To keep you updated on 2021 benefit limits and minimum wage increase changes, we’ve summarized some of them for you (see below). We also recommend that you subscribe to all eAlerts through the HR Support Center to access additional information on changing employment laws and limits in the states you do business.
2021 benefit and social security limits
Review the chart below for important updates to social security and benefit limits for 2021.
| Type | 2020 | 2021 | |
|---|---|---|---|
| Health Savings Account (HSA) contribution limits | Self-Only | 3,550 | 3,600 |
| Family | 7,100 | 7,200 | |
| Catch-up (55 or older) | 1,000 | 1,000 | |
| Flexible Spending Account (FSA) contribution limits | Health FSA | 2,750 | 2,750 |
| Dependent Care FSA | 5,000 | 5,000 | |
| Qualified Transportation Plans – fringe benefit exclusion limit | Parking (monthly) | 270 | 270 |
| Transit (monthly) | 270 | 270 | |
| Deferred Compensation and Qualified Plan limits | 401(k), 403(b), 457 plans – max deferral | 19,500 | 19,500 |
| SIMPLE IRA plans – max deferral | 13,500 | 13,500 | |
| Catch-up contributions for 401(k), 403(b), 457 plans (age 50 or older) | 6,500 | 6,500 | |
| Catch-up contributions for SIMPLE IRA plans (age 50 or older) | 3,000 | 3,000 | |
| Social Security | Covered Compensation limit | 137,700 | 142,800 |
2021 minimum wage to increase in multiple states
Federal minimum wage remains $7.25 per hour, but state and local minimum wage rates increase effective in many states and cities in 2021 as a result of voter approval, changes in the law or the minimum wage being indexed for annual inflation.
The chart below details states that have announced minimum wage increases effective in 2021. More changes may be announced, so employers should continue to monitor developments. The U.S. Department of Labor maintains a database of the current state minimum wage rates on their website. Employers must also monitor local minimum wage rate increases.
NOTE: The Federal minimum salary for exempt employees has increased from $455 to $684 weekly ($35,568 annually). Some states require exempt employees be paid more than the federal minimum salary level. For this reason, employers should monitor state minimum salary requirements for exempt employees as well.
2021 State Minimum Wage Rate Increases
| State | 2020 Minimum Wage | 2021 Minimum Wage |
| Alaska | $10.19 | $10.34 |
| Arizona | $12.00 | $12.15 |
| Arkansas | $10.00 | $11.00 |
| California | $13.00 | $14.00* |
| Colorado | $12.00 | $12.32 |
| Connecticut | $12.00 | $13.00 (effective 8/1/21) |
| Florida | $8.56 | $10.00 (effective 9/30/21) |
| Illinois | $10.00 | $11.00 |
| Maine | $12.00 | $12.15 |
| Maryland | $11.00 | $11.75** |
| Massachusetts | $12.75 | $13.50 |
| Michigan | $9.65 | $9.87 |
| Minnesota | $10.00 | $10.08*** |
| Missouri | $9.45 | $10.30 |
| Montana | $8.65 | $8.75 |
| Nevada | $7.25 | $8.75 (effective 7/1/21)**** |
| New Jersey | $11.00 | $12.00***** |
| New Mexico | $9.00 | $10.50 |
| New York | $11.80 | $12.50****** |
| Ohio | $8.70 | $8.80 |
| Oregon | $11.25 | $12.75 (effective 7/1/21)****** |
| Rhode Island | $10.50 | $11.50 |
| South Dakota | $9.30 | $9.45 |
| Vermont | $10.96 | $11.75 |
| Washington | $13.50 | $13.69 |
| *$14.00 rate is for California employers with 26 or more employees. Employers in California with 25 or less employees have a minimum wage of $13.00 per hour. **$11.75 applies to Maryland employers with 15 or more employees. Employers in Maryland with 14 of fewer employees must pay a minimum wage of $11.60 per hour. ***$10.08 rate is for large employers in Minnesota (with annual gross revenues of at least $500,000). Small employers have a minimum wage of $8.21 per hour. ****$8.75 rate is for Nevada employees who are offered health insurance. $9.75 rate is for Nevada employees who are not offered health insurance. *****$12.00 applies to New Jersey employers who are non-seasonal and with 6 or more employees. Seasonal employees and those working for business who employ 5 or fewer employees must receive $11.00 per hour. ******The increased New York State minimum wage is effective 12/31/2020. Statewide minimum wages apply in areas that are not governed by a higher, local minimum wage ordinance. New York City and Portland Metro are examples of areas—like California—which have local minimum wage rates that exceed the statewide minimum. | ||
You can find additional minimum wage update resources on the HR Support Center, including our Minimum Wage Map for quick reference.
The easiest way to access the HR Support Center’s tools and resources is through the Quick Links on your Client Landing Page in iSolved®, as seen below.
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