Del: State Looks at Minimum Wage Increase in 2015

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Senate Bill 39, introduced on March 19, 2015, would increase the state’s minimum wage to $10.25 by 50 cents per year for the next four years, beginning June 1, 2016, and indexing it to the cost of living after that.

Specifically, the bill would raise the wage to $8.25 per hour on June 1, 2015; $8.75 on June 1, 2016; $9.25 on June 1, 2017; $9.75 on June 1, 2018; and $10.25 on June 1, 2019. On July 1, 2019, it would increase by a percentage equal to the cost of living adjustment (COLA) as determined periodically under the federal Social Security Act.

Under legislation enacted last year, however, the state's hourly minimum wage increased by 50 cents to $7.75 on June 1, 2014, and this year, on June 1, it will go up another 50 cents.

In response, business groups are pushing back with the Delaware Wage Facts Coalition, a group that includes the statewide Chamber of Commerce, the Delaware affiliate of the National Federation of Independent Business (NFIB), and the Delaware Restaurant Association. Their point: that the wage increase would threaten the service jobs on which thousands of Delawareans depend.

“It is premature to mandate additional wage increases on Delaware small businesses in the midst of the current implementation of higher labor costs,” stated the Delaware NFIB. “It is also concerning that the message of ever-increasing wages sends to job creators – that Delaware is not business friendly.”

The bill stems from a study by the legislative Low-Wage, Service Worker Task Force, which took public testimony and released a report in January 2015, stating that the state’s minimum hourly wage is unable to sustain the families who are becoming increasingly reliant on it in the wake of the recession and the extreme shrinkage of blue-collar industries.

A strong minority report countered by warning that government must not pursue policies, regardless of how well-intentioned, that would reduce the number of jobs available, the number of hours worked, and the amount of take-home pay.

The bill is expected to experience intense opposition from the business community.

Diane Cadrain is an attorney who has been writing about employment law issues for more than 20 years.

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