HB42 Summary

• Proposes a constitutional amendment to establish an Alabama state minimum wage of $9.80 per hour, phased in through three increments of $0.85 per hour on January 1, 2017 ($8.10), July 1, 2017 ($8.95), and January 1, 2018 ($9.80).

• Requires tipped employees' wages to not fall below 30 percent of the federal or state minimum wage, whichever is greater, provided the employee receives at least 70 percent of the current minimum wage in gratuities.

• Establishes automatic cost-of-living adjustments beginning January 1, 2020, and every three years thereafter, based on the Consumer Price Index for Alabama as reported by the U.S. Department of Labor for the preceding July 1st.

• Requires the State Finance Director to notify the Alabama Department of Labor between October 1 and October 15 annually of the percentage adjustment for the next three calendar years, with the Department posting wage changes on its website to notify employers.

• Prohibits employers from displacing employees to hire workers at the new minimum wage rate and provides that violating employers are liable for unpaid wages plus interest, court costs, and reasonable attorney's fees within a three-year action period.