewide; $11 for hospitality, non-fast food, resort service; $8.80 for hospitality, non-fast food, general service; $14.50 for hospitality- fast food; ($15.00 in New York City).
  • Ohio: $9.30 (large employers with $323,000 or more in gross receipts); $7.25 (small employers); $4.65 for tipped employees.
  • Oregon: $11.25 (Portland, $13.25 on July 1) - effective July 1, 2020, statewide minimum will be $12.00 ($11.50 for nonurban counties).
  • Rhode Island: 12.25; tipped employees are $3.89.
  • South Dakota: $9.95; $4.975 for tipped employees.
  • Vermont: $12.55; $6.28 for tipped employees.
  • Virginia: $11.00.
  • Washington: $14.49.
  • West Virginia: $8.75

Certain occupations are exempt from federal minimum wage laws, but states have their own exemptions. Anytime an applicant or resident reports or has a verification of income that is less than the federal or state minimum wage, managers should follow up with employers to determine the reason. That reason should be documented in the file.

This information is certainly subject to change and owners and managers should always stay up-to-date with minimum wage increases in their states and localities.

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A. J. Johnson Partners with Mid-Atlantic AHMA for February Training on Affordable Housing

During the month of February 2022, A. J. Johnson will be partnering with the MidAtlantic Affordable Housing Management Association for three live webinars intended for real estate professionals, particularly those in the affordable multifamily housing field. The following live webinars will be presented: February 15: Basic LIHTC Compliance - This training is designed primarily for site managers and investment asset managers responsible for site-related asset management and is especially beneficial to those managers who are relatively inexperienced in the tax credit program. It covers all aspects of credit related to on-site management, including the applicant interview process, the determination of resident eligibility (income and student issues), handling recertification, setting rents - including a full review of utility allowance requirements - lease issues, and the importance of maintaining the property. The training includes problems and questions designed to ensure that students are fully comprehending the material. February 16: Dealing with Tenant-on-Tenant & Workplace Harassment - Dealing with tenant-on-tenant harassment is an evolving area of fair housing law. Landlords are generally familiar with how their actions can be construed as discriminatory. But how should landlords react when one resident is violating the fair housing rights of another resident? Title VII of the Civil Rights Act of 1964 prohibits discrimination based on sex in the workplace - including sexual harassment. The law applies to employers with 15 or more employees. In addition to having a written sexual harassment policy, companies should also have an effective complaint procedure. Many businesses in the United States have no policies regarding sexual harassment, and such harassment occurs in the highest levels of corporate management. However, the risk of not having such a policy far outweighs the effort required to implement one. These risks are greater now than ever before. Victims of sexual harassment may now recover damages (including punitive damages) and the Supreme Court has made it easier to prove injury. This Three-hour training is designed to help property owners and managers understand the current legal state of these two issues and to establish policies to limit potential liability. The session will include a discussion of the two most relevant court cases relating to tenant-on-tenant harassment as well as cases that outline employer risk regarding harassment in the workplace. Participants will also be provided with recommended policies to limit potential liability. February 23: The Verification and Calculation of Income and Assets on Affordable Housing Properties - This five-hour course (there will be a one-hour lunch break) provides concentrated instruction on the required methodology for calculating and verifying income, and for determining the value of assets and income generated by those assets. The first section of the course involves a comprehensive discussion of employment income, along with military pay, pensions/social security, self-employment income, and child support. It concludes with workshop problems designed to test what the student has learned during the discussion phase of the training and serve to reinforce HUD required techniques for the determination of income. The second component of the training focuses on a detailed discussion of requirements related to the determination of asset value and income and is applicable to all federal housing programs, including the low-income housing tax credit, tax-exempt bonds, Section 8, Section 515, HOME, and HOPE VI. Multiple types of assets are covered, both in terms of what constitutes an asset and how must they are verified. This section also concludes with a series of problems, designed to test the student s understanding of the basic requirements relative to assets. These sessions are part of the year-long collaboration between A. J. Johnson and MidAtlantic AHMA and are designed to provide affordable housing professionals with the knowledge needed to effectively manage the complex requirements of the various agencies overseeing these programs. Persons interested in any (or all) of these training sessions may register by visiting either www.ajjcs.net or https://www.mid-atlanticahma.org.

A. J. Johnson to Offer Average Income Live Webinar

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IRS Extends COVID-19 Relief for LIHTC and Tax-Exempt Bond Properties

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If  the original  deadline for  the 24-month minimum  rehabilitation  expenditure period for  a building  originally  is  on or  after April  1,  2020,  and is  on  or  before December  31,  2021,  then  that  deadline is extended  to  the  original  date  plus  18  months. If  the original  deadline  for  this  requirement  is  on or  after  January  1,  2022,  and on or  before June  30,  2022,  then  that  deadline is  extended to June 30,  2023. If  the original  deadline  for  this  requirement  is  on or  after  July  1,  2022,  and on or before  December  31,  2022,  then that  deadline  is  extended to the original  date plus  12 months. 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Child Care and Affordable Housing - A Potential "Win/Win" for Residents and Owners

A "gray rhino is a highly probable, high-impact yet neglected threat. These are not random surprises but occur after a series of warnings and visible evidence. The bursting of the housing bubble in 2008, the aftermath of hurricanes, and the fall of the Soviet Union are examples of gray rhinos. Jill Schlesinger, a CBS News business analyst, recently wrote an article making the case that childcare should be added to the list of gray rhinos. Some of the data Schlesinger outlined relating to childcare costs is stunning. A report from the U.S. Treasury stated, "The average family with at least one child under age 5 would need to devote about 13% of family income to pay for childcare, a number that is unaffordable for most families. The Department of Health & Human Services (HHS) considers childcare affordable when it costs no more than 7% of household income. With a U.S. median household income of $67,521, affordability is less than $100 per week. Childcare at this price is almost impossible to find.The average childcare cost in a daycare center is $340 per week, which means an annual income of more than $250,000 is needed to consider the care to be "affordable. A 2021 Care.com annual cost of care survey found that 57% of families spent more than $10,000 on childcare in 2020. Finding care is also a problem. Thousands of centers closed due to COVID-19. The low-paid workers of these facilities are now finding other - better paying - jobs. The median annual pay for daycare workers is $25,460 (12.24 per hour - if they work 40 hours per week). This is not a livable wage. The impact of all this is that parents (mainly women) are being forced to leave the workforce to care for their children. In September 2021, nearly 300,000 women left the labor force. Since the pandemic began that number is 3 million. The Build Back Better Plan of the Biden Administration would cap childcare costs at 7% of income for kids up to age five on a sliding scale, depending on the state of residence. In today s political climate, the chance of passage is close to zero. This lack of affordability presents a potential opportunity for forward-thinking owners of affordable housing. Among the possible ways to improve childcare affordability for residents is Partner with local daycare organizations to negotiate rate breaks for residents, in return for advertising the daycare facility at your property;Offer community space to local daycare operators to set up onsite care for children of the community; orSet up a childcare facility as a community amenity. This third option requires an analysis of the financial feasibility of the operation, as well as a determination of required local approvals. Despite this, such an operation is feasible and already exists in a number of properties across the nation. The following analysis indicates the method an owner may use as a starting point for determining feasibility. Assume that demand is such that 15 households at a property would consider onsite daycare if it was affordable.To pay for a full-time and part-time daycare worker ($18 per hour & $15 per hour:Full-time salary: $37,440Part-time salary (assume 20 hours per week): $15,600Employee benefits of $17,680 (Insurance, paid leave, health care).Total annual employee cost: $70,720If 15 children are cared for at $100 per week for 50 weeks, income is $75,000. Childcare at apartment communities would be considered a resident amenity - not a profit center. A simple break-even outcome may make consideration of this option worthwhile. Regardless of whether apartment owners determine that acting affirmatively regarding childcare is something to be initiated, the childcare crisis is real - and only getting worse. Thinking about how this burden can be eased for our customers seems like good business.

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