1     
MINIMUM WAGE MODIFICATIONS

2     
2023 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Brett Garner

5     
Senate Sponsor: ____________

6     

7     LONG TITLE
8     General Description:
9          This bill addresses the minimum wage.
10     Highlighted Provisions:
11          This bill:
12          ▸     defines terms;
13          ▸     repeals provisions allowing an employee who is a minor or who has a disability to
14     earn less than the minimum wage;
15          ▸     adjusts the minimum wage;
16          ▸     requires the Labor Commission to adjust the minimum wage at certain times;
17          ▸     grants administrative rulemaking authority; and
18          ▸     makes technical and conforming changes.
19     Money Appropriated in this Bill:
20          None
21     Other Special Clauses:
22          None
23     Utah Code Sections Affected:
24     AMENDS:
25          34-23-301, as last amended by Laws of Utah 1997, Chapter 375
26          34-40-102, as last amended by Laws of Utah 2016, Chapter 370
27          34-40-103, as last amended by Laws of Utah 1997, Chapter 375
28          34-40-104, as last amended by Laws of Utah 2008, Chapter 382
29          34-40-106, as last amended by Laws of Utah 2005, Chapter 287
30     

31     Be it enacted by the Legislature of the state of Utah:
32          Section 1. Section 34-23-301 is amended to read:
33          34-23-301. Minimum hourly wages.
34          The commission may establish minimum hourly wages for minors[. If there is an
35     established minimum hourly wage for adults, the minimum hourly wages for minors may be
36     established at a lesser amount.] in accordance with Section 34-40-103.
37          Section 2. Section 34-40-102 is amended to read:
38          34-40-102. Definitions -- Joint employees -- Franchisors.
39          (1) Subject to Subsection (3), this chapter and the terms used in [it] this chapter,
40     including the computation of wages, shall be interpreted consistently with the Fair Labor
41     Standards Act of 1938, 29 U.S.C. Sec. 201 et seq., as amended, to the extent that act relates to
42     the payment of a minimum wage.
43          (2) As used in this chapter:
44          (a) "Adjust for inflation" means increase or decrease in accordance with the seasonally
45     adjusted consumer price index for all urban consumers published by the Bureau of Labor
46     Statistics within the United States Department of Labor.
47          (b) "Cash wage obligation" means an hourly wage that an employer pays a tipped
48     employee regardless of the tips or gratuities a tipped employee receives.
49          [(b)] (c) "Commission" means the Labor Commission.
50          [(c)] (d) "Division" means the Division of Antidiscrimination and Labor in the
51     commission.
52          [(d)] (e) "Federal executive agency" means an executive agency, as defined in 5 U.S.C.
53     Sec. 105, of the federal government.
54          [(e)] (f) "Franchise" means the same as that term is defined in 16 C.F.R. Sec. 436.1.
55          [(f)] (g) "Franchisee" means the same as that term is defined in 16 C.F.R. Sec. 436.1.
56          [(g)] (h) "Franchisor" means the same as that term is defined in 16 C.F.R. Sec. 436.1.
57          [(h)] (i) "Minimum wage" means the state minimum hourly wage for adult employees
58     as established under this chapter, unless the context clearly indicates otherwise.
59          [(i)] (j) "Tipped employee" means an employee who customarily and regularly receives
60     tips or gratuities.
61          (3) Notwithstanding Subsection (1), for purposes of determining whether two or more
62     persons are considered joint employers under this chapter, an administrative ruling of a federal
63     executive agency may not be considered a generally applicable law unless that administrative
64     ruling is determined to be generally applicable by a court of law, or adopted by statute or rule.
65          (4) (a) For purposes of this chapter, a franchisor is not considered to be an employer of:
66          (i) a franchisee; or
67          (ii) a franchisee's employee.
68          (b) With respect to a specific claim for relief under this chapter made by a franchisee or
69     a franchisee's employee, this Subsection (4) does not apply to a franchisor under a franchise
70     that exercises a type or degree of control over the franchisee or the franchisee's employee not
71     customarily exercised by a franchisor for the purpose of protecting the franchisor's trademarks
72     and brand.
73          Section 3. Section 34-40-103 is amended to read:
74          34-40-103. Minimum wage -- Commission to review and modify minimum wage.
75          (1) (a) The minimum wage for all private and public employees within the state shall
76     be $3.35 per hour.
77          (b) Effective April 1, 1990, the minimum wage shall be $3.80 per hour.
78          (c) Effective December 31, 2023, the minimum wage shall be $7.25 per hour.
79          (d) Effective January 1, 2025, the minimum wage shall be:
80          (i) for an employee who is younger than 18 years old, $10 per hour;
81          (ii) for an employee who is 18 years old or older and younger than 21 years old, $13
82     per hour;
83          (iii) for an employee who is 21 years old or older and younger than 23 years old, $15
84     per hour; and
85          (iv) for an employee who is 23 years old or older, $19 per hour.
86          (e) Beginning January 1, 2027, and each January 1 thereafter, the commission shall, by
87     rule made in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act:
88          (i) adjust for inflation the minimum wages described in Subsection (1)(d) for the
89     immediately preceding two-year period; and
90          (ii) subject to Subsection (2)(a), establish a minimum wage for each category of
91     employee described in Subsection (1)(d) that is equal to or greater than the adjusted amount for
92     the category determined under Subsection (1)(e)(i).
93          [(2) (a) After July 1, 1990, the commission may by rule establish the minimum wage or
94     wages as provided in this chapter that may be paid to employees in public and private
95     employment within the state.]
96          [(b)] (2) (a) The minimum wage, as established by the commission, may not [exceed
97     the] at any time be lower than the federal minimum wage as provided in 29 U.S.C. Sec. 201 et
98     seq., the Fair Labor Standards Act of 1938[, as amended, in effect at the time of
99     implementation of this section].
100          [(c)] (b) The commission:
101          (i) may review the minimum wage at any time;
102          [(ii) shall review the minimum wage at least every three years; and]
103          [(iii)] (ii) shall review the minimum wage whenever the federal minimum wage is
104     changed[.];
105          (iii) may, by rule made in accordance with Title 63G, Chapter 3, Utah Administrative
106     Rulemaking Act:
107          (A) adjust for inflation the minimum wages described in Subsection (1)(d) more often
108     than is required under Subsection (1)(e); and
109          (B) subject to Subsection (2)(a), establish a minimum wage for a category of employee
110     described in Subsection (1)(d) that is equal to or greater than the adjusted amount determined
111     for the category under Subsection (2)(b)(iii)(A).
112          [(3) The commission may provide for separate minimum hourly wages for minors.]
113          Section 4. Section 34-40-104 is amended to read:
114          34-40-104. Exemptions.
115          (1) The minimum wage established in this chapter does not apply to:
116          (a) any employee who is entitled to a minimum wage as provided in 29 U.S.C. Sec.
117     201 et seq., the Fair Labor Standards Act of 1938, as amended;
118          (b) outside sales persons;
119          (c) an employee who is a member of the employer's immediate family;
120          [(d) companionship service for persons who, because of age or infirmity, are unable to
121     care for themselves;]
122          [(e)] (d) casual and domestic employees as defined by the commission;
123          [(f)] (e) seasonal employees of nonprofit camping programs, religious or recreation
124     programs, and nonprofit educational and charitable organizations registered under Title 13,
125     Chapter 22, Charitable Solicitations Act;
126          [(g)] (f) an individual employed by the United States of America;
127          [(h)] (g) any prisoner employed through the penal system;
128          [(i)] (h) any employee employed in agriculture if the employee:
129          (i) is principally engaged in the range production of livestock;
130          (ii) is employed as a harvest laborer and is paid on a piece rate basis in an operation
131     that has been and is generally recognized by custom as having been paid on a piece rate basis in
132     the region of employment;
133          (iii) was employed in agriculture less than 13 weeks during the preceding calendar
134     year; or
135          (iv) is a retired or semiretired person performing part-time or incidental work as a
136     condition of the employee's residence on a farm or ranch;
137          [(j)] (i) registered apprentices or students employed by the educational institution in
138     which they are enrolled; or
139          [(k)] (j) any seasonal hourly employee employed by a seasonal amusement
140     establishment with permanent structures and facilities if the other direct monetary
141     compensation from tips, incentives, commissions, end-of-season bonus, or other forms of pay
142     is sufficient to cause the average hourly rate of total compensation for the season of seasonal
143     hourly employees who continue to work to the end of the operating season to equal the
144     applicable minimum wage if the seasonal amusement establishment:
145          (i) does not operate for more than seven months in any calendar year; or
146          (ii) during the preceding calendar year its average receipts for any six months of that
147     year were not more than 33-1/3% of its average receipts for the other six months of that year.
148          [(2) (a) Persons with a disability whose earnings or productive capacities are impaired
149     by age, physical or mental deficiencies, or injury may be employed at wages that are lower than
150     the minimum wage, provided the wage is related to the employee's productivity.]
151          [(b) The commission may establish and regulate the wages paid or wage scales for
152     persons with a disability.]
153          [(3)] (2) The commission may establish or may set a lesser minimum wage for learners
154     not to exceed the first 160 hours of employment.
155          [(4)] (3) (a) An employer of a tipped employee shall pay the tipped employee at least
156     the minimum wage established by this chapter.
157          (b) In computing a tipped employee's wage under this Subsection [(4)] (3), an employer
158     of a tipped employee:
159          (i) shall pay the tipped employee at least the cash wage obligation as an hourly wage;
160     and
161          (ii) may compute the remainder of the tipped employee's wage using the tips or
162     gratuities the tipped employee actually receives.
163          (c) An employee shall retain all tips and gratuities except to the extent that the
164     employee participates in a bona fide tip pooling or sharing arrangement with other tipped
165     employees.
166          (d) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
167     commission shall by rule establish the cash wage obligation in conjunction with its review of
168     the minimum wage under Section 34-40-103.
169          Section 5. Section 34-40-106 is amended to read:
170          34-40-106. Limitations on minimum wage imposed by cities, towns, or counties.
171          (1) A city, town, or county may not establish, mandate, or require a minimum wage
172     that exceeds [the federal minimum wage as provided in 29 U.S.C. Sec. 201 et seq., Fair Labor
173     Standards Act of 1938] the established minimum wage for all private and public employees
174     under Section 34-40-103.
175          (2) (a) A city, town, or county may not require that a person who contracts with the
176     city, town, or county pay that person's employees a wage that exceeds the federal minimum
177     wage as provided in 29 U.S.C. Sec. 201 et seq., Fair Labor Standards Act of 1938.
178          (b) Subsection (2)(a) does not apply when federal law requires the payment of a
179     specified wage to persons working on projects funded in whole or in part by federal funds.
180          (c) Subsection (2)(a) applies to contracts executed on or after April 30, 2001.
181          (3) (a) If a city, town, or county contracts with a person for the direct purchase of goods
182     or services, in awarding or otherwise executing that contract, the city, town, or county may not
183     give any preferential treatment to a person on the basis that the person pays that person's
184     employees a wage that exceeds the minimum wage as provided in 29 U.S.C. 201 et seq., Fair
185     Labor Standards Act of 1938.
186          (b) This Subsection (3) does not apply when federal law requires the consideration of
187     whether a person pays the person's employees a specified wage to persons working on projects
188     funded in whole or in part by federal funds.
189          (c) This Subsection (3) applies to contracts executed on or after May 2, 2005.
190          (4) (a) The restrictions of this section on a city, town, or county apply to any entity
191     created by the city, town, or county.
192          (b) This Subsection (4) applies to contracts executed on or after May 2, 2005.