Rhode Island Minimum Wage Increasing October 1st, 2020

State of Rhode Island seal logoRhode Island minimum wage will increase to $11.50 an hour on Oct. 1, 2020.

Rhode Island does not have any scheduled increases following the October 2020 minimum wage update. “Putting more money in the pockets of those with the lowest wages helps their families and the economy overall, because people at that end of the wage spectrum pump that money right back into the local economy, buying necessities. It also means less demand for public assistance. A stronger minimum wage will mean a stronger economy for Rhode Island,” said State Rep. David Bennett in a statement.

What Is the Law?

H7157 Substitute A was signed into law on March 10, 2020.  The law increases Rhode Island’s minimum wage by a dollar per hour.  The minimum wage will rise from $10.50 an hour to $11.50 an hour. The tipped minimum wage is increasing from $3.89 to $4.89 based on a tip-credit of $6.61 per hour.  An employee must make at least $6.61 in tips for every hour worked in order to take full advantage of the tip-credit.  If an employee makes less than $6.61 in tips for every hour worked the employer must make up the difference by paying a higher wage.  Don’t forget employees scheduled to work must be provided with 3 hours of work or 3 hours of wages.  Retail establishment employees must be provided with 4 hours of work or 4 hours of wages on Sundays and Holidays when scheduled to work.   

What is the rollout timing of the law?

The minimum wage in Rhode Island will increase on October 1, 2020.  

What are the penalties if the law is not followed

The Rhode Island Dept. of Labor and Training (DLT) may bring criminal action against any employer who pays substandard wages to an employee and seek, upon conviction, a penalty up to $500.00 and/or imprisonment of up to 90 days. Each week an employer fails to pay the applicable minimum wage constitutes a separate violation.

How can RASI assist restaurants to remain in compliance with the law?

Ever forget to make changes to minimum wage employees when there is an increase to minimum wage?  Do you know if your tipped employees make enough in tips to cover the tip-credit?  Calculating the average amount of tips each server, bartender, and busser make per hour is daunting but necessary task.  RASI’s payroll service will increase an employee’s wages if you forget to increase their hourly pay rate, so the business is compliant with the minimum wage law on every payroll.  RASI’s payroll service will also calculate the average amount of tips each server, bartender, and busser make and compare to the applicable tip-credit and tip-credit minimum wage to ensure each employee makes at least minimum wage for every hour worked If a tipped employee is not making enough tips to cover the tip-credit of $6.61 per hour RASI will add wages to their check so the employee earns at least minimum wage for every hour worked.  

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