Note: The following article is an update to our annual minimum wage post and includes excerpts from our previous blog titled, 2021 State-By-State Anticipated Minimum Wage Increases You Need to Know

Although the past few years may have brought forth plenty of change, one thing remained stagnant, and that is the federal minimum wage. The federal minimum wage was last modified on July 24, 2009, when the wage increased from $6.55 to $7.25. Although the federal minimum wage remains at $7.25, states can choose which minimum wage they want to implement for workers. Note: State minimum wages can vary per city or county, but some states still adhere to the federal standard of $7.25 an hour. 

As noted in our previous annual minimum wage post, the DOL explains, “Federal minimum wage law supersedes state minimum wage laws where the federal minimum wage is greater than the state minimum wage. In those states where the state minimum wage is greater than the federal minimum wage, the state minimum wage prevails.” As a result, if a state, city, or county establishes a minimum wage higher than the federal amount, employers must pay that higher rate to employees.

With the above in mind, here are some highlights from 2021, as well as projected state-by-state minimum wage increases to be aware of for 2022. 

Highlights from 2021.

According to our previous post, 2021 minimum wage increases became effective Jan. 1, 2021, for 21 states with additional states implementing increases later in the year.

As of Sept. 30, 2021, The Department of Labor (DOL) shows 16 states with the federal standard of $7.25 an hour. Those states are the following:

  1. Georgia
  2. Idaho
  3. Indiana
  4. Iowa
  5. Kansas
  6. Kentucky
  7. North Carolina
  8. North Dakota
  9. New Hampshire
  10. Ohio (A higher minimum wage (increasing from $8.80 to $9.30 in 2022) applies to non-tipped employees for employers with annual gross receipts of $323,000 or more.) 
  11. Oklahoma (adheres to the federal minimum standard of $7.25 for “Employers of ten or more full time employees at any one location and employers with annual gross sales over $100,000 irrespective of number of full time employees”)
  12. Pennsylvania
  13. Texas
  14. Utah
  15. Wisconsin
  16. Wyoming

The DOL shows five states that do not have a minimum wage requirement as of Sept. 30, 2021. Those states are the following:

  1. Alabama
  2. Louisiana
  3. Mississippi
  4. South Carolina
  5. Tennessee

For a full list of states, monitor the DOL’s site for updated information throughout the year.

For states that do not have a state minimum wage law, under the Fair Labor Standards Act (FLSA), employers must adhere to the federal minimum wage of $7.25.

As explained by the National Conference of State Legislatures (NCSL), “States increase their minimum wages for a few different reasons. Some are based on the cost of living, while others are based on previously approved legislation or ballot initiatives.

What’s to come in 2022.

Minimum wage increases are projected to become effective Jan. 1, 2022, for 23 states, with some state minimum wage increases potentially becoming effective later in the year. Note: Ohio adheres to the federal standard of $7.25 for employers with annual gross receipts less than $342,000 in 2022. Additionally, Florida’s increased minimum wage becomes effective September 30, 2022, and Nevada, Oregon and Connecticut’s increased minimum wage laws become effective July 1, 2022.

The 25 states expected to increase in 2022 can be seen in the following chart showing side by side anticipated increases from 2021 to 2022:

Table

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*The following states’ increase rate have special circumstances as follows: 

California

The increased rate of $15.00 per hour will be applied to employers with 26 or more employees. Businesses in California will have a minimum wage of $14.00 an hour for 25 or fewer employees.

Maryland

The increased rate of $12.50 per hour will be applied to employers with 15 or more employees. Businesses in Maryland will have a minimum wage of $12.20 an hour for employers with 14 or fewer employees in 2022.

Minnesota

The increased rate applies to large businesses. There will be a minimum wage of $8.42 an hour for small employers. There will also be $8.42 an hour for the 90-day learning pay (for employees under 20 years of age) and youth salary (for employees under 18 years of age).

Nevada

Nevada’s minimum wage law takes into consideration whether an employer offers qualified benefits to employees. 

  • As of July 2021:
    • The minimum wage is $8.75 if an employer offers health benefits to the employee. 
    • The minimum wage is $9.75 if an employer does not offer health benefits to the employee.
  • Beginning July 1, 2022:
    • The minimum wage is increasing to $9.50 if an employer offers health benefits to the employee.
    • The minimum wage is increasing to $10.50 if an employer does not offer health benefits to the employee.

New York

The increased rate applies to most employers in New York State. New York City's minimum wage may differ for Long Island and Westchester. We recommend that you monitor the New York government site for updates to minimum wage.

Additional Minimum Wage Information for 2022

As mentioned earlier in this article, as of Sept. 30, 2021, five states (Alabama, Louisiana, Mississippi, South Carolina, and Tennessee) do not have a minimum wage requirement and therefore adhere to the federal standard. 

Be sure to check your state’s Department of Labor for rates specific to your location, as well as minimum wages for tipped employees. 

If you are interested in more information regarding these rate changes, please visit the official state sites linked below:

  1. Arizona 
  2. California
  3. Colorado 
  4. Connecticut 
  5. Delaware 
  6. Florida 
  7. Illinois 
  8. Maine 
  9. Maryland
  10. Massachusetts 
  11. Michigan 
  12. Minnesota
  13. Missouri 
  14. Montana 
  15. New Jersey 
  16. New Mexico 
  17. New York
  18. Nevada
  19. Ohio 
  20. Oregon 
  21. Rhode Island 
  22. South Dakota 
  23. Vermont 
  24. Virginia 
  25. Washington 

Stay tuned for our updated Quick Wage & Tax guide!

This includes minimum wage information as well as other important tax rates to know for the upcoming year. Want to get this free guide as soon as it’s published? We will send clients and subscribers the guide once released. Not a client or subscriber? Click here to sign up for our blog and we’ll send you a copy when it is ready.

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