The minimum wage, established in 1938, is the lowest wage an employer is allowed to pay their employees. It is a legally mandated price floor on labor, intended to protect workers and ensure that they are able to earn a fair wage for their work. The minimum wage is determined by the government and varies depending on the country, state, or region. Because of this, it can be challenging for businesses with employees across multiple states to stay on top of all the minimum wage changes.
Minimum Wage – A Snapshot
Although the past few years have seen plenty of changes in the U.S. workforce, the federal minimum wage has remained constant. The federal minimum wage has been at $7.25 an hour since July 24, 2009, when it was increased from $6.55 an hour.
Regardless of the federal rate, each state can set its own minimum wage for workers, and sometimes these wages can even vary by city and county. State minimum wage rates are typically governed by each individual state’s legislative activities.
According to the Department of Labor (DOL), states have to adhere to the federal minimum wage law if their state minimum wage is lower than the federal rate. Or, if the state minimum wage is greater than the federal minimum wage, then the state rate prevails. Therefore, if a state, city, or county has a minimum wage greater than $7.25, employers are required to pay that higher rate to employees.
With that being said, here are some minimum wage highlights from 2022 and 2023 along with anticipated state-by-state minimum wage increases to be aware of for 2024.