Government employers need to be aware of two rate increases this year. One is the standard mileage rate set by the IRS and the other is the minimum wage rate set by Arizona voters.
Standard mileage rate
Every year, the IRS establishes a standard mileage rate and this year is no different. Many government entities pay employees the IRS standard mileage rate when employees use their own vehicle. The mileage rate in 2018 was 54.5 cents per mile. Effective January 1, 2019, the IRS increased the standard rate by 3.5 cents to 58 cents per business mile. Employers will need to change standard mileage reimbursement forms and inform employees regarding the change in the rate.
In 2016, Arizona voters approved Proposition 206 (referred to as the Fair Wages and Healthy Families Act) which raised the minimum wages. Effective January 1, 2019, the minimum wage for Arizona workers increased from $10.50 to $11.00 per hour. Effective January 1, 2020, the minimum wage for Arizona workers will increase again to $12.00 per hour. After 2020, Arizona’s minimum wage will be re-evaluated yearly and linked to the Consumer Price Index, which is intended to raise the rate along with inflation. However, municipalities can establish their own minimum wage rates. In Arizona, Flagstaff established their minimum wage rate for 2019 to be $12.00 per hour.