January/February 2007 Payroll & Tax News





Iowa Minimum Wage Increase
Effective April 1, 2007, the state of Iowa will be increasing its minimum wage rate from the current $5.15 per hour to $6.20 per hour; effective January 1, 2008, the minimum wage rate will increase again to $7.25 per hour.

Iowa regulations also provide for a training wage, which can be paid to workers during their first 90 days on a job, this rate will also increase incrementally. Effective April 1, 2007, the minimum training rate increase to $5.30 per hour; effective January 1, 2008, the minimum training rate will increase again to $6.35 per hour .

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San Francisco enacts paid sick leave ordinance
The city of San Francisco has enacted a Paid Sick Leave Ordinance, which has been incorporated in Chapter 12W of the San Francisco Administrative Code. This ordinance requires that all employers provide paid sick leave to each employee who performs work in San Francisco. Effective on February 5, 2007, employers are required to begin to accruing paid sick leave for San Francisco workers employed on or before February 5, 2007. Employees hired after February 5, 2007, begin to accrue paid sick leave 90 days after the commencement of employment.

View details regarding accrual rates, employee use of sick leave and other frequently asked questions on the San Francisco Office of Labor Standards Enforcement website.

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District of Columbia Income Tax Withholding Decrease for 2007

The District of Columbia (DC) cut the withholding tax rates in each of its withholding tax brackets, except the first bracket in each affected withholding table. These rate cuts result in lower withholding taxes for most DC employees.

This change is effective 1/1/2007. Authoritative information on this change can be found on the District of Columbia's Tax Forms/Publications with Filing Deadlines web page by clicking on "Withholding Tax Tables (FR-230)" under the "Business" drop-down.

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California Overtime Reporting Requirements Clarified By New Law
California Assembly Bill 2095 was enacted to clarify a perceived inconsistency between two existing labor codes in regards to overtime reporting on employee pay stubs. California Labor Code section 204, specifies that wages earned in excess of the normal work period (e.g. overtime) may be paid no later than the next consecutive pay period. California Labor Code section 226(a) requires that an employer provide each employee with an itemized statement showing the total hours worked during the pay period.

California A.B. 2095 clarifies that when overtime hours worked are paid in the next consecutive pay period, an employer is in compliance with the provisions of Labor Code 226(a) if it reports overtime hours as itemized corrections on the pay stub; the amendment further requires that any corrections for overtime paid in subsequent pay period state the inclusive dates of the pay period in which the hours were worked.

View the content and applicability of Assembly Bill 2095.

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Bernalillo County, New Mexico passes minimum wage ordinance
Effective January 13, 2007, covered employers in Bernalillo County must pay a minimum wage of $6.75 per hour; employers may pay $5.75 per hour if health care and/or child care benefits are provided.

Details can be found in the Bernalillo County Notice of Minimum Wage.

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